At the beginning of the global crisis, there was a flood of property managers and Airbnb hosts with empty properties and no sign of bookings coming back anytime soon. Many owners, especially those in city locations, decided to throw in the towel completely and give up on the once-lucrative short-stay rental market and look for the more secure long-term tenants.
However, many professional property managers took the view that the best way to capitalise on the current climate, meet the needs of their customers and keep business afloat was to shift to offering mid-term rentals. A mid-term rental is typically classed as a stay of nothing less than 28 days and nothing more than 6 months.
During the lockdown, offering mid-term stays and filling otherwise empty properties made complete sense for housing key workers and others needing to live/work remotely from their own homes. In response to the dramatically shifting short-stay market, Airbnb, the home-sharing platform, also shifted focus to mid-term stays by marketing monthly stays.
Even before Covid-19, there was a definite trend towards mid-term stays with a clear market for the rising ‘digital nomad’ generation (that has nothing to do with age).
Combining work with living in a different location was seen as a lifestyle choice for those lucky enough not to be tied to a desk or mortgage. Niche platforms matching ‘nomads’ with suitable properties started to pop up such as Spotahome and Anyplace.
Moving forward, with many companies following government guidelines and extending their ‘work from home’ policies indefinitely, more and more of us are being tempted by the attraction of living and working in spaces that are not our normal homes.
It’s not just the digital nomads that are looking for mid-term lets. During the last six months, a slowed down but still a growing segment of the industry, is made up of corporate travellers opting for ‘alternative accommodation’ on business trips and for staff relocation.
Founded in 2018, AltoVita, a global corporate accommodation platform and distribution system with 20,000 properties across numerous international locations, is set to disrupt the traditional global mobility market with a fresh way of using both technology and a high-quality inventory plus service.
Vivi Cahyadi, AltoVita chief executive, says that they are seeing relocations, particularly driven by prospering companies during the pandemic, which are driving the majority of its mid-term stay demand with employees preferring private accommodation versus traditional serviced apartments.
The types of properties that work best for mid-stays tend to be fairly specific. Emily Bruce-Watt, managing director of London based Air Peace of Mind, suggests that the more corporate style properties are the ones which are being booked.
So ones that are modern, uncluttered, stylish and in good central locations. Being close to a park is more preferable than being close to public transport links – which is (currently) not important at all. Guests are also looking for locations that are either nice for working in, in a location they are thinking of moving to, or are near family and friends.
It’s not just travellers who are a potential market for a short-term to mid-term rental shift. Tenant preferences are also changing in favour of shorter leases.
In the US, according to the latest National Apartment Association survey, 35% of apartment tenants are transitioning to shorter or month-to-month leases. Many of the millennial and Gen-Z generations have embraced not getting onto the property ladder, but instead, prefer the concept of ‘NOwnership’ and the flexibility that affords them. Mid-term rentals are an ideal fit here.
When it comes to who is best placed to manage and serve these markets – it’s a tough call between the traditional long-let estate agents and the short-stay property managers that are more used to processing and serving ‘travellers’.
The first is perhaps better equipped to deal with the more rigorous legalities and administrative tasks involved in closer to permanent rentals – however, the short-term rental property managers are very adept at both finding and servicing the guests.
Only time will tell how the mid-term rental market will fully evolve, but the fact that there is a definite shift in this direction opens up new revenue opportunities and addresses a shift in the marketplace.
*Jessica Gillingham is the director of Abode PR, a member of the Chartered Institute of Public Relations, a non-executive director of Visit Bath and the founder of industry resource PillowTalk Media.
This post has originally been featured in Property Investor Today.