After months of some of the hottest temperatures on record this summer, the high season is finally just around the corner in Austin. Every year brings a different set of circumstances that can and need to be adapted to get the most out of the high season. In 2021, we saw unprecedented domestic travel demand as people from all over the country were looking to escape local lockdowns in favor of the many ‘open for business’ Texas communities that welcomed them. In 2022, we saw the return of the international traveler as global travel restrictions eased and many of our friends from all over the world came back after two years to enjoy everything Austin has to offer. Like the previous two years, 2023 will inevitably bring new realities that must be understood and adapted to get the most out of this year’s high season. Here are some of the early trends we are seeing in the marketplace in the year ahead.
The Introduction of the Luxury Hotel Client
As the popularity of Airbnb, VRBO, and similar platforms grew throughout the 2010s, we witnessed the mass adoption of the mainstream of these platforms. The value proposition was simple. Enjoy more space, privacy, home amenities and comfort than a hotel at a competitive price. Consequently, we’ve witnessed the growth of the industry in exponential fashion throughout the last decade as these furnished home rentals have quickly become the lodging option of choice for many travelers. Yet there has always been a segment of the travelers who never saw themselves booking an Airbnb over the four star and five-star hotels they’ve become accustomed to. The reason comes down to consistency. They know exactly what they are getting at the Ritz or St. Regis and with an Airbnb it’s dependent on an individual host to put on a hospitality performance that resembles the world class hotels that they’ve become fond of over the years.
The 2020’s have seen the emergence of luxury furnished rental space and professional management of these short-term rentals that successfully emulate the five-star hotel experience. As such, that segment of travelers that would previously never have thought about staying at a furnished home or condo has warmed up to the idea and started the adoption process.
For Hosts looking to attract these price insensitive, often mature guests, it really comes down to set up and presentation. Unlike long term rentals which are priced on the broader “macro” factors, the financial upside of a short-term rental is highly dependent on the look, feel, and overall set up of the property. How the home is designed, the convenience of the experience, how fully equipped it is, and the professional management all play a part. No matter which ‘category’ a home is competing in, there is a higher end consumer and a host’s financial performance.
The Rise of the Mid-Length Stay
The Austin vacation rental market has historically been a tale of two types of stay – a very short and a very long one. Of course, being in the center of the country, short conference stays were quite common even before the pandemic. In terms of leisure travel, the typical Austin family vacation outside the holidays might have involved a Thursday night landing and a Monday morning departure. Vacationers would take a couple of days off from the office to spend three full days and four nights getting the most out of everything the Austin area offers. On the other side of the spectrum, there was the classic snowbird. After many winters in Boston, New York, Chicago, New Jersey, Connecticut, or many of the other wonderful regions that are blanketed with snow between December and April, the snowbirds decided to hang up the boots and put away the shovel. Snowbirds often land between November and January and leave by May.
With the rise of work from home becoming more of a cultural fabric than a pandemic trend, there is unprecedented growing demand for 7–21-day stays. Many people view ‘work from home’ as ‘work from anywhere” and so what used to be a vacation is now an extended trip that mixes pleasure with productivity. The implication is that short term rentals in Austin that traditionally targeted short vacation stays need to be equipped for “mid-length short term rentals” more than ever. Multiple laptop friendly workstations, kitchens fully equipped for cooking, high-end laundry facilities, and a furnishing set up that feels more like an executive home compared to a vacation home are key success factors in 2023.
Recurring Corporate Stays
It was only a few years ago that Austin was thought of as a place you go for a quick trip during the fall or spring. After months of hard work, a spring trip down south was meant to recharge those mental batteries. Things have changed quickly, not just for people but also for businesses. More companies are deciding to move operations to Austin for many reasons and every day it seems to resemble a long-term trend rather than a pandemic frenzy.
There is a significant and noticeable increase in not only one time business traffic to Austin Airbnb, but recurring business traffic. There have always been major conferences in Austin, but recurring corporate travel is something the state has historically been known for compared to cities such as New York, Los Angeles, Chicago, Boston, Seattle, San Francisco, and other traditional hubs. Companies are opening offices in Austin and in some cases moving their headquarters all together. Consequently, employees from all over the country and the world are coming to Austin for work.
The implication is that Austin short term rental hosts can generate repeat business by catering a high-quality service to corporate clientele. In the Austin low season especially, it’s become evident that the difference between a good low season and an average one is going to be determined by the amount of business travel that hosts attract in the summer and fall. Business travelers are professional, punctual, and often have great communication. They are always working when they travel for business so rarely are they at home, which also reduces overall wear and tear that comes with any type of short- or long-term tenancy. In 2023, when setting up Airbnb, Austin hosts should think about the business traveler as much as they are thinking about the vacationer.
So, there you have it, 2023 will be a great year and there is a lot to look forward to. Like in any business, following the trends and adapting to them will lead to short and long-term success.