On your last vacation or trip out of town, you probably booked yourself at a nice hotel. It had housekeeping services, maybe a pool, maybe a restaurant. Was breakfast included in your rate? Did you upgrade from a single room to a suite?
Not the Financial Slackers. Instead of a hotel, we stayed in a stranger’s three bedroom / three bathroom house. Each child had their own bedroom and we had a kitchen so we could prepare meals rather than eating every meal in a restaurant.
Nothing seems like more of a waste than the $49 resort hotel breakfast buffet. Sure, it’s cool to be able to custom make your own donuts. And no matter what I do or how many I make, my omelette never comes out as well as the ones I get in restaurants. But with a family of four (even getting the $12.95 kid’s rate), the cost of breakfast can exceed $150 (after taxes and tip). That’s crazy. Who needs to spend that kind of money on breakfast? And when I spend for a breakfast buffet, I tend to eat much more than I need and much more than I should.
Instead of hotels, we have recently been staying in vacation rental houses when we travel. We found our most recent vacation rental on VRBO (Vacation Rental By Owner). I am a big fan of the sharing economy especially national vacation rental companies like VRBO, AirBnB, and HomeAway.
Vacation Rental Industry
For those less familiar with the model, vacation rental companies serve as a platform connecting renters with property owners and rental management companies. In that I am not a vacation property owner, I am looking at the industry as a renter not as a landlord. As a renter, the concept of vacation rental companies is the same as Uber – taking advantage of excess capacity in terms of unused houses, condos, and apartments and putting that capacity in the hands of travelers.
Before these companies came along, there were still plenty of vacation properties available for rent. It was just harder to find them. And just like Uber, by implementing an easy to use technology solution, coupled with a standardized nationwide/worldwide product offering, these new breed vacation rental companies have disrupted the industry.
Privacy, Comfort, Value
Historically, travelers have identified lower rates as the primary reason they choose a vacation rental over a hotel. But with greater awareness, availability, and increased confidence in the industry, this is changing. People aren’t just looking at vacation rentals as a value purchase, but instead, the vacation rental provides a different experience for travelers. And among those with a household income over $250,000, 21% used sharing-economy accommodations on at least one vacation during the previous 12 months.
The popularity of vacation rentals is evident. According to the Vacation Rental Managers Association, during the past two years, 22% of leisure travelers have stayed in a vacation home rental as an alternative to a traditional hotel or resort. While another 49% of leisure travelers have expressed interest in staying in a vacation home rental as an alternative to a traditional hotel or resort during the next two years.
And in a TripAdvisor vacation rental report released in March 2015, nearly 60% of respondents reported plans to stay in a vacation rental this year.
Driving this trend is the desire to travel with children, grandchildren, and other extended family. According to those surveyed, staying in a vacation rental provides travelers greater privacy and comfort as well as better value than staying in a hotel.
And booking a vacation rental has become just as easy as booking a hotel. Log into any of the sites, select your location, and preview the properties available for rent. Book online with a credit card and you’re done. Simple.
HOAs and Governments are Seeking to Limit Growth
But as easy as it is to book a vacation rental property, finding available properties may get more difficult. For many, having a rental house next door is not desirable. And one factor that could impact the continued growth of vacation rentals is the restrictions more and more neighborhoods are placing on rentals. Some of these restrictions prevent homeowners from renting for periods of less than a week, while others restrict renting for periods of less than one month, six months, or even more.
Will the Sharing Ecomomy Make Hotels Obsolete?
Don’t get me wrong, I am not advocating that you never stay at hotels. There is definitely a place for a hotel. I still love staying in a nice resort and the amenities provided in a hotel are often greater than you get in a vacation rental.
But renting a vacation home can serve a different need. When you’re traveling with a larger group; when you want to spread out; when you want more privacy a vacation rental is a great option.
Have you had any experiences with vacation rentals? Either as a renter or as a landlord? Where do you think the industry is headed?