What Property Managers Should Expect From 2023 Travel Trends?
If you own rental properties, you need to know what to expect from 2023 travel trends. The recovery from the financial crisis has been a boon for rural vacation spots, but the trend is expected to reverse in the second half of this year. Until then, however, the urban rental market is poised to begin a comeback. Top urban destinations include Sarasota, Florida for winter rentals, and Palm Springs, California for music festivals.
Traveling not sacrificed despite inflation
More than 40% of those surveyed in the poll indicated inflation wouldn’t have an impact on their intentions to travel during the next six months. As a result, many people will keep on their travels for the next several months.
Short-term rentals are expected to outperform hotels in 2023
Short term rental demand is set to continue growing. According to AirDNA’s latest forecast, demand for short-term rentals and the Short term rental software in the U.S. will grow at a rate of 20.3 percent year over year through 2023. Although new supply is expected to remain stagnant as a result of high interest rates and the high cost of purchasing homes, the industry is still seeing healthy growth. This growth is also being driven by domestic demand.
Hotel rates will rise across the board in 2023
According to a recent report from American Express Global Business Travel, hotel rates will rise globally in 2023. The pace will vary depending on the city and the region, but increases will be significant. Demand for rooms and the ongoing shortage of labour and skilled workers will drive prices up. The report says some cities will experience even higher rates.
However, there are a few key obstacles facing the industry. First and foremost is labour availability. Approximately half of the hospitality industry has reported that they are facing a labour shortage, while only a third predicts a drop in demand. The shortages are already being felt across the industry, as people continue to leave the industry to work in other sectors.
Leisure travel is expected to outpace business travel
While the economy recovered from its lows in 2020 and is increasing 5.8% in 2021, the global economy is expected to slow down in the coming years as global economic growth slows and COVID guidelines are put into effect. A major concern is the possibility of another recession, which would further hamper the travel industry. By 2022, the global economy is expected to increase by 3%, while in 2023, it is projected to grow by only 2.8%. Geopolitical uncertainty, particularly in Europe, is also a factor, as well as the invasion of Russia in Ukraine. Also, inflationary pressures are pushing costs higher, and a potential outbreak of COVID could limit business travel to certain areas.
Although the number of business travellers is set to grow, this growth is slowing down. The global workforce is rapidly changing. The Millennial generation is taking over the workplace, and it is expected that by 2021, they will account for 40% of the workforce. Meanwhile, the global business travel industry is expected to reach $1.4 trillion by 2024. It is expected to begin recovering from the pandemic in the succeeding years.
Airbnb rentals are a hybrid rental strategy
For property managers who are considering launching an Airbnb rental program, it is important to select locations where Airbnb rental demand is high. However, Airbnb rentals have a downside. They can reduce the number of long-term rental units in an area, which may be detrimental to low-income property owners. Instead, property managers should consider an alternative tax strategy that will reduce this negative side effect and help keep the rental market growing.