Your short-term rental strategy must perfectly align with your target customers and market trends to make tangible profits. The most reliable way to do that is through vacation rental market analysis.
The vacation rental market is projected to reach $94.34 billion by the end of 2023 and achieve an annual growth rate of 3.37% by 2027. So, if you own rental properties, this may be the perfect opportunity to understand market data analysis in the rental accommodation sector.
Assessing vacation rental trends and market data will generate data-driven insights and help you identify the best possible opportunities. The rapid growth in the vacation rental sector has also made it very competitive. Market data analysis can detect gaps in the space and see what you can do differently to stand out.
However, the concept may seem intimidating if you’ve just started. Here’s a detailed guide on vacation rental market analysis in the retail sector.
What is Vacation Rental Market Analysis?
Vacation rental market analysis evaluates quantitative and qualitative data regarding the rental accommodation industry and identifies market trends.
How Can Market Data Analysis Help Airbnb Hosts and Rental Property Owners?
Giving your guests a memorable experience is one thing, but you must have some USP to beat the competition. Here’s how vacation rental market analysis can give your short-term rental business an edge:
Understand the Competition
Vacation rental market analysis helps improve the guest’s experience, price your services better, and provide valuable insights into the competition.
For example, landlords and property owners can analyze a specific area to understand how their properties are doing compared to their competitors.
Market data analysis through tools like PriceLabs can help you understand the supply and demand balance. It will also show you insights like the active listings and their occupancy percentage.
Gain Access To Real-Time Data
Short-term rental markets are dynamic due to various economic, social, and demographic factors. To grow, you need access to real-time insights and adapt quickly. That’s something market data analysis can help you with.
Real-time data can also help you:
- Determine the viability of investing in one city over another.
- Create customized discount packages for relevant rental market customers.
- Understand location-specific elements in the short-term rental market.
- Identify popular amenities and policies in a given market.
Identify Market Trends
Analyzing vacation rental market data also helps you gain insights into the prevailing trends in the rental accommodations sector.
For example, studying booking patterns might help you determine demand trends and change pricing accordingly.
As an Airbnb host, you can unlock the best and most competitive prices and strategies with our Airbnb pricing tool.
Here are some additional benefits of Airbnb market analysis:
- Assesses rates of similar properties in the area and lets hosts determine the optimal and competitive pricing strategy to attract tenants while maximizing their returns.
- Updates property owners on current industry trends, helping them adapt to changing marketing conditions
Predict Future Demand
Besides helping you adapt and create competitive pricing, vacation rental market analysis can also help you predict future demand in your industry.
You can anticipate changes in demand for rental properties in a specific area and make long-term investment decisions accordingly.
Identify High-Demand Areas
Vacation rental market analysis can also help landlords and property managers identify high-demand areas for rental properties. By analyzing vacancy rates and rental prices, they can see which neighborhoods or cities have a high demand for rental accommodation.
For example, you can use Pricelabs Market Dashboard to identify and understand the most competitive or demanded areas. All you need to do is create a dashboard and add the location you want to evaluate, along with various filters based on the kind of property you want to invest in. You can create multiple dashboards for different property types and amenities and see which one will suit you the most. If the data shows rental prices in a particular neighborhood have increased, you can determine where to invest and in what kind of property.
Improve Marketing Strategies
Market data analysis can also provide insights into rental properties’ most effective marketing strategies.
For example, suppose data shows properties with professional photos and detailed descriptions have a higher occupancy rate. In that case, landlords can invest in professional photography and improve their property profile to attract more tenants.
How to Understand Vacation Rental Market Analysis?
Here’s how you can make better sense of the retrieved data from vacation rental trends and market data analysis:
Define your objectives
Clearly define your goals and what you want to achieve from the analysis. Are you looking to determine rental prices, identify market trends, or assess competition? Understanding your objectives will help you focus on the relevant data and prioritize the most important parts.
Identify the key metrics.
Short-term rental market data typically includes metrics like:
- Rental prices
- Vacancy rates
- Average rental income in the area, etc.
Identify the specific metrics relevant to your objectives and measure them regularly to stay ahead of the curve.
For instance, you can use the Pricelabs market dashboard to simplify the process and track KPIs accurately. The platform lets you view the metrics for the last 365 days, 30 days, or 7 days.
Analysis Over Assumptions, Anyday
The vacation rental industry is competitive. Why make educated guesses when you can calculate the risks and potential earnings of any property worldwide? If you invest money in a vacation rental property, ensure you do it correctly.
Define your objectives, identify relevant KPIs, and choose the right tools. These steps will lead to better customer understanding, risk assessment, and competitor benchmarking, getting you the best possible returns.
Looking for a feature-rich tool for vacation rental market analysis?
PriceLab’s Market Dashboard lets you analyze relevant data to maximize the benefits of your investment property.
PriceLabs is a revenue management solution for the short-term rental and hospitality industry, founded in 2014 and headquartered in Chicago, IL. Our platform helps individual hosts and hospitality professionals optimize their pricing and revenue management, adapting to changing market trends and occupancy levels.
With dynamic pricing, automation rules, and customizations, we manage pricing and minimum-stay restrictions for any portfolio size, with prices automatically uploaded to preferred channels.
Every day, we price over 275,000+ listings globally across 125+ countries, offering world-class tools like the Base Price Help and Minimum Stay Recommendation Engine. Choose PriceLabs to increase revenue and streamline pricing and revenue management. Sign up for a free trial at pricelabs.co today.