Hostfully has released its much-anticipated hospitality trends report, providing a deep dive into the current state of the short-term rental (STR) industry. This eighth edition of the report consolidates insights from 347 property managers across various portfolio sizes and includes expert commentary from more than 20 thought leaders and integration partners, including Holiday Cottage Handbook Founder, James Varley. The report is a treasure trove of data, designed to help hosts and managers navigate the evolving STR landscape. Below are some key takeaways.
AI is revolutionising the industry
One of the report’s standout themes is the transformative impact of AI. From streamlining guest communication to enhancing operational efficiency, AI tools are becoming a cornerstone of property management. The integration of AI within property management systems has been widely embraced, with operators leveraging technology to save time, improve accuracy, and elevate the guest experience.
According to the report, more than 40% of hosts and managers are utilising AI features within their property management software (PMS), while 73% are using AI features external to their vacation rental software. Looking ahead, hosts and managers anticipate AI to revolutionise guest communication and rental marketing, reshaping how they connect with travellers and promote their properties.
Steady growth amid economic challenges
Despite a slowing global economy, the STR industry has shown resilience. The report highlights sustainable growth strategies used by operators to expand their portfolios and boost revenue. Hosts are increasingly focusing on organic marketing, leveraging social media, and creating direct booking websites to reduce reliance on online travel agencies (OTAs) like Airbnb and Booking.com.
More than 50% of respondents said they had grown their business by adding more properties to their portfolio, while 51% said they had improved marketing. In a clear sign that tech adoption still has a long way to go, 49% said they had grown their business by using dynamic pricing in 2024, while 35% added new software. In terms of rising rates, almost a third of owners said they had put up prices this year, while 19% said they were offering upsells.
Smart devices dominate guest experiences
The adoption of electronic locks and smart home technology continues to rise, with unique PIN codes replacing static ones as the industry standard. These innovations are enhancing security and improving the guest journey. More than 50% of managers now provide a unique lock code for each guest, while 14% provide an in-person greeting, and a brave 1% leave the rental unlocked!
One stat which highlights the tech divide: 59% of hosts and managers are sharing guest information via a digital guidebook, while 39% are providing a hard copy.
Bookings and pain points
While OTAs remain a vital source of bookings for many, the shift towards direct bookings is gaining traction. Hosts are taking control of their revenue streams and building stronger guest relationships by optimising their direct booking channels. On the flip side, guest communication, accounting, and reporting remain pain points for operators, underscoring the need for streamlined tools and better processes.
In terms of booking source, Airbnb remains in top spot on 42% – but this is down from 50% in 2022. This is partly due to the increase in direct bookings, which now account for 20% of all reservations, plus the growth of Booking.com and Google, which between them account for 14% of all bookings.
One interesting observation is the fact the more rentals you have, the higher your proportion of direct bookings. Property managers with 100+ rentals scored 39% in direct bookings, while managers with under 10 rentals averaged 18%. Managers with 100+ also scored better with Google – most likely due to the fact they have SEO-optimised direct booking websites.
Key stats about the respondents
The report was compiled following input from 347 short-term rental operators, ranging from single property hosts to large vacation rental management companies. The breakdown is as follows:
1 rental | 12% |
2-4 rentals | 24% |
5-9 rentals | 15% |
10-24 rentals | 22% |
25-49 rentals | 13% |
50-99 rentals | 10% |
100+ | 4% |
77% of respondents were based in the US, with 8% in continental Europe and 5% in the UK. 34% of respondents manage properties in more than one setting, while 5% reported managing rentals in two or more countries.
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