On April 25 and 26, 2016, the rented.com team joined the Vacation Rental Managers Association for their Eastern Seminar here in our hometown of Atlanta. A chance to mingle with the industry's most sophisticated leaders, the VRMA Eastern Seminar covered everything from regulation to revenue fundamentals to housekeeping basics.
Here is what the Rented.com team thought you should know:
The Current State of the Industry:
2016 Vacation Rental Trends
Bill Furlong, Vice President and General Manager of HomeAway, speaks on the latest industry trends.
There is a lot happening in the vacation rental industry in 2016. Short term rental regulations are in constant flux, large companies are rapidly joining the space, and distribution sites are reworking their strategies, affecting homeowners and managers alike. Despite these variables causing uncertainty, there are larger trends in the industry that are keeping the industry optimistic.
Bill Furlong, Vice President and General Manager of HomeAway, led a session at the VRMA East on the latest industry trends and shared several statistics on the increasing opportunity within the industry:
While in 2010, only 8% of travelers had stayed in a vacation rental, by 2014, 25% of travelers had.
A whopping 75% of people who travel still have not experienced a vacation rental, which presents ample future opportunity for every homeowner and manager in the industry.
That remaining 75% of travelers stay mostly in hotels, motels, bed and breakfasts, cruises and other resort-style accommodations, but their demands and preferences for accommodation are likewise rapidly changing—especially when 32% of HomeAway and VRBO’s bookings in 2015 were by first-time vacation rental users.
As the number of travelers considering vacation rentals increases, the number of vacation rentals is growing as well. Claiborne Yarbrough of Barefoot Technologies Corporation writes
“Inventory continues to grow. The National Association of Realtors reported last year that vacation home sales were the highest that they have been with a 57% increase.”
With both sides of the market on the rise, it is no surprise that a recent study estimated that “the industry will grow at a rate of 7.59% every year until 2019, putting the market value at $169.7 billion by 2019, just three years away.”
Vacation Rental Advocacy: The Latest from the Front Lines
While the industry continues to grow, however, vacation and short-term rentals still continue to face backlash in regard to regulations.
Here is the “cut to the chase” version of the ongoing controversy:
The Argument Against Short Term Rentals
In its simplest form, the issue with the renting of vacation homes in the sharing economy is that a number of local neighbors do not want transient guests staying in dwellings around their primary residence. Although the reasons this side offers are seemingly endless, here are the main ones:
- Preservation of neighborhoods
- Nuisance (parking, noise, trash, etc.)
- Affordability of housing
- Availability of housing stock
It seems that the activists against short term rentals are not concerned for one single reason, but rather multiple including the safety of their families, their personal happiness, and the wellbeing of their communities.
The Argument For Short Term Rentals
Those supporting short term rentals and fair regulation support them primarily due to the tangible data. Short-term rentals stimulate the local and state economies to noteworthy magnitude.
Here are some examples of how communities have been positively impacted after lifting their short term rental bans:
- Economic Stimulus: $272 million
- Jobs Created: 2,539
- Economic Stimulus: $200.7 million
- Jobs Created: 2,587
- Economic Stimulus: $283.6 million
- Jobs Created: 3,100
Solely by lifting bans in three markets, the U.S. economy received a boost of over 3/4 of a billion dollars ($756.3 million) and opened jobs for nearly 10,000 citizens.
Short term rentals in the state of Florida alone likewise bring in $31.1 billion and create over 300,000 jobs ANNUALLY.
This data makes a pretty good case for those who support the allowance of such rentals. Although it does, it doesn’t necessarily override the arguments against the operation. That being said, is there a fair resolution, and what is it?
Local governments have been holding hearings to get both sides of the story. Although that seems like a feasible way to hear both sides, one major dilemma is that a vast amount of short term rental advocates are second homeowners and therefore not local primary residents in the markets of their vacation homes.
Because of this, local hearings can seem overwhelmingly one-sided, which makes it challenging to get a fully developed case, and often leads to long spans of time before any decision is made.
Although the implementations differ per market, most of them result in adding zoning, licensing, tax, and code inspections as parameters. Overall, it seems that the best resolution between both parties is instead to fine-tune the regulation of short term rentals, rather than to remove them entirely.
To stay up to date on those regulations, track your local regulations here.
Want to see more from the VRMA Eastern Summit? Check out our other articles from the event:
- How Property Managers are Growing and Onboarding New Vacation Homes: Read More
- How Homeowners and Property Managers Can Compete With a Consolidating Vacation Rental Industry: Read More
- Revenue Fundamentals and Vacation Rental Fees: Read More
- The Guide to Selling Your Vacation Rental Company: Read More
Written by Mickey Kropf, Taj Akmal, Trey Monroe, Michael Goldin, Richard Kaiser, Lauren Kester, Stewart White, Paul Liguori, Justin Conway, Tanner Bruce, and Monika Haebich.