The travel industry is growing and changing fast. An increased desire by consumers to prioritize new experiences over material things combined with the emergence of disruptive technologies has made hospitality one of the most exciting sectors in the new economy. While these changes are happening around the world, there are also travel trends at the local level that are relevant for short term rental managers and individual hosts.
One of the best sources for understanding local travel trends in Miami is the Visitor Industry Overview published by the Greater Miami Convention & Visitors Bureau. The report presents insight backed by real data on how the travel industry in Miami has been evolving over the last few years. Whether you are a vacation rental manager or individual host in Miami, it’s important to keep up to date with what’s happening in the travel market so you can position yourself for success.
Below we’ve summarized the key takeaways from the 2016 version of the report as well as their implications for short term rental operators in Miami.
Peak Season Rising
After a massive 6.4 percent increase in overnight visitors from 2014 to 2015, year over year growth in overnight visitors came back to modest levels in 2016 at a 1.4% increase. However, the peak season months of January to March each still managed to achieve at least 4.8% in overnight visitor growth. The consistently strong growth in peak season demand means short term rental hosts shouldn’t be afraid to increase prices more than usual during this period as more North American and International travelers flock cold weather in favour of South Florida’s near perfect temperatures during this time. With year over year overnight demand increasing and more travelers booking trips on shorter notice, we’ve noticed short term rental hosts can often get away with being slightly overaggressive with peak season pricing and dynamically adjusting rates downwards as the booking window shortens to minimize vacancy.
More the Merrier
One of the most interesting statistics in the report relates to the increasing average travel party size. Between 2012 and 2016, the average travel party size in Miami went up from 1.92 people to 2.28 people, representing an almost 20 percent increase. As more families and groups head to Miami the demand for short term rentals that can accommodate three or more people will increase. The implication for profit maximizing hosts is that they will have to ask themselves what is the most number of people their homes or apartments can reasonably accommodate. If you have a one bedroom apartment, we recommend investing in a high quality sofa bed for the living room. Be sure to include good pictures of the sofa bed made as a bed so prospective travelers can imagine themselves using it. If you have a two bedroom or three bedroom apartment, perhaps you can fit two single beds in one of the rooms that can be combined to make a queen, or even two double beds if you have enough room. We’ve found the most successful listings are able to accommodate a wide variety of travelers profiles, so be sure to think strategically during the set up phase to optimize earnings over the long term.
An International Market
Miami being an attractive destination for international travelers is nothing new. What is interesting though is the difference between how internationals travel relative to domestic visitors. In 2016, there was approximately 8.1 million domestic overnight visitors and 7.6 million international overnight visitors to Miami, which makes the absolute number of U.S. based vs global travelers relatively equal. However when we look at lodging preferences among these travelers, a different picture emerges. In the same year, 5.7 percent of internationals rented a homestyle accommodation compared to 1.5 percent of domestics, a difference of almost 4 times. In 2014 and 2015, the percentage of international travelers staying at a homestyle accommodation remained constant at 3.8 percent. That means that while the year over year growth of homestyle rentals by internationals as a percentage remained the same in 2015, it went up by 50% (from 3.8 percent to 5.7 percent) in 2016. That represented an increase of about 150,000 international travelers choosing residential accommodations. Not insignificant at all as we estimate the total size of the entire home active short term rental pool in Miami and Miami Beach to be somewhere in the 6500-8000 range.
So what are some little things you can do to give your listing(s) the best shot at catching the international wave? For one, going beyond Airbnb and using platforms such as Booking.com and Hotels.com can give your property exposure to a much bigger global audience. Many international visitors to Miami come from Latin America, so having some Spanish writing on your main English listing can increase the appeal to those travellers. On platforms like Airbnb that allow you to write listings in multiple languages, we recommend including translations for Spanish, Portuguese, German, Italian, and French. Obviously most of us don’t speak all of these languages, but using Google translate or investing a little in an Upwork written translation specialist can add a lot of value. Finally, make it clear on your listing and profile on vacation rental platforms (Airbnb, VRBO, etc) that you love hosting people from around the world. If you’ve travelled a lot, mention that you’ve been around the world and want to provide as good a standard of hospitality as can be found anywhere. It may not seem like it would make a big difference, but the more relatable your listings are to guests the more reservations you will get.
Parking a Commodity
With the rise of peer to peer marketplaces like Uber and Lyft, it would seem as though less people will be using a rental car while in Miami. Despite this trend, 40 percent of visitors rented a car on their trip to Miami in 2016. International visitors, who we established were almost four times likely to rent a homestyle accommodation than domestic travellers, were also 7 percent more likely to rent a car. On the supply side of things, a filtered search for Airbnb listings with free parking in Miami makes it evident that there is a shortage of these types of accommodations. Based on anecdotal data, we estimate that about 20%-50% of short term rentals in Miami provide free parking depending on the neighborhood. Our experience has taught us that properties with parking tend to be in higher demand and command greater rates. They also provide a better experience for guests as a free parking spot is generally convenient and hassle free. So how can you take advantage of this if you don’t have parking? The short answer is to rent a spot from someone or get a monthly pass from the closest secure parking lot. Depending on your neighborhood, it’s possible that the investment will pay for itself two to three times (or more) over. Be sure to note in the first 40 characters of your Airbnb / VRBO listing that parking is included (i.e. ….+ Parking). You’d be surprised how few people do this and the impact it can have on your listing views and conversion rate.
For many travellers Miami is a place they vacation every year as the snow starts to come down in their home city. A survey of travellers in 2016 revealed that more than 90% were very or definitely likely to return. While we don’t have any comparable data for other cities, we can confidently say that Miami is probably one of the biggest repeat travel destinations in the world. As a vacation rental host, the question then becomes how can you take advantage of this situation? The simple approach is to focus on incentivizing those high margin, good guest profiles to come back every year. Identify guests that book in advance at high rates and for longer stays (5 + days) and ensure you provide just a little extra service to them and willingness to accommodate special requests. At the end of their stay, let them know they are welcome back anytime and provide an email address they can contact you for a special rate if they want to come back. What’s great is any special rate you provide them can just be a discount equal to the commission the marketing platform you used the first time took. In addition to vacationers, focus on business travelers who regularly come back to the city. Top short term rental hosts are able to get occupancy on the slowest days of the low season just by having corporate guests who appreciate their consistent experience come back regularly.
Miami is an exciting place to be a short term rental host. Whether you are just on Airbnb or have a full scale vacation rental operation, there’s lots of opportunity out there for those who are willing to take advantage. If you have any questions or are looking for management don’t hesitate to reach out and we’ll be happy to chat.