Recently I watched Mark Zuckerberg’s video release announcing their re-brand to Meta and his plans for Facebook’s Metaverse. In the video Zuckerberg talks a lot about what he sees as the future of Web 3.0 and how we will all be living in parallel virtual universes that seamlessly integrate the digital with the physical. He envisions a future where we will meet our friends in virtual coffee shops and will change the view outside our living rooms by touching a button.
Now, stay with me for a moment. This all may sound fantastical and unrealistic based on our inherent human nature (if you haven’t watched Tourism Iceland’s parody of the announcement – you must) but when Zuckerberg started talking about how the Metaverse will impact our working lives – my ears pricked up. He made statements such as “No-one wants to do long commutes anymore and that most of us can work from anywhere”. He talked about the coming reality that “For many businesses, collaboration and connection will be enhanced by technology” and that remote working will become the norm.
But what does this mean for the short-term rental industry? Housekeeping and maintenance will never be remote unless we innovate further and robots can overtake humans in these tasks. Much of remote operations and management is already facilitated by technology. However, what Zuckerberg is telling us and what we are already witnessing is a Revolution. A time of cataclysmic change in the way we work which has a huge potential impact for the short-term rental industry. We’ve already seen a shift in the way companies embrace remote teams during and post-pandemic and there is more to come.
In Facebook’s new world we will almost all be commuting 30 seconds to our desks and donning VR glasses to meet Donna from Accounting in a virtual cafeteria or bumping into Mike from Marketing by the water cooler. The bits of connection we’ve all missed over the last 18 months will be replicated in a virtual world. Without solid concrete buildings for offices that tie us to a location, then of course the obvious will happen and why wouldn’t we all be flexible about where we stay?
What’s more, consumer preference is also changing. We are heading into the headwind of ‘generation rent’. As we know, Post Millenials are far less interested, or indeed expectant of buying property and much more interested in experiences and flexibility. Not only are we seeing growth in a flexible and remote workforce but also growth in a ‘gig economy’ with shorter working contracts. Populations are becoming far more transient and we are seeing this play out in the demand for flexible leases that are far shorter than the norm of 12 months.
Work and travel are blending. It’s not just the executives that can soak up the sun or experience new cultures, normal ‘office workers’ are realising that they can lengthen a weekend away by bringing their laptop, or can spend time travelling from city to city and trying out many different locations or take their family (like I’m doing next summer) for an extended stay in another country.
All this moving means that we will need places to stay. The demand for short to mid term rentals will boom. Beds will never go out of fashion. And no-one wants to stay in a hotel beyond a few days. Airbnb is betting on this. In a recent podcast with The Verge, Brian Chesky said that the future of work is the future of travel. He went on to say that 20% of their booked nights are for stays of over a month.
But where will we all stay? We’re already maxed out in many locations with supply lagging behind demand. This is where I think the industry needs to get creative and do some blue sky thinking and indeed, we’re already seeing new solutions and business models emerging to boost supply.
Distressed hotels are putting kitchens in their units and creating livable and functionable spaces. Owners of multifamily assets are adopting strategies with units, floors and whole buildings that ‘flex’ between short, mid and long term rentals. Hotel chains are already investing in vacation rental brands and offerings, purpose built student accommodation are ‘popping up’ as short-term rentals for limited periods when the students have gone away.
Big money is moving into commercial real estate and investing in ‘alternative accommodation’ markets. New stock is being built specifically for vacations. The rent-to-rent model is moving on with operators and owners allowing tenants the opportunity to sub-let their units for part of their tenancy agreement and savvy investors are looking at either re-deploying poorly performing commercial inventory or moving to mixed-use urban buildings. We also know that even without these new avenues to supply, according to Pacasa, there are still an estimated 30 million second homes globally that have never come to market.
All of these solutions will require a widening of our thinking and a need to be creative but there are already operators and technology suppliers that are looking beyond the horizon and are finding new opportunities and supply channels for what is set to be a revolution in the way we work, rest and play.
About Jessica Gillingham
Jessica is the founder and managing director of Abode Worldwide, an award-winning B2B public relations consultancy and agency focused on raising the profile of transformative technology solutions operating within the global short-term rental, hotel and real estate ecosystems. The agency sits at the heart of the developing intersection between work, life and play in the property and hospitality markets and partners with technology solutions playing a lead role in this transformation. www.abodeworldwide.com