4 Reasons to Be Optimistic About the Future of Travel
The entire world has been affected by the coronavirus pandemic. With travel restrictions, flight cancellations, border closures, and in some places, strict regulations around vacation rentals, COVID-19 is having a significant impact on the short-term rental industry.
Property management companies have already adapted quickly to the new COVID-19 age of travel. Some have been pivoting from their usual target audiences to appeal to the new types of travelers we’re now seeing – self-quarantiners, staycationers and more. Others are revamping their cleaning operations, introducing new cancellation policies or implementing technology to limit human interaction.
And although there’s no way to tell definitively what the future holds, we’re highlighting data collected over the past few weeks that demonstrates the positive impact of these new tactics and gives us a good reason to be optimistic about the eventual recovery of the travel and short-term rental industries.
1. Staying Home, But Dreaming of Travel
Even though almost everyone is confined to their houses right now, we’re seeing that many are already daydreaming about the first vacation they will take post-coronavirus. In fact, people are thinking about – and actively researching – travel now more than ever before.
Google Trends ranks various search topics from 1-100 by interest over time, with 100 representing peak popularity. Data from across the US shows that while last year at this time the search term “when can I travel” had a ranking of approximately 33, it reached peak popularity the week of March 22-28, 2020, scoring 100. This trend appears globally as well: Over the past 90 days, it more than doubled in popularity from 42, reaching 99 on March 29th, 2020.
“Staycations” – a hybrid of “stay” and “vacation” — are a growing trend in the short-term rental industry – with more than half (53%) of all Americans having taken one. And, in the midst of coronavirus, they are still on everyone’s minds. Google Trends shows that interest in staycations is not only consistent with this time last year, but it is also higher than it was in the summer of 2019, hovering around 50.
2. Some Markets Are Already Showing Signs of Recovery
Although global occupancy rates are low, we are now seeing some travel markets begin to recover. China is starting to show signs of market stabilization – about 87% of the country’s hotels are now open – growing dramatically from a low of 40%. Occupancy rates are also starting to turn in a positive direction, from 10% to 22%.
As these positive trends emerge, we see renewed faith in travel, both among industry professionals and among the general public. Airbnb just announced that Silver Lake and Sixth Street Partners will invest $1 billion in the company in a combination of debt and equity securities, reinforcing the understanding that travel will come back, bigger than ever. As Airbnb Co-founder and CEO Brian Chesky put it, “The desire to connect and travel is an enduring human truth that’s only been reinforced during our time apart.”
At the same time, when you look at markers like the CBOE Volatility Index — also colloquially referred to as the “fear index” — which measures the stock market’s expectation of volatility, it is declining compared to last month. This is another sign that we are on the right path towards recovery, even if it will take some time.
3. Property Management Companies Are Ensuring Stability by Adapting Quickly
As property management companies navigate the impact of COVID-19, many have implemented new strategies to mitigate revenue loss and maintain business stability. Tactics property managers have seen success with include implementing stringent cleaning protocols, diversifying market channels, adjusting to attract new audiences and offering discounts or flexible cancellation policies.
Some property management companies, like Japan’s Breakfast and Vancouver-based Restavio, have seen success by adjusting pricing on a daily basis to attract last-minute stays and offering significant discounts as needed; both property management companies are also providing free grocery delivery. Others, like property management company OptiNest of Australia, are emphasizing how they are addressing COVID-19 head on by adding labels to their listing profile photos — for example, sanitized property, enough toilet paper, masks provided, fast WiFi, PlayStation and games provided, etc.
4. Travel is Here to Stay
Given the current climate of COVID-19, it’s not surprising that many property management companies have concerns about the immediate future. However, it’s important to remember that at the end of the day, travel is a megatrend — and one that won’t just disappear. In fact, in 2019, US residents booked 2.3 billion trips for both business and leisure.
We’ve seen in the past that travel can come to a screeching halt — but it always bounces back. As Seth Borko of Skift wrote: “9/11 certainly changed the way we travel — we still queue at airport security after all — but it didn’t stop it. So too, we expect coronavirus to transform, but not stop, the travel industry.”
Resources to Help You Navigate COVID-19
As we keep an optimistic eye on these uplifting trends, we’ve also created and gathered additional resources to help property management companies navigate the implications of coronavirus at present. Take a look at our COVID-19 Infocenter for information to help you make smarter decisions to ensure business stability throughout this challenging time.