INVESTMENT
5REASONS INVESTORS SHOULD CONSIDER SHORT-TERM RENTALS
Contributed by BEN HARPER Group Managing Director , Watergate Bay Hotel , Beach Retreats and Another Place , Cornwall , England , and ANDREW EASTON , managing director , Beach Retreats , Devon , England
The popularity of the short-term rental market was sealed when Airbnb listed with a valuation of US $ 47 billion . The market is now maturing and becoming more nuanced and demand is surging for aspirational , self-catering products which deliver the lifestyle of a boutique hotel with the freedom of your own home . As the product transitions from traditional self-catering accommodation to an offering that blends lifestyle , quality and experience , the supply pool narrows , leaving high investor demand for those that can lean into the rising trend for authentic experiences and high-quality properties .
Leisure-driven outdoor offerings have attracted increased investment in the past 18 months , driving the largest deals in the hospitality sector , with the acquisition of seven Center Parcs Europe holiday parks by Aroundtown for close to € 1 billion , KKR buying Roompot for € 1 billion , InfraVia Capital Partners picking up Sandaya for an undisclosed fee and Vacasa ’ s purchase of TurnKey Vacation Rentals .
Historically , this segment has suffered from an unsophisticated and homespun reputation but as the above demonstrates , that is the past and now on to the future .
In this article , we consider five reasons investors should consider short-term rentals .
1 . RESILIENT SECTOR WITH POSITIVE GROWTH OUTLOOK Consumer demand for high-quality self-catering has been booming since before the pandemic and has strong long-term prospects as the guest ’ s desire for independence continues . The success of the urban serviced-apartment model provision for business travelers is translating into a leisure offering for a wide range of guests .
In the immediate short term , the ongoing uncertainty and restrictions around international travel are likely to mean travelers look to domestic accommodation options for security and reliability . There is also strong evidence to suggest that globally people remain more comfortable with drive-to and fly-to destinations .
Although the pandemic has bought short-term rentals into the spotlight , they were gathering investor interested long before COVID . In 2018 , Csongor Csukás , head of international property management at BNP Paribas Real Estate , announced an agreement with a professional homestay management company to offer a model for residential assets in Europe that mixed long- , medium- and short-term leases in a flexible way to optimize returns . “ We observe significant interest among major real estate investors in the residential sector , as well as fast-growing
44 hotelsmag . com July / August 2021