Living in Colorado, I often find myself in resort towns for ski weekends. I like to have a look at properties for sale or vacation rental properties while I am there, as I know this is big business, and I am curious as to the marketing strategies that I might see from agents, brokers, and vacation rental companies. Surprisingly, I have found that there are very few videos out there, both for homes for sale in mountain towns and for rental condos. Because of this, the companies that are first to adopt a video marketing plan and put it into action will be ahead of their competitors in these resort/ski towns.
Since I was a bit surprised to find a lack of video in these beautiful places, I decided to jump in and take a look at beach vacation destinations and second home destinations in general. What I have found is that the lack of video isn’t just the reality in the mountain west, but in most vacation markets. So, let’s take a look at some facts and figures, and if you are working in one of the many vacation markets around the country and world, the time is now to embrace video and leave your competitors wondering why you are capturing all of the local business.
Clearly, there is a big difference between homes/condos for sale in vacation markets and homes/condos that are available for short-term rentals. In today’s post, we will look at the latter, the short-term rentals (stay tuned for a future blog post, coming soon, about homes and condos for sale in vacation markets and elsewhere). We know that these properties have one thing in common: with buyers/renters coming from far away, having the most complete marketing portfolio for a given property is a must.
Short-Term Vacation Rentals
This is the market that could benefit from video the most. Just think about all of the condos and homes out there in ski towns, beach towns, etc., that are rented out by the week sight-unseen. Producing one video for each condo gives you an incredible return on investment. Essentially, each video, comprised of property-specific footage and evergreen footage of the area, itself becomes evergreen content, as it will be used and reused season after season. If renting properties in a vacation market is your gig, video is your new best friend. The key: get to it before everyone else does.
Vacation Rental Statistics
-In 2018, for instance, there were 23,000 vacation rental companies in the United States, making up around 20% worldwide (visit Hostfully to learn more).
-According to Hostfully, there are roughly nine million second homes in the USA. Of those nine million, they report that 45% are professionally managed, and 25-35% are rented out.
-VRM Insider reports that the online vacation rental spend in the USA in 2019 was $14.458 billion. Further, they projected the number of vacation rental users during 2019 in the USA to be 31.88 million. Finally, they report that website users average only 59 seconds on online booking sites.
-Citing the NAR, VRM Insider asserted that 30% of vacation rental homeowners would rent them as short-term rentals in 2018, while 32% of investment homeowners would rent them as short-term rentals in 2018.
-The following statistics and graphics come from this great article from iPropertyManagement (which I highly recommend checking out in detail):
-”70% of vacation rental companies like Airbnb and VRBO are small, managing 1-19 units. 20% of all vacation rental companies are medium-sized and manage about 20-99 units, and the remaining 10% are large companies that manage over 100 units.”
-”Vacation rentals are expected to topple the hotel industry by the year 2020.”
-”43% of hosts who lease their primary residence manage all aspects of the rental. 38% of hosts who lease a secondary residence do the same.”
Clearly, the vacation rental market in the USA is huge, accounting for ⅕ of the worldwide market. What we see is that there are many players in the vacation rental game: individuals offering full-service rentals; small companies; medium-sized companies; and large companies. Further, we have now learned that, for the first time, these rentals will overtake the hotel industry this year in terms of number of stays. We also know that potential renters are not engaged by rental sites, as we noted earlier that people are spending less than a minute on rental sites.
Vacation Rental Target Demographics
So, who is renting and how are they finding properties. Let’s take a look at these two graphics to put that into focus:
(Above images taken from iPropertyManagement.)
So, we know that Millennials comprise a large percentage of travelers, and we also know that they tend to use mobile devices to find properties and make bookings. Clearly, they aren’t the only generation involved in this, but they make up 40% of online bookings.
This article from VRM Insider succinctly breaks down the fees from rental sites, as follows:
-Airbnb charges 0-20% service fee to guests and 3-5% transaction fee to hosts.
-HomeAway charges 6-12% service fee to guests and transactions fees of 8% or more to hosts.
-TripAdvisor charges an 8-16% to guests and transaction fees of 3% to hosts.
-Booking.com does not charge guests but charges hosts 10-25%.
-Expedia does not charge guests but charges hosts 15-20%.
We began by looking at the overall state of the vacation rental market in the USA, which was just to point out that it is a large market with a lot of potential. We followed that up with some statistics (that were a bit wide-ranging). So, here we are. We know that people are moving away from traditional hotels and towards vacation rentals. If you are an owner of such rental properties, or if you manage them, there are things you can do to stand out from the competition.
Of course, it is difficult to compete with such big names as Booking, Expedia, AirB&B, and the like. However, it isn’t impossible, and I would assert that video is one way to set yourself apart. These sites don’t currently allow video for rental properties posted, and they charge a lot in fees (sometimes the majority to the renter, sometimes the majority to the host). If you can find a way to market your property locally, and can add videos to your rentals, you have the opportunity to tell a story for each property, as well as the story of your town in general. By blending footage of your area (skiing, hiking, surfing, lounging, etc.) with property-specific video footage, your viewers can truly see what life is like in your property.
I mentioned that it would be hard to compete with these big companies, and it will, but the way to do so is by creating a better experience for your potential guests. There are several ways to tackle this task:
-Go it alone. This is going to be the most difficult, but if you have the time and energy, you can produce videos, embed them in your site, and play intelligently to gain the best search engine optimization in your area.
-Partner with local businesses. Is there a specific activity or event that causes people to flock to your area? If so, pitch your business to associated companies and see what kinds of terms you can reach.
-Find a local rental agency. If there is already a company that does business locally, this could be a great partnership for you. Sure, there will be associated fees, but they will probably be less than working with a national-level company, and it is more likely that they will work with you on the video idea. Particularly if you are the first, or among the first, in your area to employ video for rentals, you will likely see its value quickly, as website visitors are drawn to video.
If you own rental properties and are interested in pursuing video, I invite you to learn more by visiting the WellcomeMat Blog site, as there are many articles that could be of use. Please feel free to join the conversation on any of the blog posts and don’t hesitate to get in touch with us if we can be of assistance.
If, on the other hand, you are a localized company specializing in short-term rentals, you can blow away your competition by enabling clients to upload and embed video of their properties. As mentioned above, please visit our blog for many useful articles on the subject of video in the real estate world.
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