How to Succeed in The Short-Term Rental Industry in 2023 – From 4 Vacation Rental Experts

The short-term rental market has grown exponentially over the last few years, and it's not stopping anytime soon. In fact, industry experts predict the market will continue to grow by almost $63 billion from 2020 to 2024.?

As a host, you're ready to hop on this trend and build your own short-term rental business. But how will developments in 2023 shape the future of the industry?

We talked to five vacation rental experts to get their expert advice on what lies ahead — the opportunities, the challenges, and tips for new and experienced hosts to get ahead of the game in the new year.

Key Takeaways: 5 Trends You Need to Know Moving Into 2023

1. Technology is the key to optimizing your listing and enhancing the guest experience
2. Luxury markets may take a hit, but less so in key destination markets
3. Guests are conducting more research when choosing accommodations
4. OTA vs direct bookings: both will weather the storm
5. There will be an increase in mid- and long-term stays, so plan accordingly

Since the industry is moving fast, it can be hard to keep up with all the changes. Luckily, the experienced hosts mentioned below know exactly what they're talking about. Keep reading to learn more from these seasoned experts and hear their unfiltered advice for building or starting a vacation rental business in 2023.

1. Patryk Swietek, STR Nation

“I predict 2023 will have a lot of hosts dropping out of the short-term rental game due to joining the Airbnb craze in the last two years and finding out it’s not as easy as they thought. However, I do believe the demand for travel will still go up, especially to destination locations. I predict prices will continue to go up, and the hosts that can weather the storm will be able to reap the benefits!”

Key Advice for Hosts: Consider getting a design refresh, adding high ROI amenities, and optimizing their listing through technology.

2. Emily and Sarah, Karwell Design

“As 2023 begins we see the host competition rising. Not only in the number of listings on Airbnb — but design, amenity, and operation standards are getting steeper too. Simply furnishing and listing a property won’t be enough anymore. Hosts who truly prioritize guest experience will begin to thrive and other hosts will have to pivot to ensure that they can stay in the game.”

Key Advice for Hosts: Prioritize the guest experience and pivot to stay in the game.

3. Brindy Bringhurst, airbrindy.com, @airbrindy

“Airbnb has already announced ‘categories.’ Next up, I think hosts will have more ability to customize how their listing appears to potential guests and how they show off unique features. I think it's only a matter of time before Airbnb allows hosts to upload short videos to show off their properties.?

Additionally, more hosts will start looking for ways to encourage return guests via direct booking websites. At the same time, guests will start to notice Airbnb hosts putting in more effort to collect emails and marketing efforts to encourage returning guests.?

I also saw a significant increase in longer stays this year. Slower bookings due to the recession make mid-term stays (more than 30 days but less than a year) more attractive for hosts. This is also a more viable option for guests now that we have more remote work opportunities.?

Lastly, I predict a rise in owner-hosts and a decrease in investor-owned properties. More people will gravitate to Airbnb and short-term rentals to earn extra income on their own homes to offset inflation, and fewer investors will buy homes to turn into vacation rentals.”

Key Advice for Hosts: Build a team to support you and your business. Find a cleaner and a handyman you can trust. I also recommend finding a plumber and HVAC repair person who you know you can call when you need it. This will make it a lot easier to quickly resolve issues that will inevitably arise.

4. Caleb Hannon, Stay Lake Norman

“Consumers are learning our space just as much as we are. They are starting to learn the trends in what we do with our pricing. They are starting to catch on and find deals and the best times to book.

In terms of direct vs Airbnb, I think everybody should build a book-direct brand. I don’t know that in the next 5 years, we’ll be able to educate the consumer to not go to OTAs (online travel agencies) first. I believe the consumer will go there first, especially when going into a new market or location, and some of them will catch on to the direct booking websites once the connection is established.

As a luxury STR owner, I don’t anticipate that our market is going to fall off a lot. However, I do think some of our bookings and listings will be adjusted in the new year.”

Key Advice for Hosts: Build a direct booking brand. It will be hard to educate consumers who start their journey on OTAs but keep working on building a personal brand with a direct booking website.

Success in the Short-Term Rental Industry

Achieving success in the short-term rental industry in the year 2023 is going to take more than just a basic understanding of the regulations and business logistics.?

Airbnb hosts should be looking to capitalize on trends in their business by constantly improving their properties, guest experience, and business flows. Investing in technology advances via apps and websites is also a great way to accommodate the influx of guests who are looking for mid- to long-term stays.

There is no doubt that the short-term rental market will continue to grow in the coming years, but it's up to you to capitalize on these trends and make the most out of the next few years while they still count.