Managers of multiple listings on Airbnb and Vrbo have revealed that a certain type of rental is struggling to attract guests this summer. These rentals are a step up from the cheapest options available, but they lack the luxurious amenities and furnishings of high-end properties. They may have outdated furniture or limited amenities, such as a pool without a hot tub. Additionally, the hosts of these properties tend to be stubborn about their pricing, making it difficult for them to find guests.
The current summer season has been particularly competitive for hosts, with demand at an all-time high. According to short-term analytics site AirDNA, hosts’ revenue is expected to decline for the first time since the pandemic began. Average occupancy rates are also forecasted to fall slightly, indicating that the properties in the mediocre middle are bearing the brunt of the downturn.
Jamie Lane, the Chief Economist at AirDNA, predicts that this trend will continue as short-term rentals become more mainstream. With the rising popularity of vacation rentals, travelers have higher expectations and are less willing to settle for mediocre options.
While these properties struggle, luxury properties are experiencing high demand. The clientele for these properties is often financially unaffected by economic uncertainty and is willing to pay a premium for a luxurious experience. Managers of luxury rentals report high occupancy rates, with some properties being booked up to 80% this summer. These properties offer features like infinity pools, bocce setups, and pickleball courts, and can cost up to $800 per night.
On the other hand, budget travelers are facing an abundance of options but have high expectations. They want accommodations that exceed their own living spaces, resulting in a preference for aesthetically pleasing listings. Guests are attracted to properties that stand out and offer a higher level of luxury compared to their own homes. Listings with outdated interiors and drab furnishings are being overlooked in favor of properties with modern designs or unique styles.
In conclusion, the summer season has highlighted the struggle of properties in the mediocre middle. These rentals, lacking both the luxurious amenities of high-end properties and the affordability of budget options, have difficulty attracting guests. Meanwhile, luxury properties are enjoying high demand due to a clientele unaffected by economic uncertainty. Budget travelers have high expectations and are seeking properties that exceed their own living spaces. The vacation rental market is evolving, and hosts need to adapt to these changing preferences to attract guests and improve occupancy rates.