Vacation rental business witnessed a meteoric rise. What was once a small startup ecosystem has evolved into a multibillion-dollar hospitality industry! Today around 52% of the travelers book vacation rentals recommended by their Social Media connects.
The vacation rentals started as a home sharing marketplace where people intended to exchange cultures. Today it is a lucrative business that thrived despite the huge impact of the recession on the hospitality industry.
The reason behind vacation rental turning into a full-scale industry post-recession are not limited to lower per night costs. Let us probe a little deeper to understand the inside mechanism:
Vacation rentals always marketed themselves as a second home. Commercialization had a hard hit during the recession as people could not afford to spend loads on hotels. But they still had to travel either for pleasure or work. This is when the vacation rentals caught eyes of the travelers. Affordable, personalized and cozy vacation rentals were a far cry from the palatial hotels but they made them feel at home.
Travelers often become homesick on their long trips. The shifts in food, language and adjusting in hotels add to the homesickness. Vacation rentals came as a respite to the travelers where they saved money and could stay in comfort.
Cooking facilities
The recession impacted the way travelers would splurge in food while traveling. 64% of the travelers find the kitchen a topmost amenity of the vacation rental. While people travel with family and kids they love to have a home cooked meal at the vacation rental as they save money and also find comfort at the vacation rental.
For the first time due to recession people who had properties started looking at it as a secondary source of income. With the ownership of reasonably sized properties, the owners could generate regular rental income. Alone in the United States, around 42 percent of vacation homeowners are able to cover all their cost of living with the vacation rental income alone and eventually turning them into a steady source of income.
It has been a decade since the recession hit and the travel industry changed forever. As the recession pulled the strings tighter, they started looking for secondary sources of income and renting their homes offer them the one.
Working as a catalyst, recession sparked a shift in the market. As the demand of cheaper trips increased and the homeowners were looking for more income, vacation rentals emerged and the properties that were not being used became a value-generating asset for the benefit of both travelers and homeowners.
After the recession in 2008, lots of people lost high paying jobs and were unable to pay the EMIs of the beach homes, forest vacation homes and more. The depression faced by real estate market made the selling of these properties impossible. The idea to convert these homes into vacation rentals was a brilliant idea to make up for the loss and EMIs every month. Today around 42 % of such properties are being rented out in the US.
The younger generation or fresh graduates became exposed to a market with hardly any well-paying jobs. To find a strong earning ground, younger generation started co-owning properties in expensive cities and making them available to business or leisure travelers at highly competitive prices where they can book the rentals for months together at 40%-50% lowers costs than the hotels.
Cheaper lodging opportunities for travelers and more income for property owners led the vacation rental market to evolve as a symbiotic market which translated into a multi-billion dollar industry.
