The COVID-19 pandemic has supercharged the market for short-term vacation rentals, and experts say demand is showing no signs of slowing down.
“This is going to be an epic summer,” says Matthew Roberts, CEO of the vacation rental management company Vacasa. He tells Yahoo Finance Live that reservations are at an all-time high as pandemic-weary travelers seek out vacation rentals with space, privacy and pools.
“We're up 213% March of 2021, over March of 2019, and we're also seeing really high rates, higher rates than 2019 and higher occupancy as well. So business is booming,” he said.
Record demand combined with low inventory means vacation rental landlords are commanding a premium and setting their own terms.
Experts say inventory is getting squeezed for a second consecutive year as more people who own second homes forgo air travel and opt to vacation at their getaway house instead.
At the same time, Roberts says the ability to now work and school remotely, has more people looking to rent vacation homes for longer. “I think we're trending right now about 13% higher lengths of stay than we did in 2019,” he said.
Strong demand is also sparking consolidation in the industry. Privately-held Vacasa recently bought its rival, Turnkey for an undisclosed amount. The acquisition gives Vacasa approximately 6,000 additional vacation rental properties throughout the U.S. and opens the company up to new markets including Los Angeles and Napa, Calif., Sante Fe, New Mexico, and North Carolina (Asheville, Black Mountain and Holden Beach).
“That's what we focus on, is adding supply and bringing that availability online for guests,” says Roberts. “But it is going to be crunched this summer across the board because there's so much pent-up demand for people to travel.”
Roberts says pandemic-driven demand has caused the market for vacation home rentals to leapfrog at least a few years in terms of growth. In 2020 more traditional hotel travelers, such as Baby Boomers, tried Airbnb and Vrbo for the first time and decided they liked it.
During Airbnb’s (ABNB) most recent earnings call, co-founder and CEO Brian Chesky told investors that he sees “a significant travel rebound” on the horizon.
It’s a similar story at Expedia (EXPE), where Vrbo is the lone bright spot in the travel company’s portfolio. Expedia's brands include Hotels.com, Orbitz, Travelocity, Hotwire, CheapTickets, CarRentals.com, and VacationRentals.com, among others.
"I would say it would probably be just about the only part of the company that's growing," Expedia CEO Peter Kern recently told Yahoo Finance Live.
According to Vacasa, the Florida Keys, Oregon Coast, Texas Hill Country and Martha’s Vineyard are all popular family destinations this year.
Roberts says he’s confident Vacasa can manage the spike in occupancy. “We're seeing occupancy rates up in the 90% already in a couple of geographies,” he said. “I think it's just exciting to see people back. You know, I think that they're excited to travel again.”
Alexis Christoforous is an anchor at Yahoo Finance. Follow her on Twitter @AlexisTVNews.