Vacation home rentals really hit their stride during the Covid-19 pandemic as many people switched to remote work. The ability to juggle personal and professional pursuits under the same roof continues to take center stage, even as many people return some parts of their life to “normal.”
According to a recent Bankrate story, there is a growing trend of homeowners in vacation areas, especially in outdoor-friendly destinations, looking to rent their homes to visitors. This goes beyond tourists and encompasses repeat visitors traveling to a destination to work and relax in the same place.
Mike Flannery, CEO of Acme House Co. and Flannery Exchange, agrees. His company rents vacation homes in destination markets like Palm Springs and has seen tremendous growth during the pandemic. He reports many repeat visitors staying in his company’s rental homes multiple times per month, often for at least five nights at a time.
“We have several guests that have stayed with us once a month for the past six months,” says Flannery.
This also presents an interesting opportunity for those looking to invest in real estate.
Ian Jeffries, a public relations executive in Seattle, is the perfect example. He and his husband finally purchased their dream home, named Golden Grove, in Palm Springs. The warm-weather destination has always been a favorite vacation destination for them, but their office jobs held them back from making a second-home purchase.
“It felt like we would only ever be able to get away for long weekends, but then came Covid—and the revelation that we could work remotely for extended periods of time,” says Jeffries.
Jeffries believes that remote work is here to stay, and long-term rentals in vacation home destinations will only continue to grow. It made sense to him that now was the time to invest in a second home to use also as a rental unit.
“The short-term rental market in Palm Springs, while highly regulated, is one of the strongest in the country, which could help offset our mortgage.”
Flannery says requests from vacation home owners to join his rental program have grown, too, with a 300% year-over-year increase. Acme House Co. is especially discerning in the types of rental properties it represents to assure they meet particular standards, like each bedroom having its own bathroom.
With bookings up 40% over 2019 (the last “normal” year), Flannery explains how Covid-19 affected his company, his plans to launch a Palm Springs co-working space and how the vacation home market is set to rebound bigger than ever.
Are people planning longer vacation rental stays?
Flannery says his company does not have its usual multi-month stays from Canada and other parts of the world due to Covid-19 entry restrictions, but easily replaced that occupancy with many five-to six-night stays from people within driving distance that wanted a change of scenery.
Many discovered that Palm Springs is a year-round destination and an easy drive for a long weekend trip, adds Flannery. Even remote work trips work well since vacation homes have well-appointed amenities and pools. They offer a flexible work environment with more space than a hotel room. Interestingly, Acme House Co. guests are coming back every other week. The stay may not be a lot longer than before, but repeat stays are becoming more frequent.
According to length-of-stay data from a Vacasa.com report, seven-night stays grew the most over the past year indicating that people are willing to stay in one place for longer. According to the report, the average stay length is up 5% compared to last year.
Is Acme House Co.’s guest list changing much?
Guests hail from California and the Pacific Northwest, but also markets like New York and the Midwest. Airlift helps as domestic airlines have been beefing up their schedule in vacation-focused domestic destinations like Palm Springs. This expands the pool of potential visitors, especially those like multi-generational families or couples traveling together that want more space than a traditional hotel. Many Acme House Co. guests drive to Palm Springs, too.
How did Acme’s plans for co-working space change?
The company was already planning to open Flannery Exchange, a co-working space in an abandoned downtown Palm Springs building, before Covid-19 hit. Very early on in the pandemic, it became obvious that companies were quickly embracing the work-from-anywhere culture, but some modifications were in order.
Flannery pivoted slightly from the entire building being co-working space to more of a mixed-use space. It’s still a place to exchange ideas over coffee in the cafe or on rooftop deck, but it also features some traditional, smaller executive office spaces. They are ideal for those working remotely, but who may have a hard time doing so with others around them. Acme House Co. guests get a discount at Flannery Exchange.
According to Flannery, people are looking for what he calls “Cowork 2.0.” People want the flexibility of co-working and communal spaces, but with the privacy of a traditional office space that they can make their own and lock at the end of the day.”
According to a recent survey of 500 digital nomads by tech care company Asurion, 97% of respondents say they’ll continue to mix work and vacation this year. This explains why high-speed internet is so important, not just for hotels, but also for vacation rental properties that wish to compete. The survey ranked strong internet as a “must-have,” even higher than availability of amenities such as towels, linens and cookware.
Flannery says his company made sure its vacation home rentals were updating their living spaces to accommodate comfortable work spaces. He also wanted them to beef up wireless internet capability so that multiple people can connect at once. Acme House Co. also offers guests a way to print documents to recreate the office experience, even if they do not reserve co-working space at Flannery Exchange.
Why is a vacation rental better than a hotel room?
Vacation rentals provide multiple bedrooms, a place to gather and amenities like a pool and hot tub that you do not have to share with other guests. There is plenty of space to work or relax without disturbing others in your party. Having your own kitchen also makes it easier than navigating changing restrictions in hotel restaurants or with their (non-existent) room service menus.
Jeffries sums it up best, “even a Monday full of Zoom calls is more palatable if it’s spent poolside.”