The beginning of the pandemic in March 2020 made "shelter in place" a household slogan, with nationwide shutdowns hammering the short-term housing rental market. Vaccines and the lifting of stay-at-home orders — combined with the proliferation of remote work — are bringing people out of their homes into temporary new digs for days at a time, if not longer.
"When lockdowns and travel restrictions lessened, we saw people either going to second properties out of state or looking for a short-term rental," said Leah Gibbons, east region vice president for Howard Hanna. "People realized they could social distance and work while being in another location. They looked for properties with pools and more bedrooms for multifamily get-togethers."
As the economy reopens, Americans are giving a boost to the short-term rental industry through so-called "vaxications" that combine remote work and a hunger for new scenery. A 2020 Harris poll revealed that 74% of respondents who work remotely would consider operating somewhere other than their home for an extended period of time.
Through the first quarter of 2021, about 24% of bookings made through the Airbnb home-sharing platform were for stays of 28 days or more – up from 14% in 2019. Roughly half of all properties reserved were done so for stays of at least seven nights.
Howard Hanna is experiencing a similar trend among investor clients that purchase rental properties. Individuals and families that would spend a week away from home are now booking month-long layovers. Vacation rentals in the Lake Erie islands, as just one example, filled up apace with warmer weather, knocking typical seasonal trends out of their axis.
"You can't find a rental anywhere," Gibbons said. "Usually people are renting from Memorial Day through Labor Day. Now we're seeing rentals through October."
Many landlords crushed by COVID sold their rental homes during the height of the crisis, noted Edith Ross, a real estate agent with Russell Real Estate Services in Strongsville. Demand outpacing supply in traditional vacation rental markets — typically away from urban centers — is driving rate increases to most destinations. According to Transparent, a vacation rentals data company, Airbnb rentals in July and August are expected to average around $220 compared to $185 in 2019.
"Someone traveling who doesn't want to be in a hotel may do a short-term rental at an Airbnb because it's more convenient," said Ross. "They're getting a full house instead of a small room. There's less physical contact with people and you can quarantine yourself in your own environment."
Travelers looking to avoid cramped hotel rooms is a trend that market observers don't expect to dissipate alongside any continuing decline in virus cases. Even fully vaccinated individuals may choose to eschew crowds or places like hotels with shared common spaces.
"Though people are vaccinated, they still want to feel safe and be around family," Ross said. "This type of (short-term) model gives them that peace of mind. They can get away and still feel like they're home. That's going to be a trend in the future even more than it is today."
Many holidaymakers are mixing in a few days of work with travel, giving them options when it comes to length of stay, said Caroline Burns, head of public relations for HomeToGo, a vacation rental search startup. A "Return of Travel" survey conducted by the company earlier this year found that 71% of would-be vacationers planned to work remotely during at least one of their trips in 2021.
"The rise of remote work is a huge game changer for our industry," Burns said in an email. "The pandemic accelerated an already underlying trend of workplaces becoming more flexible. And what would be better than a vacation rental to spend time working while the rest of the family can enjoy their leisure time? Imagine doing this in a one-room hotel room. Vacation rentals can literally make you feel at home, and this is acknowledged by our users."
Demand for short-term rentals will continue to grow as more second-home buyers choose to live in those homes rather than rent them out, remarked Gibbons of Howard Hanna. In Northeast Ohio, the flexibility of remote work last winter sent families to rentals in warmer climes for three-month stays.
Gibbons said, "If people see toward the winter months that they can work remotely again, they might decide to change their surroundings and work from a different area."
The falling supply of available rental homes, coupled with increasing demand for lifestyle perks such as pools and home theaters, is allowing rental companies to challenge the market and then some. From a marketing standpoint, companies are pushing amenities during virtual tours, giving "digital nomads" a desirable snapshot of their hopeful home away from home.
"An option to spend a period of time away from home keeps the environment fresh for people, and offers them a lifestyle they may not have enjoyed previously," Gibbons said. "That's something that will continue. There's more interest now in work-life balance, or friends going in together to rent short-term. People just want to change things up and give themselves better quality of life."
Burns predicts the normalization of remote work will attract new target groups for the vacation rental industry.
"We're seeing many more individuals as well as entire families who want to attend virtual classes and work remotely for a few weeks," Burns said. "We've also seen more attention being paid by hosts to advertising their internet speeds and private workspaces within the home, where multiple people can be on calls at the same time."
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Ability to work remotely is energizing the short-term rental industry - Crain's Cleveland Business
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