The New Generation Switching Up The Vacation Rental Management Industry
For a long time, vacation rental management has been defined by seasoned talent. Established managers with years of experience were what owners were looking for. However, as audiences and technologies change, millennials have a lot to bring to the industry and will be bringing innovations that will attract new owners.
Millennials will make up 75% of the workforce by 2025. It should come as no surprise then that an increasing number of second homeowners and rental managers are commenting on how the new generation is taking over the industry.
Millennials are a generation known for innovation and flexibility, and now during a time of radical transformation, opportunity and market competition, their skills are propelling the vacation rental industry into a new era. In this article, we will go through how the vacation rental management industry has changed and the innovations that we can expect the new generation to bring.
Vacation Rental Management, The Way Dad Did It
Mom and pop investors turned vacation rental managers are passing on their property portfolio to their children. This is a generational shift we are seeing across the industry. The older generation is ready to retire and is training up their children to continue the family business.
But is this new, younger generation ready, willing or able to take on the role of vacation rental manager?
Why Millennials Make Great Vacation Rental Managers
Vacation rental management jobs provide the stability that many millennials are looking for. We are finding that in addition to many taking over their family operations, there is another group of vacation rental managers that are starting their own business. They are partnering with real estate agents and connections in the industry to start opening doors to a new way of doing vacation rental business. The number of vacation rental management businesses in the US has been constantly growing and now sits at around 23,000.
They Understand the Market
The sharing economy has changed the hospitality industry. Airbnb and other platforms have made it simple to find short term rentals and have opened up new accommodation experiences that are more appealing to a new generation of travelers.
Worldwide, the sharing economy has seen over $12billion of investment. To put that in perspective, that is more than social networking startups such as Facebook and Twitter have received. This continued growth of investment shows that the sharing economy is not going anywhere.
Millennials understand this market. Younger generations coming out of University with staggering debts that average at $32,000 but with many having debts much higher than this. The idea of pursuing the traditional life that the generation before did and buying a home seems unrealistic.
The younger generation has become enthralled with travel, they don’t want to buy houses, they want to explore the world. One poll found that 78% of millennials would choose to spend money on a desirable event over a desirable purchase.
Millennials know how to market their vacation rentals to this audience. Guests also feel comfortable interacting with VRMs who they feel understand their lifestyle needs. This makes millennials great at empathizing with guests and offering services and features in their rentals that will attract young guests.
They Are Tech Savvy
Millennials are a generation that has witnessed significant changes in tech. They have grown with new technologies and embraced them. Their ability to react to change and resourcefulness is a key factor in how they will succeed in the vacation rental management industry.
In times of global change and health and safety being factors now paramount in booking vacations, millennials will be able to quickly implement new technologies to help travellers feel safe and at ease as they vacation.
Technology has become one of the biggest catalysts for growth in vacation rentals. Millennials understand what appeals to holidaymakers. Who better to lead the tech revolution in vacation rentals than the generation who grew up with constantly changing tech and seamlessly integrating it into their lives?
Some of the big trends in technology that millennials will help implement and make industry standards in the coming years include:
- Payment providers such as Stripe and MangoPay are used by just over half (51%) of managers. These tools make it simple for guests to book and pay for their short term rental. It also adds a sense of security that their money is safe, using familiar payment gateways.
- 33% of managers are now using keyless entry. This removes the clumsy key exchange that has been a struggle for the industry for many years. It provides a seamless check-in experience and removes some of the concerns for both managers and guests over in-person interactions when a global pandemic is present.
- Softwares that analyse rates and provide dynamic pricing will help with ensuring maximum profitability and occupancy rates for vacation rentals, keeping owners happy and increasing profits. Currently, 32% of managers use this software but as millennials transition into decision making roles, we can expect this to become more prominent.
- New tools such as 3D tours, chatbots, and noise control devices will help improve customer service and provide heightened security.
AI and CRMs for Inventory Growth
- Most VRMs have pushed inventory growth to the side of their desk and are using post-it-notes, whiteboards, Google sheets and postcards to track and attract new leads. Industry leading property acquisition platforms like Vintory are changing the inventory growth game, and it’s AI and CRM technology like this that millennials easily adopt, while happily leaving whiteboards behind.
Source: Rentals United
They are Flexible and Innovative
Not only did millennials grow up with tech, but they also came of age in an economic downturn. They have learnt to do more with less. These problem-solving skills are paramount in the vacation rental industry and will help them succeed.
Relationship-management, and fixing issues in a timely fashion as they arise are a large part of how managers spend their time. The problem-solving mentality of millennials lends itself well to dealing with owners and guests and swiftly reaching solutions to issues.
Who are the up and coming leaders in the Vacation Rental Space?
We interviewed three of the top Millennial managers to watch across the country as they build the future of the vacation rental industry.
Meet the new generation of vacation rental managers in our next blog post – stay tuned!