This past weekend I joined 300 of the world’s most proactive vacation rental owners and managers at the HomeAway Summit in Scottsdale, Arizona. HomeAway is the world’s largest vacation rental conglomerate and their clients are individuals who rent properties out for profit in one of the most exciting investment niches of the future.
For investors who were not fortunate enough to attend the annual event, here are my conclusions about 72 hours of vacation rental news and happenings distilled into six of the most noteworthy trends:
1. Things Are Just Getting Started
The concept of renting out your home is extremely new in the historical scope of hospitality. It can be easy to lose track of this fact considering many of us have been hearing of vacation rentals for the past 20 years. But in gauging the timing and trajectory of the industry, what became abundantly clear to me in the Summit was that things really are just getting started. Imbued in most dinner conversations was a sense of excitement and a very solid hunch that the best (and the bulk) of the industry is yet to come.
2. Sensing The Future To Compete In The Present
Realizing that the industry is so nascent, what I interpreted from the Summit was that the #1 incentive for vacation rental owners and managers today is the opportunity for first-mover advantages. I met handfuls of investors who reported that their single best decision was buying their property when they did. If you had to identify your one best decision? I’d ask and consistently, almost on cue, everyone said that it was getting in on the proverbial ground floor. Current owners and managers all seemed to feel lucky to have stumbled across this investment niche when they did. As if they’re on the inside of a secret that the rest of the investment and travel world has yet to truly discover.
3. Resources Are Diverse, Plentiful, And Growing
What I already knew before Scottsdale was that most critical players in the vacation rental sphere – the owners of the properties themselves – aren’t terribly experienced in running small businesses. But what I learned in wandering the Summit’s promotional lobby was that there are loads of companies looking to make themselves helpful and fill that niche. Take Evolve Vacation Rentals, for instance, whose service is designed specifically for property owners who don’t want to do any of their own marketing. Or MyVR.com who builds personal websites for owners who want more online presence. That companies like Evolve and MyVR are receiving millions of dollars in VC funding rounds shows that there is real money to be made.
I must have heard the word “fragmentation” about 50 times in Arizona and under it’s cliché umbrella was lurking a host of challenges to the new industry of vacation rentals: things like regulation, payment innovation, pricing consistencies, and phishing. How does one make the logistical process of booking a vacation rental as simple as booking a hotel? Interestingly, the solution process of sealing up all these inconsistencies seems, in a unifying way, to be drawing the community closer together. A perfect example is a group like the Short Term Rental Advocacy Center, which helps owners and managers, in cities where vacation rentals are persecuted, to more formally and effectively defend themselves. Contrary to the vicious competition one might expect from most emerging industries, fragmentation in the vacation rental space seems to be igniting a rather lovely visage of cooperation.
5. Experience Of Owners Ranges Greatly
The caliber of subscribers I recruit on my blog tends to be very high. But one of the things I was most curious to see at the HomeAway Summit was the skill level of the greater range of vacation rental owners and managers. Quite frankly, attendees of the event ranged massively in their abilities. From absolute beginners to savvy veterans, I was amazed to see the participation of so many different types of investors from so many different walks of life. And everyone having so much success!
6. The Leader Of The Pack
Early ventures like HomeAway in the formative years of a new industry like vacation rentals stand to win huge. That much is clear. But what’s especially cool is that they use platforms like the Summit to intimately connect with their clients. Watching HomeAway executives on stage calling out property owners by first name, you couldn’t help but think back to the days when tech giants like Amazon or Google or Ebay were still in those fledgling stages about to explode. The feeling of being a HomeAway client is one of “firsts.” As if experiencing the process of growth together with them kinda makes you part of their family.
If anyone had the pressing question prior to Arizona about whether vacation rentals would remain a small, underleveraged niche for years or decades to come – or whether forces would come together to fulfill the industry’s clear promise and make this new domain a major force in the travel world? It would be practically impossible to envision anything but upward growth.
Modern day vacation rentals are not a fly-by-night trend. They are only the beginning of a very real and sustainable travel movement that will change the way people experience new destinations forever.
Photo: Lee Edwin Coursey