By 2020, Vacation Rentals Will Topple The Hotel Industry – VRMB
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By 2020, Vacation Rentals Will Topple The Hotel Industry

Whether you've heard of VRBO, stayed at an Airbnb, or rented a home through HomeAway, you are likely familiar with the idea: nowadays, empty properties can be transformed into mini hotels with minimal effort and massive reward.

Independently, these vacation rental brands have seen incredible growth over the past twenty years. And collectively, they represent an innovative new lifestyle that blurs the line between business and pleasure.

While travelers were initially hesitant to try vacation rentals and hosts were initially hesitant to let random strangers stay in their personal space, a movement has been begun and we're not talking about a fad here: vacation rentals are as close to bulletproof as a travel trend gets.

Vacation rentals represent a product that people love and and solution that people need. While some municipalities may try to suppress this organic movement, they will ultimately fail to the dynamics of a free market. And by the year 2020, we will reach the tipping point.

But not everyone is taking vacation rentals seriously just yet...

In an article last year by Skift[1. Airbnb's Growth Doesn't Scare Priceline At All, Skift, July 1, 2015], "Officials at the Priceline Group and Expedia Inc. haven’t felt compelled to jump into peer-to-peer apartment rentals despite the phenomenal growth over the last few years."

That same year, the CEO of Hilton said[2.Hilton: We're Not Scared Of Airbnb: CNN Money, October 15, 2015] he believed it was "relatively impossible" for peer-to-peer lodging to pose a major threat.

Why Is This Mindset Naive?

Whenever I read those statements along with a number of similar sentiments from hotel industry professionals, I think they are naive because all the numbers point in the opposite direction...

According to CBRE[3. Report from CBRE Hotels (formerly PKF Hospitality), Travel Weekly, February 7, 2016], "Airbnb accommodations now account for 9% of the total lodging units in the 10 largest U.S. markets and appear to be adding units at a substantially faster clip than the U.S. hotel industry."

The average number of Airbnb units is said to be doubling year upon year, whereas hotel supply increased by only 1.1%. And remember: Airbnb only accounts for a segment of all vacation rental properties. In fact, up until about a year ago, Airbnb hadn't even really entered the vacation rental market.

Bloomberg reinforced that none of this is a good sign for the hotel industry[4. More And More People Who Use Airbnb Don't Want To Go Back To Hotels: Bloomberg Report, February 16, 2016] in revealing, "If people have stayed in peer-to-peer lodging [P2P] in the last five years, the likelihood that they prefer traditional hotels is halved (79 percent vs. 40 percent)," Goldman Sachs data showed. "We find it interesting that people 'do a 180' in their preferences once they use P2P lodging. They move directly from preferring traditional hotels to preferring P2P accommodations."

An internal study by Seattle Oasis Vacation Rentals[5. 2016 Seattle Traveler Survey by Seattle Oasis Vacation Rentals & Nerdbot LLC, May 25, 2016] revealed that 52% of visitors "would NOT have even come to Seattle if vacation rentals were not an option." These represent trends that are beginning to impact the world's greatest destinations. 

As if these trends weren't incredible in their own right, realize that the vacation rental industry is brand new! According to Consumerist[6. The 9 Things We Learned About How Americans Are Taking Part In The Shared Economy,, May 19, 2016] Only 11% of people have used shared lodging platforms] only 11% of people have used Airbnb, VRBO, or similar, and almost half don’t know they exist. Meaning, the vacation rental industry is really truly just getting started.

How Fast Can Vacation Rentals Topple The Hotel Industry?

Vacation rentals will topple the hotel industry. It's only a matter of time.

But to determine the moment of critical mass, look at how fast the VR industry can close the delivery gap (the difference between what travelers collectively want versus what hosts collectively actually deliver). Closing this gap is synonymous with reaching our fullest potential. So what determines how fast it is done?

1. Frameworks

Innovation, as we learned in this live workshop, is necessary for an emerging niche to prosper. And when it comes to our niche, the innovators that will determine our success are the ones who get to the market first, continually improve, and most importantly, are constantly looking to change the terms of the playing field.

Because the vast majority of these individuals got into the VR business accidentally, the development of quality frameworks are not just helpful to facilitate growth: they are directly correlated with our collective wellbeing.

"VR frameworks don't just facilitate growth: they're directly correlated with our collective well being"

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VRMB's own "Listing Site Independence" framework is a tremendous start: but the industry needs more, specifically in the areas of regulation and operations.

2. Prototypes

Like in any new field, cultivating prototypes or individuals who have built their vacation rental business sustainably is key to perfecting the aforementioned frameworks. Once we have irrefutable frameworks and prototypes, we can clone and scale. But until we have these archetypes there is no blueprint for newcomers to follow.

Remembering that few vacation rental professionals were formally trained for their jobs, an industry without prototypical leaders is also an industry ridden with anxiety and fear. Anxiety that the job at hand is far greater than one's skill level. Fear that one's historical results could all come tumbling down.

3. Connectivity

Another factor that could throttle the vacation rental industry's success is our fragmentation. We are independent owners and managers selling unique products on our own terms, so themes of standardization and regulation tend to make us freak.

However, until we fully unite and form a singular voice, travelers will never know precisely what to expect, scammers will be continue to wreak havoc, and one bad apple will ruin more entire bunches. This connectivity is more than just tools and services being invented: it's an attitude of adopting and adapting with the flow.

"VR connectivity is more than tools & services: it's an attitude of adopting and adapting with the flow"

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When it comes to connectivity, it's equally as important for big VR brands to step up and defend vacation rentals as it is for every single independent owner and manager to be willing to do their part: to work as a team, be positive, and become master problem solvers.

  • Note: Victimization and entitlement are the two greatest psychological obstacles to overcome. Forget blaming others for your challenges. Stop thinking anyone owes you anything. Become a protagonist and ask, "if we don't solve this problem, who will?"


Considering the statistics featured here, it's just not feasible for hotels to maintain their historic stronghold on the market. And by the year 2020, I believe the vacation rental industry's momentum will reach a threshold that permanently redefines hospitality as we know it.

If you like business opportunities, think about getting involved in vacation rentals today: take advantage of the expansion part of the lifecycle[7. Next 5 Years Will Be Fun, David Angotti, May 25, 2016] and become a pioneer with the right expectations and a great mindset.

If you are in the hotel industry, do not wait one more day: begin diversifying your investment now because if you put it off, it will be too late.


About the Author Matt Landau

Matt Landau is the Founder of the VRMB and the Inner Circle, two online resources dedicated to helping vacation rental owners and managers generate more bookings.


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