As accommodation bookings take a hit due to the COVID-19 outbreak, many providers in the short-term rental industry are pivoting their models to focus on longer-term stays.
Airbnb promoted its shift to extended stays earlier this month and last week announced that it will have more than one million listings that offer monthly stays.
The home-share giant says it has seen an uptick in long-term stays since 2019 - when one in every seven nights booked was for a longer-term stay and the number of available long-tern stay listings grew 30% - but the COVID-19 crisis is contributing to the current surge.
Travelers are searching for and booking stays for longer durations of time, typically within their own communities, as they seek safety or peace of mind.
Property owners and managers also need to fill inventory, and some have moved faster than others to capitalize on what travelers want now compared to planning for peak rental season.
According to Alex Allison, founder and CEO of short-term rental brand D.Alexander, he started hearing from its community in early March about the need for homes to live and work in safely to ride out the current crisis.
“They were seeking guidance and certainty in uncertain times,” Allison says, noting that it received an influx in inquiries after a major travel website it advertises on issued a new cancellation policy, “sending travelers into panic.”
In response, Allison says the team has been “iterating and innovating ever since,” and on April 10 it launched a new model that eliminates short-term stays and focuses exclusively on mid- to long-term stays.
“We made radical changes to overcome uncertainty, the need for flexibility, optionality and a clean, comfortable home to work and live in for long durations of time.”
Allison says prior to COVID-19, D.Alexander, which owns and operates destination homes in Florida, Tennessee and Arizona, would be entering peak rental season at more than 90% occupancy.
We want to make the process of isolating as simple and easy as possible.
Alex Allison - D.Alexander
By mid-March, it was seeing an average of 27% extended stays, “which is high for industry standards,” and an increase in last-minute booking requests, which usually average around 115 days booking lead time.
In addition to extended stays, D.Alexander offers flexible travel dates as well as flexible cancellations and credit stays. “We want to make the process of isolating as simple and easy as possible, without any stress as it relates to length of stay,” Allison says.
While D.Alexander took community feedback as well as its internal data to reconfigure its model as quickly as possible, Michael Robison, co-founder and COO of Stay Share, says he’s seen a mix of responses from the property management platform’s partners.
Although he’s observed an uptick in extended stays in beach, lake and mountain towns within driving distances for travelers, other property owners have simply chosen to take their properties off the market.
“I think it's probably one extreme or the other: I'm not going to rent it out at all, or I'm going to rent it out to someone who is going to be here through the duration [of the coronavirus].”
He adds that a number of Stay Share’s partners are real estate companies that do short-term rentals on the side, "so they're seeing some kind of hybrid between their short-term and long-term rentals where it's almost like the corporate housing mentality."
Other clients, Robison says, failed to latch onto the long-term trend fast enough, "and now they're sitting with [hundreds] of empty units that have been empty for over 30 days.”
"For people who didn't jump on the trend early enough, it's going to be very rare for them to have somebody, especially at this point, say, 'Hey, can I take a 30- or 60-day rental on this unit?'" he says.
"Anyone who didn't jump on the trend early enough is handicapped in that sense, specifically those ... assuming that in a couple weeks [the crisis] would let up.”
Meanwhile, for Satoru Steve Naito, co-founder and CEO of Anyplace, the monthly rental marketplace was already in a position to capitalize on long-term stays.
Naito says the company, which works with extended-stay hotels, serviced apartments and co-living spaces in 66 cities across 22 countries, saw inquiries from potential property partners increase more than 50% since COVID-19 took its toll on the accommodations market.
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He says those interested properties, including larger hotel chains, were left with a surplus of empty rooms available and are turning to Anyplace to help them fill inventory in the 30-day-plus range.
Compared to online travel agencies and platforms like Airbnb, which Naito says “are not optimized to accept long-term guests,” Anyplace is designed for long-term guests and the company checks credit scores, criminal reports and eviction reports before guests can rent a space.
“The huge difference between Airbnb and Anyplace is the nature of the business: Airbnb is optimized for C2C and short-term stays; we at Anyplace are optimized for B2C and long-term stays,” he says.
“I feel for them [Airbnb]. They have to fill inventory no matter what, so that’s why they pivoted to the extended-stay area.”
Although many of Anyplace’s properties are currently filled with students displaced from college dorms as well as medical workers, Naito says he expects the long-term market to thrive after COVID-19 passes due to how people will rethink how they live and work.
“Remote work will become normal. Many people will start working from different locations for a month or two,” he says. “People’s behavior and work style will change. This is a huge opportunity for us.”
Torn over travel
Promoting long-term stays begs the question if people should be encouraged to travel at all, particularly as many governments around the world have issued stay-at-home orders.
“We’re concerned about households in need and those that don’t have an effective home to isolate in,” says Allison. “We’re providing guidance and help to those in need, rather than encouraging people to travel.”
He says D.Alexander’s messaging to customers has been to drive, not fly, and it ensures its properties have the service, amenities and “stimulation” - including game rooms, yoga studios, pools and more - guests desire to reduce the urge to go outside. “It’s needed, and it’s the right thing to do.”
Robison says Stay Share has been encouraging its clients to block their calendars and not accept new bookings accordingly with government restrictions, but ultimately, people will still be looking for places to stay.
“The question is how much do people believe in the enforcement of these things [like stay-at-home orders] and how much are they willing to just give it a shot?
“I think what we will probably see is if this goes much more than another 30 days, people are going to say the hell with it and they're going to go.”