Predictions For The 2019 Short-Term Home Rental Industry

Prior to the proliferation and success of short-term residence rental mobile apps like Airbnb, many more people booked hotel stays as their accommodation of choice for overnight stays in places where they don’t live. Today, tons of people around the world opt for staying in “Airbnbs,” an example of how people have begun referring to as homes booked through the intermediary via the company’s namesake.

In 2018, according to a well-trusted rental research firm’s study, some one-third of investment property owners rented or attempted to rent their holdings in the form of short-term home rentals. 

The popularity of seeking homes or apartments as short-term rentals as opposed to rooms in hotels or bunks in hostels has risen dramatically over the past few years. This interest growth has also been attributed to the establishment, growth, and similar success of web-based intermediaries through which people can more easily compare short-term home rental listings. 

Will more intermediaries like Airbnb sprout up in coming years?

We’ve already established that the aforementioned short-term home-sharing intermediaries have experienced big-time growth in the past few years. 

Many people wonder whether they’ll be able to choose to do business with a broader choice of intermediaries like Airbnb. The market is currently packed with about 25 major intermediaries, though the intermediaries on the latter end of this list are much smaller than those on the former. 

As years pass, the gap in these companies’ size and popularity will continually grow. There’s no way to tell how many big-time competitors the market will be left with toward the end of such a change-causing period, though it’s likely that only a handful will exist. 

Here’s a major reason why a few intermediaries will far exceed their competitors’ sizes

The best time to invest in an industry is when it’s growing. Early adopters most frequently grow more than their competitors that butt in during the other phases of the business growth cycle. 

However, because most investors aren’t fortunate enough to catch on early enough in the industry’s life cycle, they usually hop on board in the growth phase. Right now, the market is on the front end of this period of its life. 

Since the market is ripe for investment, countless billions of dollars have been pumped into these intermediaries and other businesses which operations are deeply related to those of such intermediaries. Many more private equity firms and other investing interests are likely to make their way into the funding of this market in the next few years, especially the remainder of 2019. 

Some municipalities aren’t big on short-term home-sharing

Some cities have imposed regulations and restrictions on businesses that offer short-term home-sharing services, as well as intermediaries that handle most of the industry’s service requests. A few cities that could soon impose restrictive legislation on this market in the United States include Nashville, San Antonio, Las Vegas, and New Orleans. 

The more often cities enact regulations, as well as how extensive they are, the tighter the prospects of the industry.

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