As a result of the pandemic, there is a growing demand for flexible living accommodation right now. This has been driven by a new wave of remote workers and nomadic travellers.
We have learned that we can ‘work from anywhere’ and as the Governor of the Bank of England said this week, we are unlikely to go back to working how we did before - a hybrid model combining home and office is now an option that many people, whether as singles, couples or families are now eager to embrace. Remote working as a trend is here to stay.
Innovative business models are emerging to enable larger, multi-unit owners and managers, as well as investors new to the industry, to break into the short-term rental sector and service this new short-term rental demand without much prior experience. Investors are pivoting away from longer lets and flexing their assets to great effect. Shifts such as outsourcing operations and channel marketing, as well as the adoption of tech, are also shaking up investor options in this
sector.
Here’s how investors can harness these investment opportunities and crack the short-let market:
1: Adopt innovative business models
The significant growth in remote working is driving demand for multi-unit properties that can switch between short-term and longer-term rentals. This convergence of asset types is a trend that is only set to grow as we emerge from the pandemic.
Innovative new business models, offering a move away from the master lease model, have appeared in response to this shift in accommodation demand. Platforms offering a turn-on/ turn-off approach to short-lets are allowing larger investors to enter the short-let market with rentals that flex within the same building.
Rather than the fixed return promises of a master lease model, new shared success model solutions with variable cost technology platforms enable the property owner to retain the majority of the revenue with just a percentage going to the channel manager. Such shared success models enable owners to focus on their core competencies whilst reducing fixed costs and minimising financial risk.
2: Outsource operations and services
Handing over the responsibility of operations and services enables owners and managers of short-term rental properties to operate more efficiently and cost-effectively. At Jetstream, we open up the short-term hospitality sector to investors by offering fully outsourced solutions, including channel marketing, distribution and guest communications on a shared success
model.
Investors don’t have to worry about all the operational cogs involved in short-term rentals. With outsourcing all components are taken care of: from bookings to guest screening, communicating with guests through all aspects of their journey, and ensuring the content and pricing is optimized for conversion across all the largest global short-term rental marketplaces. The upshot is that without having to invest any of their own time and resources, investors can use a platform like Jetstream to increase revenue opportunities.
3: Adopt tech-enabled solutions
All of the above could not happen without the tech. The use of operational technology is commonplace now in short lets as guests demand a contactless, seamless stay. Keyless entry and guest screening are all part of the full turn-key solution. Just as we’ve had to get on board with the tech revolution in life in general, so too do property investors if they want to succeed in this sector. In order to meet the guest expectations, streamline operations and reduce financial risk, owners and managers can take advantage of the innovative tech-enabled platforms to realize fully the potential incremental revenues available from short term and flex rentals make the short-let sector work to their advantage.
As the remote working trend plays out and we all work and live more flexibly, the short-let market will continue to adapt and attract new investors. If those investors get teched up and are similarly flexible in their approach to how they let their assets, then this is a profitable market in which to operate.
