In our recent article, Stepping up to the New STR Landscape, we covered some of the trends and protocols that defined the vacation rental industry in 2020 and are set to continue into 2021.
Whilst many owners and managers around the globe saw a sharp downturn in bookings due to the Covid-19 pandemic, some destinations flourished after lockdown restrictions were lifted, paving the way for new short-term rental investment opportunities.
And it is this little ray of light that we want to focus on for our final look back at 2020.
Vacation rental data business and Syncbnb partners, AirDNA has been monitoring the ups and downs of Airbnb data through 2020 and has some enlightening insights to offer.
The data for global bookings shows that people didn’t necessarily stop travelling. Many simply adapted how and where they travelled, and these trends look set to continue through 2021 and beyond.
The main takeaways from last year’s data indicate:
- A shift away from urban markets
- Rural locations benefited
- Last-minute bookings increased
- Longer stays were booked
Big city exodus
As soon as lockdown restrictions were lifted, city dwellers across the globe looked to escape from the city. They became known in the hospitality industry, as Cityscapers, and played a hugely positive role in pushing up occupancy rates in rural destinations.
As governments advised against long-distance travel and the majority of flights were grounded, domestic travellers and workationers jumped in the car and headed out of town; choosing ‘drive-to’ rural destinations over urban locations for a well-needed break from the confines of the city.
AirDNA’s data shows that domestic tourism accounted for a huge surge of 127% in global vacation bookings as soon as lockdown restrictions were lifted in May 2020.
The year of the rural escape
Their data for Europe tells us that travellers broke tradition from beach and city breaks, to seek out off-the-beaten-track destinations where they hoped to avoid crowds.
The data sample looked at destinations that had seen a significant year-on-year increase. Nearly all of them were not typical bucket and spade resorts, although water featured highly in the Top 10 list.
So what were people looking for when they booked accommodation through 2020?
- Lakeside destinations won over the beach
- Rugged coastlines
- Nature reserves
- Mountain retreats
- Market towns and villages within a short distance from a main city
- Small towns set on the banks of a river
Where guests booked in 2020
The study titled, Top Markets for Hidden Holiday Lets in 2021, gives a comprehensive insight into trending and emerging Airbnb hotspots. Highly interesting for those looking to invest in short-term rental accommodation in 2021: a subject we will be covering in our next article.
The results are based on three criteria:
- Rental demand: combining annual occupancy and booked listing growth rates to determine how often rentals were booked throughout 2020.
- Revenue growth: the company calculated changes in Revenue Per Available Rental (RevPAR) to determine which properties and destinations earned more in one month than the previous year.
- Reservations: Statistics were based on the number of bookings made in November 2019 compared to November 2020 and then calculating the year-on-year percentage change.
Let’s take a look at the destinations that saw the biggest annual increase in new bookings between November 2019 and November 2020:
1: Sortavala, Russia (+189%): A small town set on the shores of Lake Ladoga in Karelia at the Russian/Finnish Frontier.
2: Lakhdenpokhskiy, Russia (+180%): Sharing the southwest limits of Lake Ladoga with number one destination Sortavala. Demonstrating the demand from Russian urbanites to escape to a rural waterfront destination.
3: District de la Broye-Vully, Switzerland (+178%): 50 kilometres from Switzerland’s capital city, Bern and set on the banks of Lake Neuchâtel. Demonstrating that lakeside towns are highly sought-after and therefore an interesting investment option for 2021.
4: Montrichard, France (+189%): A market town set along the banks of the river Chard in the Loire region. Making it an ideal location to explore the Loire Valley and enjoy French village charm.
5: Bronckhorst, Nederlands (+142%): Known as the smallest town in the Netherlands, Bronckhorst is a rural market town in the Achterhoek region.
6: North Lanarkshire, United Kingdom (+142%): Just a short distance from the cities of Glasgow and Edinburgh, North Lanarkshire was the preferred escape destination for Scottish city dwellers.
7: Middlesbrough, United Kingdom (135%): At the heart of the Tees Valley, centrally located between Yorkshire and Country Durham. The combination of good transportation links, beach and estuary, and national park scenery, became a draw for British domestic travellers this year.
8: Polperro, United Kingdom (+130%): Definitely not an emerging destination, Polperro has been a hotspot on the Cornish coast for years. But the small coastal village demonstrates the need for fresh air, rugged coastline and a natural environment.
9: Sallanches, France (124%): Set on the river banks of the Sallanche river close to Monte-Blanc in the French Alps. The small town is an ideal destination for outdoor activities and enjoying the mountain scenery.
10: Sens, France 113%: For French domestic travellers who still craved a culture break during 2020, Sens became the hotspot. A small town with an incredible history, just a hundred miles south-east of Paris.
Definitely, not your typical Top List of Vacation Destinations and, interestingly, the top three destinations year-on-year were lakeside destinations.
The latest in accommodation
Not only did guests change where they travelled to, but their preferences of ‘type of accommodation’ also changed during 2020.
The report from Airdna shows that more people chose ‘unique stay’ accommodation over traditional vacation rental homes.
Farm stays, yurts, tiny homes and treehouses led the growth sector during 2020. Which is logical from the point of view that travel saw a shift away from urban and coastal destinations to rural retreats.
Homes/villas were the most popular traditional accommodation type, as travellers chose space and flexibility over compact and practical. Hosts who own or manage spacious, single-family units, saw the best recovery.
Bed and breakfast accommodation followed, perhaps we were all just fed up of making our own breakfasts after three months of quarantine! Apartments/condos tailed behind which is also logical, based on the shift away from city destinations.
What these statistics show, as the travel market starts to reset and readjust, is that investing in a unique destination allows you to ‘’shine’’ within a niche market.
You can focus on attracting guests who respect the environment and the experience offered, rather than competing on price within the mass tourism sector.