Photo by Roberto Nickson

Originally Posted On: Florida Rental By Owners | Florida Rental By Owners

The year 2020 was probably the most volatile and transformative of the vacation rental industry to date. Florida was no different to the rest of the world in facing severe challenges. The COVID-19 pandemic hit in February 2020 and put a stop to travel as we knew it forcing vacation rental owners to pivot and take stock of their business while morphing with the realities of this brave new world.

The first wave made way for new types of vacation rental and short-term travelers that we’ll explore below. Hosting first responders became more of a priority then hosts switched to longer-term stays to stay afloat. Summer made way for a more domestic travel season for families seeking solace in safer self-isolating, self-catering properties. Making vacation rentals the accommodation choice of the year over typical hotel and resort options with no signs of change.

This report showcases how the industry in Florida evolved with the challenges we faced together. The effects of the pandemic for the Florida short-term rental industry goes beyond annual financials and transformed the way we do business as stakeholders. Unique to 2020, it was the first time thousands of property managers and property owners worked alongside government officials to educate and safely operate vacation rentals during a pandemic.

Let’s dig into our Florida Rental By Owners 2020 statistics starting with the website traffic growth. The key performance indicators in relation to traffic goals were exceeded in 2020. FLARBO continues to be a leader in the Florida, U.S.A. vacation rental industry in attracting and converting travelers into booked guests for subscribers. Based on customer experience surveys, subscribers are attaining their goals with the Florida Rental By Owners advertising marketplace. Website traffic hit just shy of 1,300,000 million visits and over 5,740,000 page views.

The average age of the website visitor searching for vacation rentals was 45 to 65+ years. This group shows a higher disposable income for travel and bookings. Statistically, the ratio of male to female website users was predominantly female at 64% versus male at 36%. This parallels industry findings that women are the vacation planners and coordinators within household groups.

There were many popular search locations in demand by vacation rental travelers seeking a Florida escape in 2020. The search locations for vacation rentals were predominantly coastal regions throughout the state of Florida. This aligns with the state of the pandemic throughout the United States where domestic travelers were seeking care-free, wide-open spaces that are off the beaten track. High on the list are coastal isolation locales like Fort Myers, Sarasota, Clearwater Beach, Anna Maria Island, Fort Walton Beach, Indian Rocks, Marco Island, Panama City Beach, Destin, and the Florida Keys areas. Also high on the list for traveler search to coastal areas were Naples, Pensacola, and Saint Augustine. The Disney Area was highly searched at the beginning of the year prior to the pandemic and later in the year as theme parks started to open up.

Florida Rental By Owners specializes in targeting specific travelers in search of popular vacation types such as Snowbird monthly and seasonal stays, pet-friendly rentals, boat-friendly vacation rentals with docks, beachfront, large group, and budget-friendly options. With the challenges faced in the year 2020 it was interesting to see the monthly and seasonal vacation type search explode with new client avatars like digital family nomads looking for a vacation rental to work from home as well as web learning online while staying in a tropical Florida location. This monthly stay category accounted for a 40.9% search type followed by pet friendly coming in at a 32% search rate which makes sense as furry family members were not left behind on these longer stay types. Interestingly many Florida travelers searching for a vacation rental on Florida Rental By Owners required a dock for boating, fishing and kayaking to achieve their vacation goals. Beachfront, large groups, golf resorts, and budget-friendly vacation types ranged within 3 – 4.2% of the searches carried out on FLARBO in the year 2020.

Due to the strong focus on specific traveler types and avatars as well as continued development of Search Engine Optimization (SEO), advertising and marketing strategies the inquiry growth has been steadily increasing since initial launch in May 2017. In year 2020, Florida Rental By Owners inquiries and booking requests increased 56% over the previous year. This is an incredible accomplishment given the vacation rental ban that restricted short-term rentals from March towards the end of May 2020. Strategic partnerships with third-party aggregators in 2020 also contributed to increased inquiry growth. More initiatives are planned for 2021.

It’s clear to see that during the year 2020 vacation rentals have become the accommodation choice for Florida visitors. Especially given the alternative plans many have had to make with international travel and cruise cancellations.

Florida Rental By Owners has steadily increased the property management software integrations through channel manager partnerships. The initial partnership with industry giant NextPax provided a streamlined automated and enhanced experience for property manager subscribers. API Integration provides flexibility for professional managers who need communication between software to automate listing details, availability calendars, dynamic pricing, record guest contact details, automate messaging, as well as answer booking requests and inquiries. Property managers have found implementing a Book Direct strategy into their business model substantially increases their profit margins. FLARBO currently offers over 20 property management software integrations through NextPax’s channel integration. More integrations are planned for 2021.

Booking commissions are on the rise in 2020 – 2021 across multiple platforms giving both owners and property managers pause. The following commissions are charged per booking on the larger online travel agencies, many have increased or moved from the traveler fees towards the host to pay commissions:

• Booking.com 15% commission fee – plus 3% credit card processing fees
• Airbnb was 3% and is moving to 14% commission fee – plus 3% credit card processing fees
• VRBO 5% commission fee – plus 3% credit card processing fees
• TripAdvisor 3% commission fee – plus 3% credit card processing fees
• Florida Rental By Owners 0% commission fee

Most short term rental hosts use a combination of platforms to fill their occupancy. For the case study examples we explore below we’ll use an industry average of 10% commission fee to calculate how much commission fees are impacting the bottom line.

Probably the most interesting trend from 2020 is the Book Direct strategies that professional vacation rental owners and managers are adopting. Florida Rental By Owners is proud to provide a book direct solution to vacation rental industry stakeholders. FLARBO’s business model drives all booking requests and inquiries directly to the owner/manager allowing them to process their own reservations within their own property management systems or payment processors. A Book Direct strategy saves on average 10% of the reservation amount in commission fees across platforms.

Property Manager Example:

The image below on the left shows the gross rental profit of a property manager with no Book Direct strategy. The example on the right shows the same property manager with 50% of their bookings originating from a Book Direct strategy.

Florida Property Manager with 100 properties annually grossing $88,400 per property ($2,000 per week – 85% occupancy)

No Book Direct Strategy

• This manager grosses $8,800,000 in rent.
• Utilizing only online travel agencies commission fees averaging 10% equals $880,000.
• The gross rent less commission fees equals $7,920,000.

Incorporating a Book Direct strategy of just 50% of their total bookings can lower their commission payments and increase profits.

• The manager still grosses $8,800,000 in rent.
• Half of the reservations were generated from the online travel agencies. The commission fees are now $440,000.
• The rest of the bookings are generated directly to the property manager so there are no commission fee payments required.
• The gross rent in this case equals $8,360,000.

Incorporating a Book Direct strategy of just 50% of their total bookings can lower their commission payments and increase profit.

That’s adding $440,000 dollars to their bottom line!

Second property homeowners are also finding benefits of incorporating a Book Direct strategy which saves on average 10% of the reservation amount from commission fees paid to large OTAs (online travel agencies). Savings are significant whether you are a single property owner or hold several short term investment properties. The example below examines the savings of a multi-property homeowner.

Multi-Property Homeowner Example:

Florida Homeowner with 5 short term properties annually grossing $88,400 per property ($2,000 per week – 85% occupancy)

No Book Strategy

• This homeowner grosses $442,000 in reservations.
• Utilizing only online travel agencies commission fees averaging 10% equals $44,200.
• The gross rent less commission fees equals $397,800

Incorporating a Book Direct strategy of just 50% of this homeowner’s total bookings can lower their commission payments and increase profits.

• The homeowner still grosses $442,000 in rent.
• This time half of the reservations are generated from online travel agencies. The commission fees are now $22,100.
• The rest of the bookings are generated directly to the homeowner so there are no commission fee payments required for these reservations.
• The gross rent in this case equals $419,900

Incorporating a Book Direct strategy of just 50% of their total bookings can lower their commission payments and increase profit.

That’s adding $22,100 dollars to their bottom line!

The new consumer behaviour and ensuing new traveler avatars may be here to stay in the near future. Maximizing on these changes will help rental managers and homeowners acclimatize to this brave new world. If you haven’t already identified several rising traveler avatars yet, you better hurry up as second waves of the pandemic are being experienced around the world. These new consumer behaviours and ensuing new traveler avatars may be here to stay in the near future.

Consumer Behaviour’s perception of vacation rentals as being a safer choice for accommodation over traditional hotels has resulted in a huge influx of first-time vacation rental guests. New guests coming from city apartment dwellings into private homes are learning to manage new amenities such as pools, hot tubs, etc.. This results in the need for structured protocols to educate these new guests, as well as maintenance protocols arising from more wear and tear. Conversely, these new customers can be turned into repeat guests and glowing referrals to their friends. A recent study indicated that 92% of travelers trust travel location referrals from friends and family.

The world suddenly moved away from brick and mortar offices and schools to ‘work-from-home’ and ‘web-learning’ environments which continued throughout 2020. Homeowners have switched up marketing with more in-demand amenities such as free wifi and showcasing high-speed ratings in order to meet the needs of the strongest avatar in 2020, the Digital Nomad.

Include college and university students in the Co-Living Digital Nomad mix, who are socially banding together in their own bubbles to learn remotely by day and enjoy an incredible vacation rental by night. YOLO!

The rise of remote work and web-learning from home has created a new guest avatar. Digital Nomad Families opting to travel off-the-beaten-path to rental homes enjoying their time self isolating which includes bringing along the entire family including their pets! A recent  U.S. Census Bureau’s American Housing Survey reveals “the share of households with pets is at 68%.” Don’t rule out this opportunity to increase your income through pet premiums of up to 30% of the rental rate.

As families have had to sit back and take stock as to what is important, there is an increase in demand for larger homes used for ‘family bubble’ accommodations. This includes the extended family that has sheltered together.

Typically this avatar is most prevalent during a weather crises such as hurricanes, earthquakes, and forest fires. The 2020 pandemic forced frontline workers to isolate themselves from their families, and first responders arriving into high COVID zones are looking for vacation rentals to stay for short and long term periods.

The absence of nightclubs, bars, and supper clubs have opened up the eyes of event promoters to use vacation rental homes as a base for their events. These large house parties are often illegal under COVID restrictions and sometimes result in violence. Rental Managers and owners need to review their event policies (min age, max. occupancy, events allowed, damage deposits) Educating booking agents as to suspicious bookings (ie: renter booking a home with a residence in the same city for a 1 night weekend stay). Digital technology can help deter over-occupancy and parties with video and monitoring noise, cell phones, etc…

Pandemic safety protocols, as well as a new generation of vacation rental guests, have increased the demand and requirement for new technology. Instant booking options on all booking platforms including business websites is expected as well as on the ground technology such as keyless entry, noise monitors and size of party monitors.

Destination Analysts reported in their September 2020 survey that just 29.9% of average American Travelers have confidence that travel is safe. Another National Tracking poll survey revealed that travelers rated cleaning and hygiene at 55% for the most important factors when looking at lodging.

The pandemic forced both property managers and owners to come together with government agencies to develop actionable cleaning standards. Independent accreditation is on the rise and demonstrates to consumers and government that the vacation rental industry is professional and assures that vacation rentals are a safe option during a pandemic. Check out VRMA’s SafeHome Marketing Campaign

Fluid Situations Increase demand for more Flexible Cancellation Policies as community spread pops up in one area and is fully under control in other regions. Travelers are looking for special COVID flexible cancellation policies as an easy way to protect their vacation investment.

Price Comparison and Book Direct demand is Rising The unemployment rate in the U.S. was an astonishing 14.7% in April 2020,  flattened out to 7.9% in September when it has historically hovered around 3.5%. Money is tight and the average American traveler is more price-sensitive than ever. Similar effects are experienced throughout the globe.

Price comparison shopping for vacation rentals is more common. Once travelers decide on a rental home they then search the internet for the best price for that home. Diversification in marketing portfolios will meet this demand with more distribution on Book Direct regional sites, price aggregation sites, as well as business websites with rate/quote calculator information readily available.

Expect consumers to ask for discounts as they assume the vacation rental industry is desperate for bookings after the government shutdown short-term rentals earlier in the first quarter.

Domestic Travel Skyrockets. Border closures are common in 2020 as well as travel restrictions within countries so consumer behavior has reverted to domestic travel. Savvy owners and managers have collected data on their client zip codes to produce heat maps to change marketing and advertising strategies towards their new client.

International Travel Continues to Remain Bleak. The International Trade Commission Data reflects a 93.6% decrease of international non-resident traffic into the United States from March to August 2020. As the United States continues to battle the pandemic the international traveler stays away. International travel is based of course on country recuperation and border re-openings. Rental accommodation owners may start seeing increases in travel as things slowly start to open up in low and COVID free countries.

Fluid Situations & Domestic Travelers Shorten the Booking Window. In regions where bookings typically take place one year in advance, short term rental stakeholders are now experiencing more last minute bookings. Travelers are looking at the latest COVID statistics to see if they want to visit an area. The lesson here is not to offer last-minute discounts too far in advance.

Travel Insurance. Almost unheard of for domestic travel, consumers are looking for information on travel insurance, how it works and what policies are covered during the pandemic. It’s falling on the shoulders of the rental owner and manager to educate the traveler. Savvy stakeholders have adopted some type of affiliate relationship into their booking processes to lower their risk and increase income in this category.

Longer Stay Demands With the increase of the new digital nomad avatar, the demand for longer stays remains prevalent. Florida Rental By Owners, a regional book-direct listing site,  experienced a huge increase in longer stay searches year-over-year from March to September 2020. A whopping 135% increase in searches for vacation rentals offered for one month stays or longer. Don’t rule out longer stays specifically for urban market recovery.

Traditional Seasons Become Blurred Where the fall 2020 season would typically be considered low-season for many areas, the changes to our home and school environments raised the demand for off-season travel. VRBO reported new family travel data this fall with a rise in families booking trips in the third and fourth quarter. Florida Rental By Owners also reports a 71% increase in inquiries year over year, since vacation rentals re-opened.

“Vacation rentals ranked first among types of vacations respondents say they want to take now through December, specifically to “spend time with family and friends (they) haven’t seen” – VRBO Flexcation Survey

There’s no doubt about it that the short-term rental industry experienced disruptive changes to traveler avatars, preference and behaviour. The year 2020 demanded the evolution of vacation rental stakeholders.

Rental guests are now looking for low-risk, predictable and trusted local options. This includes the most important item on their list, health and hygiene. The fear of potential quarantines and lockdowns alongside with the concern for social distancing and masks will guide consumer behaviour in the coming months. Innovation and new technology is the impetus from the COVID-19 pandemic.

The good news is that many of the challenges and changes in traveler behaviour of 2020 when analyzed carefully can be converted into opportunity and ultimately the building blocks towards a stronger future of the vacation rental industry as a whole.

Florida Rental By Owners’ continued growth in 2020 of website traffic and booking requests makes it the trusted preferred choice for property managers and homeowners to take control of their business structure and policies. Perfect for short term stakeholders looking for guests to fit the unique vacation needs of Florida travelers. We have exciting plans for 2021 with new software developments and partnerships that will help Property Managers and Homeowners increase their Direct Bookings and profits.

Are you interested in advertising your Florida vacation rental on a Book Direct listing site? Explore our multiple subscription levels for any budget. No commission fees mean owners and managers increase their gross profit. Taking control of the reservation booking cycle helps more owners and managers close more sales. All traveler contact details are revealed in each booking inquiry and quote request. Find out more on our List Your Property page here.