How Covid Impacted The State of the Short-Let Market
Posted on 25th June 2022 at 13:18
We are sure you don’t need us here at Tempstay to tell you how devastating the coronavirus pandemic proved to hotels and other forms of temporary accommodation.
This was especially the case for those rooms and property letting businesses reliant on guests arriving for holidays, city breaks and business. In other words, just about every form of regular short-term guest imaginable during the two-year period of on-off lockdowns.
But it hasn’t been all bad news. Unlike many landlords who were left with months of unpaid rent because tenants couldn’t work - and who are still trying to recoup those costs today – most accommodation providers in the short-term rental sector survived.
That’s because the short-term let sector is a young one. And the fact it hasn’t been around that long compared to other forms of letting (i.e. the long-term private rental sector) makes the short-term letting sector more flexible and dynamic. And certainly, during the pandemic, it came back fighting. And it’s a resilience that will serve it well in the future.
Proptech companies introduce new software
Several proptech companies have come up with new software tools which have made the sector more able to cope with such unexpected tools in the future.
During the first year of lockdowns in 2020, software providers helped short-term rental hosts, and hotels, letting agents and those who manage serviced accommodation understand the impact of the pandemic. And, crucially, how to survive it.
Kellen Kruse, Head of Tourism Solutions and Partnerships, @airdna, said: “The pandemic has brought many changes to our lives in tourism the last two years. And if there's one thing we've learned, it’s that data is the currency of travel. We've watched with encouragement, and sometimes dismay, at the changing patterns in how people travel, where they travel, and when they travel.
Short-term rentals, or STRs, have been the centre point for many of these changing patterns.”
The new tools provided the type of data that allowed individuals and companies to navigate the potential effects of continued lockdowns. During the pandemic, for instance, AirDNA provided global insights into locations and times when the short-term rental market was beginning to pick up. It achieved this via its new flagship tool MarketMinder.
Using the Pacing tab, users were able to alter their own property offerings by understanding market-level insights into booking demand and pricing for particular months and times in the future.
Predicting booking trends for locations
The Booking Trends chart highlighted bookings daily over a six-month period, which were made two months, one month and just a week before the stays. It meant short-term rental hosts were able to check the popularity of dates and venues. They could also track exactly how far in advance guests were making the reservation.
What this meant was that hosts were able to tailor their own personal offerings accordingly. That’s because they were able to pinpoint when the short-term market was due to recover in their own location.
Making it easier to set room rates
The Rate Analysis tool on the AirDNA website shows short-term hosts, letting agents and hotel owners the difference in pricing between current rates and those booked for up to six months in the future. It allows them to set their own rates according to their competitors and see what rates guests are choosing to book at.
This proved invaluable during the pandemic when there were lots of questions around whether guests would continue to book holidays in certain locations once lockdowns were lifted. It also showed what they were willing to pay, i.e. that they would pay more for a staycation than previously because foreign holidays weren’t an option at certain times? This was because flights from the UK and to certain countries were banned. It was also because entrance restrictions to specific destinations were proving expensive, i.e. guests having to pay for covid testing at the airport.
It also allowed hosts to more accurately decide how much to charge during busy holiday weekends. For instance, were guests booking while there was still a coronavirus discount on offer? And finally, the Rate Analysis tool showed hosts how much the coronavirus had altered rates in recent months and via year-on-year data.
Short-term letting proves a far less risky solution
The result is that short-term letting proved far less risky an option for accommodation providers during the pandemic than being a landlord. Many property owners who had rented out apartments and houses in the private rental sector lost rental income and got behind with mortgage payments.
Income was also lost in the short-term rental market sector. But that was only initially. Software made it easier for hosts to predict where the demand was going to be and when (as well as how much to charge). This allowed those hosts to be prepared. It also gave them data to put into reports for shareholders or loan providers that business would soon be ‘back on track.’
Get in touch
At Tempstay, our aim is to make short-term letting as easy and as smooth as possible for both landlords and tenants. We achieve this by using a face-to-face approach; we get to know our clients, what they are looking for and how they like to operate.
But it’s not only our landlords and tenants that we like to get to know. We’re also extremely familiar with our locations, to the extent that our staff actually live or grew up there. That way, we can provide the kind of service that we would appreciate ourselves. Those locations are currently in London and the Home Counties. We are based in Berkshire, near Heathrow, and all our properties are classed as ‘luxury.’
If you would like to know more about how we operate – whether as a potential landlord or tenant – then do get in touch with our very friendly team. You can give us a call, tel: +20 336 24111, or drop us an email via firstname.lastname@example.org, and we will get back to you as soon as we possibly can.
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