Short-term rental properties becoming a preferable choice for travelers: Guesty COO
Vered Schwarz, President & COO of property management platform Guesty, joins Yahoo Finance to discuss the surge in booking reservations for short-term rental properties and the outlook on travel trends.
Video Transcript
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ALEXIS CHRISTOFOROUS: The experts say if you're thinking about traveling this holiday season, book your flights early. But our next guest says even more important perhaps is to book where you're going to stay before it's too late. Here to discuss is Vered Schwarz, president and COO of the property management platform, Guesty. We're also joined by Karina Mitchell. Vered, thanks so much for being with us. How about giving us just an overview to start? What do bookings for short-term rentals with companies like Airbnb and others look like as we move closer to the holidays?
VERED SHWARZ: So I think we've all noticed that during the pandemic in the past year and a half, short-term rental properties have really gone mainstream and being the preferable choice for travelers looking for a safer, more secluded space, rather than a hotel with more amenities for longer term stays, such as a working-from-home environment, kitchens, and further amenities. So as a result of that, we've seen an increase in bookings throughout the holiday seasons, with numbers going as far as 300% higher than last year for Thanksgiving and 400-plus% higher for Christmas season.
Not only that, prices are going up dramatically. So just to give you an example for Christmas, the average nightly rate has gone up to $600 a night compared to only $332 pre-COVID in Christmas of '19, which means that a lot of people really prefer to go and book short-term rentals for the holiday season. That includes people that didn't travel throughout COVID and are really looking to get out of the house and travel and also prefer the short-term rental industry, which means that there is a supply and demand trend of pricing going up.
KARINA MITCHELL: So the numbers are astronomical, right? We're talking about 302% year over year for Thanksgiving and 469% increase for Christmas. How much of this is pandemic related, and how much of it is just a shift to the way we holiday? Is this a trend that's going to continue, do you think?
VERED SHWARZ: Well we've seen that shift throughout the pandemic, and I believe it's here to stay. I believe that a lot of people that never considered going anywhere but a hotel have experienced Airbnbs in the past year and a half and found it to be very pleasant, very comfortable, having the advantages of both worlds, right? The advantages of a hotel with the comforts of home, having larger spaces. Especially families traveling together found it as a preferable choice.
And as a result of that, I believe we'll continue to see that trend of preference towards short-term rentals throughout the following years. But definitely the holiday season is a great time for families to gather together, and homes are a perfect opportunity to have family dinners and host a lot of different friends from different locations in one space, especially after not seeing each other for quite a while. So definitely it's an upward trend specific for the holiday, but also a trend that will continue with us of short-term rentals becoming a preferable choice for travelers.
ALEXIS CHRISTOFOROUS: What about where people are choosing to travel? I know that for a great deal of time during the pandemic people didn't want to go too far away from home. Are you seeing that they're venturing out a little bit more now?
VERED SHWARZ: Yes, definitely. First of all, still a lot of domestic travel. US travel is about 95% domestic. It was always more leaning towards domestic, but now it's almost entirely domestic. People don't want to have the hassle of going abroad, taking the test. They're not sure exactly what are the restrictions. So they prefer to stick with the familiar.
But if in the past, in the first month of the pandemic, we saw a lot of people looking for drive-to destinations within two, three hours drive from home, now we're definitely seeing people travel from West Coast to East Coast and really find new locations that they haven't gone to before. But looking for the outdoors, mountains, lakes, the seashore-- those are all very popular destinations.
KARINA MITCHELL: I'm going to ask a question that I probably think I already know the answer to, which is, when should people be making these bookings? I'm pretty sure you're going to say last week or last month. But what happens the longer that people wait? Do we expect prices to go up significantly?
VERED SHWARZ: So first of all, we're seeing prices go up all the time because there's more demand, less supply, and prices go up. What's also interesting to note is that during the pandemic, a lot of booking channels, as well as property managers, changed the cancellation policies to be much more flexible because they realized people would not want to book with no cancellation possibility. There were so much restrictions and unknowns and variants. So I really recommend to travelers to book as early as possible, but note the cancellation policies. And if you can book in advance and have flexible cancellations, you win both worlds, really. And if you wait last minute, you'll get the same thing but at a higher price.
ALEXIS CHRISTOFOROUS: All right. We are going to have to leave it there. Thanks so much for joining us. Vered Schwarz, president and COO of the property management platform, Guesty.
