What the cost of living crisis means for the holiday rental market

Holiday rental bookings are up, but the rebound after the pandemic may have resulted in a time lag between the onset of the cost-of-living crisis and how people are travelling. From the uncertainty caused by the pandemic, brought about by travel bans and quarantine rules, to questions now surrounding consumer spending habits during a cost-of-living crisis, the past few years have brought about considerable ups and downs for the holiday rental market. Are there better days ahead? Holiday rentals are in demand for summer 2023 Cost-of-living crisis aside, we saw holiday rental bookings increase in the latter part of 2022 and have continued to soar in 2023. Even on the more high-end of the spectrum, where demand for luxury properties spiked significantly post-pandemic and inevitably dropped back as we’ve returned to normal, consumers have built up their savings and while looking to spend more wisely on certain things, they are also indulging in certain areas. But while we remain quietly optimistic that this upward booking trend will continue, that isn’t to say a time lag between the impact of the cost-of-living crisis and consumer travel isn’t off the cards. Why are holiday rentals becoming an increasingly popular choice for travellers during the cost-of-living crisis? Consumers are choosing holiday rentals this summer as they know the option to be the best budget solution. They love the space and privacy a full property provides, and even now, we’re seeing that our guests are willing to invest in higher budget, quality properties to capitalise on the amenities that a villa or an apartment can offer, such as outdoor areas, barbecues and private pools. They perceive that they will spend more time relaxing within a beautiful property, and so can manage their budget better compared with stays in other forms of accommodation. Also, consumers want to be reassured by an increasingly standardised and professional experience when they book holiday accommodation. They have already familiarised themselves with holiday rentals, and particularly when lockdown restrictions eased and hygiene standards were paramount, expectations were high. Now is no different. How is the cost-of-living crisis impacting summer travel plans in 2023? As expected with the cost-of-living crisis, staycations are back on the agenda for summer 2023, with domestic travel continuing to do well. UK guests are opting for rural locations, with Yorkshire and Pembrokeshire being popular destinations, as travellers seek sustainable and nature-based experiences. However, Mediterranean destinations still dominate international travel plans, accounting for almost half of our holiday rental bookings. Greece, Italy, and Malta are leading the way, all ranking far higher compared to summer 2022. Other top international destinations for 2023 include Spain and Portugal. Overall, family-oriented properties stand out as the accommodation most in-demand, with travellers typically favouring 2-bedroom properties for city breaks and 3–4-bedroom villas for countryside and leisure breaks. Outdoor areas and pools continue to be highly sought-after holiday rental amenities. What does this all mean for property managers? When I started out in the financial crash of 2008, I saw how a difficult financial environment inspired property owners to maximise their income from their assets. Today’s commercial environment is no different, and property owners know that if they can provide a high-quality product, they are more likely to attract a higher return on their investment. This means it’s incredibly important for property owners to follow quality standards and prioritise a service approach. That means not just handing over the keys, but really investing in elevating the stay experience. That’s why Travelstaytion is putting a huge amount of effort and resources into supporting property owners where they need it most: providing the technology that empowers them to deliver the quality standards that guests increasingly expect. Byline: Jason Anastasinis CEO of Travelstaytion

What the cost of living crisis means for the holiday rental market

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