It's no secret that being an Airbnb host or running a short-term-rental (STR) business can sometimes feel like you're on an island. You're out there doing your thing, but how much intel do you really have about what's happening behind the scenes? How hard are your managers hustling to market your properties? How are your booking rates stacking up? Are you optimizing for profitability?
These are big questions, and to help answer them, we wanted to talk to those who are doing this everyday. We’ve gathered and analyzed data from our own customers and other industry players to give you the insights you need in our 2023 STR Trends Report. Our goal is to help you understand how your business stacks up against the competition and how you can grow your business.
Many folks are hopping aboard the short-term rental (STR) train these days, discovering that their real estate portfolio can be much more than just a collection of properties—it can be a real, revenue-generating business. It's just a matter of rolling up your sleeves and diving in.
Here at Uplisting, we're constantly in conversation with hosts and operators. There's one question that pops up time and time again: "How are other businesses growing in this space?" With this question in mind, we set out on a mission to support the STR community in navigating the challenges and opportunities in our industry.
Our hope is that the STR report doesn't just fill your head with facts and figures. We want it to illuminate the path ahead, identify areas for potential growth, and play a part in your journey to success in the STR world.
One thing's for sure—competition in the STR arena is fiercer than ever before. And to stay ahead, you'll need to think outside the box; there's a new generation reshaping the travel industry. Business as usual won't cut it anymore—it's time to embrace change and reimagine what your business can be.
In our research, we gathered insights from a diverse community in the short-term rental world. Here's a snapshot of who they are:
We heard from 158 respondents, offering a robust mix of experiences and perspectives.
Without further ado, let’s dive into the report findings and start by looking at three key insights.
As we sifted through our survey results, we stumbled upon something unexpected.
Many of our questions didn't turn up clear correlations.
Take amenities, for instance. You might have heard the advice from online gurus— "You need a pool" or "Get a sauna." We thought we'd find at least a couple amenities that would provide a notable boost in income. But our results indicate that isn’t the case.
We took this as a good reminder that there’s not always a silver bullet to more profits, and it might not be worth the spend to provide certain upscale amenities to your guests.
Most owners we surveyed aren't relying solely on their STR income to pay the bills. Instead, they're using it as a nice side hustle.
It's clear that owning short-term rentals isn't always about raking in the big bucks but rather finding smart ways to make properties work for their owners. It just goes to show there's more than one way to play in the STR space.
Another significant observation was that many are hovering between a 40- 70% occupancy rate. This, we believe, is a clear reflection of the stiff competition that's become characteristic of the STR space. Moving forward, crafting strategies to bump up your occupancy rate is going to be key in this increasingly crowded marketplace.
We're seeing a positive shift with property owners, operators, managers, and other stakeholders choosing to weave sustainable practices into the very fabric of their operations. But it's not just about tossing in a few recycling bins and ticking off the 'eco-friendly' box.
Some even construct properties from the ground up, with every brick and beam echoing a commitment to sustainability. Others pay attention to the details, outfitting their spaces with environmentally friendly materials to create a stay that guests can feel good about. We see sustainable properties as a growing trend in the STR space.
As we step back and look at the trends report, four key takeaways stand out. As you navigate the STR space, we believe each idea here can help guide your overall strategy and decision-making.
One key finding from the report reveals that owners are more likely to invest in marketing as their business grows. They're also not just relying on word-of-mouth or sticking to one booking platform anymore.
They're diversifying and listing their properties on multiple platforms, from Airbnb to Vrbo to their own websites in order to reach a wider audience.
Social media is also a big factor here. Savvy owners are using platforms like Instagram, Facebook, and TikTok to market their properties and connect with potential guests.
And don't forget about influencers—especially the ones with the magic touch who can make a place go viral overnight. Some owners collaborate with these social media experts to get their properties on the map.
We also found that once stakeholders hit the half-million mark in annual revenue, they’re doubling down with SEO marketing. Sure, it's a long game compared to other strategies, but it's a solid way to build visibility and drive traffic over time.
Email marketing is also a tried-and-true method to keep guests coming back for more visits.
All in all, it's clear that as businesses grow, STR owners aren't just sitting back and relaxing—they're investing the time and resources into taking their marketing game to the next level.
When we turned our attention to direct bookings, a surprising trend emerged in our data—80% of those raking in over $500,000 annually reported that they leverage direct bookings for their properties.
Why? Direct bookings come with some pretty sweet perks.
So, if you're looking to take your STR business to the next level, it seems like direct bookings might be the next natural, and more profitable step to take.
One common question property owners and managers ask themselves is, am I pricing my STR properties correctly? Dynamic pricing can help you do just that.
We found that 31% of all the respondents we surveyed use dynamic pricing to keep their listing rates fresh. Even more interesting, nearly half of that group (45%) are generating $500,000 to $999,000 in revenue annually.
The idea of some algorithm messing with your prices may seem a little unnerving but we can assure you that you will not lose any control over your business, it’s actually quite the opposite.
Dynamic pricing tools do the hard work of analyzing pricing trends on a daily basis so you’re not leaving money on the table or leaving your properties vacant due to unreasonable prices when demand is slow.
Our trends report revealed one more surprise when it comes to profits.
Our data showed that as annual revenue and the number of properties go up, average profits can go down.
We know it sounds counterintuitive, but here's the thing—running a real estate business isn't a walk in the park. It's asset-heavy, meaning you've got a lot tied up in physical properties. And to keep everything running smoothly, you've got to work with top-notch professionals, and their expertise doesn't come cheap.
So, if your goal is to keep your profit margins healthy as you grow, you'll need to think strategically about how you manage your resources. It's all part of the balancing act that comes with leveling up in the STR market.
Now that you’ve seen the trends, the opportunities, and the challenges that this evolving short-term market holds, how can you implement these and streamline your business?
Imagine managing all bookings from one calendar, syncing instantly with the industry's big four - Airbnb, Vrbo, Booking.com, and Google VR. Visualize a world where all guest messages land in a single inbox, making communication a breeze.
That’s where Uplisting can help. Uplisting is a tool that automates the complexities, optimizes your revenue, and saves you precious time managing your STR business. The platform takes care of automated guest messaging for smooth check-in and check-outs, as well as automated guest reviews.
Using Uplisting for your STR business allows you to tweak the pricing settings to boost your bookings and enhance security with automated settings like verifying guest identities and collecting security deposits. Plus, it provides you with your very own one-click-setup direct booking site.
If it’s time to turn trends into actions and insights into profits, we hope that the takeaways from the STR trends report empowers you to take your STR business to the next level with Uplisting. You can learn even more about all the features Uplisting has to offer for managing your STR business and try out a demo today, just click here.
We’ve built an all-in-one property, channel management and automation tool to help property managers scale seamlessly.