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The way we live is changing and continues to change faster than ever before as the world globalizes, apps like Uber and Airbnb help us get to where we need to go. This, of course, has significant impacts on real estate investors, but the good thing is that we are still ahead of the curve.
Every second, six people check-in into an Airbnb, and with thousands of listings in 191 countries across the globe, last year, Brian Chesky, CEO and co-founder of Airbnb, reported that over $80 billion was paid out to Airbnb hosts sharing their properties. Plus, another $1.6 billion was collected for transient occupancy taxes. Amazing right? In just a short time, Airbnb and the short-term rental industry has changed the way we travel and spend our leisure time. Aside from the rapid growth of Airbnb, there are tons of other reasons why you should be excited about the STR industry in the coming years.
There have been obvious changes in the way people live, especially with millennials, the current biggest demographic in the US. The changes are evident in their decision to settle down, the way they live, and how long they live in one place. Since almost everything in the world right now can be mobile, people tend to move more and more, and of course, that ultimately impacts real estate. People won’t be buying properties if they’re only going to be staying there for a couple of months, and that’s where STRs come into play. STRs offer opportunities for people to stay in a place they like for just a short time without having the need to worry about leases, switching utility bills, buying and furnishing the space, but most importantly, the worry to be “locked down.”
As we change the way we live, the way we value experiences also changes. Now you can see people valuing experiences more than material things, which is a good thing, especially for our businesses. People put value in the things they see, the places they visit, the people they meet, and the knowledge they learn, and all of those experiences are heightened when they travel. Travel and tourism have been booming in recent years, resulting in the amped-up demand for short-term rentals. As people continue to value experience and travel, the STR industry is bound to continue growing.
Technology and the internet have changed the way we work. In the past, it was almost unimaginable to see yourself connect your computer to the internet in the middle of Colombia and start working, but today, it’s the new normal for a lot of people. The development of the internet, software, and applications have enabled companies to extend their offices online, making it possible for people to work and travel at the same time. And the whole Tim Ferris 4-hour workweek seems possible because today, work can happen anywhere in the world.
This change in the workplace has also led to people becoming digital nomads, meaning people can work remotely and are not living permanently anywhere, maybe just for extended periods in several months, but with this change, people are free to move between cities and countries constantly. This is where STRs play a big role as it offers exactly what the people need.
Most people who work from home aim to replicate an atmosphere of being in an office. It allows them to process and produce positive outputs. If you will be able to achieve that as a short-term rental owner, you are guaranteed, long-staying guests. Note that your guests have options and you could be that one alternative. They’re having remote jobs that allow them to be nomads but if they find that one place where they can be relaxed while at work, they might reconsider settling.
More and more people are discovering STRs, and it’s just getting started. There are thousands of short term rentals across the world, and the growth is not stopping anytime soon. They make experiences possible that traditional hotels have been unable to. A good example was during the Olympics in Rio de Janeiro. The Olympics attracted 85,000 spectators, much more than the hotel industry could have accommodated. The Olympics has since recognized this, and now Airbnb has partnered with them for the next nine years with the agreement that Olympics only be held in cities that can guarantee an extra 40,000 rooms. Super Bowl events, large concerts, festivals—you name it—when the traditional hotel industry has been unable to provide, the STR industry steps in.
Our future is going to be different; there is no doubt about that. We have a glimpse of what living looks like as its new form is taking shape right now. The freedom that transient living and working provide is and will continue to spur the growth of STRs like never before. The same cannot be said for the traditional hotel. The simple lack of space, a kitchen, and a sense of “living” just didn’t exist in accommodations as they do now. The availability of Airbnbs and STRs has changed the world and the experiences we have, opening up more opportunities for real estate investors and STR business owners like us.
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