How to build an Airbnb Business: Future outlook from the biggest hotel chains in the world
Compared to the hotel industry, the short-term rental industry is still just a small share of the pie. Although it is growing! And not just growing but merging with the hotel industry. The hotel industry is taking note of the STR industry and vice versa.
But at the end of the day, the hotel industry is still a giant and the travel industry’s leader. Some hotel chains have tens of thousands of rooms and so they have access to incredible data. Data on the return of work travel, data on the average length of stay and average price, and perhaps most interestingly, data on the future outlook of the travel industry as a whole!
This week I want to share some insights I learned from a conference I recently attended with some of the biggest players in the industry. I think you will find what they had to say to be quite exciting 🙂 A quick review on:
- The great “merger”
- Is business travel returning?
- What areas are most ripe for investment?
- Industry expert’s opinion on a potential “recession”
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Click Here to view TranscriptWelcome to short-term rental riches will discuss investing in real estate but with a specific focus on short-term rentals quick actionable items to acquire manage and scale in your portfolio I’m your host Tim Hubbard.
Welcome back to short-term rental riches podcast here again another week and trying to provide all of you the best inside I possibly can my team and I have managed over 20000 guests in my own personal portfolio that spread across multiple cities most you know I’ve managed to most sat up living abroad so I’m coming to you from Columbia right now but I’ve got some great data from a recent conference today joined data from some of the biggest hotel companies in the world and some of the biggest players in the industry and it’s exciting and so this is gonna be a bit of a Hodge podge episode where I’m going to be giving you some stats that they talked about but I think the overall impression is that we’re in pretty good position if we are operating short term rentals or if we’re considering that people are traveling there’s no doubt about it and all of the big players at this conference are very bullish very bullish in the future even if we have a recession they still think travel demand will be high why because travel and life are merging right so they started this conference off with what they call the great merging and we already know this we already know that a lot of people are working virtually in fact kayaks CEO who is also at this conference and they have over 2000 employees they’re all virtual which means we’re going to be getting the longer reservations because people. Can stay longer we know that we talked about that in prior process but that’s great for us a short term rental operators because it cuts down on our operating expenses and it increases our revenue right because our occupancy is staying higher if we have a longer term stays normally right so I want to give you some stats ma’am formation just kind of randomly pick out from this 2 day conference today joined I guess one of the really exciting pieces is that these big hoteliers are seen the return of corporate travel so in C. R. hotels which has over 22000 rooms in the U. S. or I think the top third in the U. S. in terms of hotelier and they said before the pandemic 70 percent of their profits came from work travel and the other 30 percent was leisure during the pandemic corporate travel dropped to 10 percent and leisure at 90 percent so they’re seeing a big return to corporate travel and most are the best places they’re saying for corporate travel or to invest in the future are places urban places that have a leisure component because if they can attract business travelers those travelers now have the flexibility to stay around for the weekend or to stay longer and so if you can couple both those together that is a good place to be looking good place to hone in on for potential investment in the future as you know if you listen to podcasts while I like the same places in fact most all my properties are in a somewhat urban area and I would say with a leisure component to so in cities that have a decent population $500 or more I think provides a really good opportunity for investment now it depends on the affordability of the city we know inflation everything’s just jacking prices up so people are moving to more affordable places so. Consider that if you’re still on the search if you found in urban place that’s good for corporate travel but also has the leisure component that’s a double win so that was exciting to see that they’re seen a lot of corporate travel come back already kayak for example said that 30 percent of their searches now our for corporate travel and they have a really easy way of seeing all this data right they have this platform just like Airbnb does and on the backside they can do data mining they can track where these searches are coming from and what they’re searching for and so they have some really really good inside right now 30 percent of their searches are for corporate travel quick intermission I’m super excited to announce the dates for next live event live and in person in Memphis Tennessee August 19 to 20 first this is our fourth live event and they just keep getting better and better and there’s not a ton a room so I hope you can make it will go through my whole process from start to finish what I look for properties how I find them how I set them up how I manage them how I manage them remotely with my teams and how we can scale the whole operations to retake it from start to finish perhaps one of the most exciting parts we’re gonna get on tour bus and we’re going to visit some of my actual properties in action in the operation really hope you can join us you can check out tickets at rest methods.com and again it’s gonna be a live in person I’ll be flying back from Colombia August 19 through the 20 first I hope to see you there. So along the lines with this great merging there’s also a sense of professionalism that Gasser now searching for right one hotels and short term rentals were not fond of it all in the same picture a lot of people the quality is kind of has been missing not across the board of course but someone stays in a hotel for a long time and has instead allowed short term rentals doesn’t necessarily trust the quality a short terminal so that is a big component in the future of the future success of our short term models making sure that we have that quality and you’re seeing a lot of big brands pop up that have been able to prove that so Selena for example they have over 100 properties thousands of rooms I stayed in them myself it’s a really cool sort of short term rental living work environment they’ve incorporated a lot of things but their branding and they’re growing very quickly and there were one of the reasons are growing quickly is because they’re able to provide the quality. I am consistency so there’s some other ones like blue ground as thousands of rooms again there are providing quality consistency and that’s what’s allowing them to grow a lot the VP of Marriott was also on the conference and get this they started their own short term rental or vacation it’s called homes and villas by Marriott they started with about 2000 units in 2019 so before the pandemic they have 60000 plus properties now so they have grown 30 times and the last few years do you better believe they’re bullish on short term rentals as well of course they partnered with professional managers so they haven’t picked up these properties one by one but they’re really growing this segment because they realize that a lot of people that were staying at the hotel are preferring short term rentals and now there’s different use cases for short term rentals right sometimes it’s much better situated for a family versus a hotel room so depends on the use case to Marriott sees a lot of their bond void members which they have a lot of good data on they see them booking hotels but they also see the book in the short term rental so they have a different use cases right so I thought that growth was exciting with Marriott there is a lot of room for all of us the little guys in this industry as well people just enjoy staying in short term rentals and they provide something different but there is a bit of merging going on between hotels and between short term rentals and that’s where we’re seeing these brands pop up they can insure quality that’s were seen things like Marriott homes and bill us where they’re managing their own short term rentals now another thing I thought was interesting this was data from Skift research they do tons and tons of research on short term rentals and surveys and all this all throughout the year so check them out if you haven’t heard. 8 of them before you can check out some YouTube videos Skift research’s the name they said by 202562 percent of over 600 hoteliers that they interviewed said that they would have a fully 0 percent contact lense experience by 2025 to over 600 hotels said by 2025 they were gonna have an experience for the gas where there was no contact so they’re not handing over key or anything like that very similar to our short term rentals are right must you have a giant villa that has a lot of mansion or something that requires a lot of attention most of us have a keyless entry system and our guests are checking in and we’re not meeting most of them so hotels are kind of margin in that space a little bit too so we also heard from Sonder on that call you may have heard of Sonder before but they’ve got over 8000 rooms now and they’ve been growing really really quickly they are also placing a big emphasis on corporate travel so I know we all find corporate travel’s gone for ever but it’s just changed there are companies like contacted don completely virtual but it doesn’t mean people aren’t going to travel for work and when they do travel for work now they want an experience so even though a lot of the jobs are gone it in a physical office the jobs that are still traveling for business are staying longer and they want a little bit more of an experience so I think these urban areas that have a leisure component are really good I’m excited that the biggest hotel names in the world our Super Bowl ash on travel even if we have a recession so so real quick episode this week I’m trying to stay on top of us much information as I can I I am in this industry and growing myself and so hopefully that provides a little insight for you or. Or some valuable feedback hopefully it motivates you that this is an industry that’s not going away and I think it’s still a great time to jump in the short term rentals if you haven’t already so until next time I hope you have a wonderful day and we’ll talk to you soon. Want to get on the fast track to financial freedom for short term rentals what all searching the properties you choir you want to make sure that you acquired the right properties I want to give you my you doctor will show you how to do just that there is no charge to my gift to you for being one of our subscribers just go to restmethods.com that’s R E S T methods.com.
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