Short-term rentals are popular forms of accommodation for travelers. As it did with many other industries, though, the COVID-19 pandemic had a big effect on the hospitality sector. Let’s take a look at how this health crisis influenced short-term rentals and what the future holds.
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How COVID-19 Impacted Short-Term Rentals
The world came to a screeching halt in 2020 when it became clear that the outbreak of COVID-19 was no mere health issue. It was a full-blown pandemic and one that was fueled by a disease so contagious that people had to physically distance themselves from each other. Businesses all over the nation temporarily (and even permanently) shut down, with countless workers losing their jobs or having to work remotely. One industry that took a huge hit was the short-term rental industry.
Given how fast and easy it is to travel from state to state, even country to country, it did not take long for COVID-19 to spread all over the globe. Many countries closed their borders in an effort to mitigate the spread of the virus. The United States imposed strict travel restrictions and bans for the same reason.
There is no denying that the pandemic created a travel lull. Airports across the world were deserted, save for a few workers and flyers. Several airlines experienced massive losses and had to lay off numerous employees to stay afloat. In the case of short-term rentals, which were usually used by travelers, there was a huge dip in income, too.
Both short-term apartment rentals and short-term house rentals went through big losses. Popular vacation rental company Airbnb even suffered revenue losses in the millions due to the pandemic. Clearly, the impact COVID-19 had on short term rentals was immense, bolstered by travel restrictions as well as people’s fear of infection.
Some Listings Fared Better Than Others
While vacation rental companies saw a drop in occupancy and bookings, not all listings were affected. Property listings located in more urban areas took a larger hit than those in rural places. Some of these non-city rentals even performed better than usual in the midst of the pandemic.
Properties such as old castles, coastal retreats, and woodland cabins were highly sought after. These destinations did not get a lot of foot traffic pre-pandemic. But, due to the circumstances surrounding COVID-19, people scratched their travel itch by booking destinations in more rural places that they could just drive to.
State and Local Short Term Rental Restrictions
The introduction of the COVID-19 vaccines paints a hopeful picture, and many states eased restrictions as a result. But, it certainly did not start out this way.
At the height of the pandemic, most states and local areas imposed travel and short-term rental restrictions to stop the fast spread of the virus. These restrictions seriously impeded the short-term lease industry, particularly in places with stricter rules.
For instance, in December 2020, California asked visitors arriving from outside the state to quarantine for 14 days. The state also asked that residents limit movement to only essential travel. This was in an attempt to improve its numbers as COVID-19 cases surged in the Golden State.
Restrictions have since relaxed nationwide, with state-to-state travel now more possible and less troublesome. Still, anyone who plans to travel outside of their area should check local ordinances first.
COVID-19 and Vacation Home Rentals vs. Hotels
Vacation homes were not the only casualty during the peak of the pandemic. The worldwide health crisis also greatly affected the already-declining hotel industry. As vacation rental companies such as Airbnb and Vrbo sprouted, hotels became a less popular choice among travelers. After all, vacation rental companies offered more flexibility and privacy at more competitive prices.
The pandemic tested the stability of both short-term rentals and hotels, with the former coming out on top. According to a report, since the COVID-19 outbreak first hit the United States, short-term rentals have recovered at a quicker rate than hotels.
Aside from the factors that contributed to the popularity of rentals over hotels pre-pandemic, this fast recovery may be due to the desire of travelers to limit human contact when vacationing. Additionally, hotels relied heavily on business travelers, whereas short-term rentals primarily targeted vacationers.
How Cleanliness Plays a Role in Rental Income
Prior to the pandemic, most vacationers chose rental properties based on location and price. During the pandemic, though, another factor emerged — cleanliness.
A recent study found that properties “perceived clean” saw an increase in rental income by 17.5 percent. Moreover, such properties also experienced a rise in occupancy by 16.5 percent. Considering how the coronavirus is transmitted, this does not come as a shock to anyone.
Cleanliness was of paramount importance to guests during the pandemic. But, it will also likely remain a priority after the pandemic subsides. If nothing else, this health crisis taught people the value of cleanliness and proper hygiene.
Short Term Rental Housing Soon to Recover
For a while during the pandemic, things did not look promising for the short-term rental industry. Many considered the significant drops in occupancy and income as signals that this once-thriving industry was coming to an end. But, vacation rental companies, particularly Airbnb, have gone through hardships before.
Property owners proved their adaptability when they switched from short-term rentals to long-term ones. Now, as vaccines continue to roll out and things start returning to normal, the short-term rental industry prepares for a comeback. Experts agree that the industry will recover by the end of the year 2021. This definitely comes as welcome news to rental property owners and cities that have suffered major tourism losses.
While many expect recovery, it is likely that it will not happen all at once. The industry declined at such a fast rate and in seemingly one fell swoop. In contrast, recovery will take some time, and not all areas will experience it at the same speed. Still, the future looks bright.
The COVID-19 pandemic impacted industries in varying ways, with short-term rentals undoubtedly taking a huge beating. As travel bans and restrictions continue to ease up, though, the industry will likely pick up once more. Things may not completely return to how they once were before the pandemic, but there is hope.
Many landlords had a hard time dealing with the effects of the pandemic. From managing the nonpayment of rent to processing evictions, many states and cities had their own say. This is where a property management company can help. Find the best one in your area today using Rental Choice’s online directory.
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