On the August 1st of the Month Bonus Episode, Alex & Annie welcome the return of Simon Lehmann - CEO and Co-Founder of AJL Atelier, a boutique consultancy that specializes in the international private accommodation and vacation rental industry. The topic of today is the shifting landscape of the short term rental industry, and what the current situation is in different STR hotspots around the world.
Simon has a 360 view of the global vacation rental market, as both his consultancy and the clients he serves operate around the world. One of his insights is that international airfares have reached unprecedented levels, while domestic travel has taken a backseat. European economic downturns typically arrive with a delay compared to the US, so this ripple effect is expected to drive down international demand in 2024 and return domestic travel back to status quo.
Simon mentions that the current macroeconomic situation with interest rates hiking is making short term rental investments less attractive to investors. The increased cost of capital has even shaken up giants like Airbnb, causing them to decrease the exorbitant fees they had climbed up to over the last few years.
This isn’t necessarily a bad thing for the industry. With less people treating short term rentals as a goldmine investment opportunity, truly professional operators will have a chance to shine in a less crowded market and regain the market share they possessed prior to the Airbnb boom.
The way Simon sees the market shaping is that professional operators are now having a resurgence, as the barrier of entry for a successful short term rental property manager is increasing. He sees professional hosts getting their market share back by integrating the right technology, having better accessibility through book direct vendors, and most importantly - fostering stronger long-term relationships with homeowners.
The current downturn isn’t affecting every destination equally. The markets that are most damaged right now are 2nd and 3rd tier destinations, with real estate companies reporting unprecedented churn rates as newer operators that placed investments into short term rentals during the Airbnb rise of the last few years are now looking to unload their properties due to shrinking profits.
Tune in to the full episode to learn how to navigate the market changes of 2023 and avert future crises!
HIGHLIGHTS
04:39 The Market Has Softened - What Now?
08:43 Which Markets are Most Affected in 2023
11:01 Cost of Living Crisis in Europe
13:24 Climate Crisis - What’s Next?
16:02 Simon’s View of The Bear Market
23:28 How Professional Operators are Increasing Their Market Share
25:45 Building Trust Through Transparency
31:02 Homeowner Generational Changes
33:45 Simon’s Message for the Remainder of 2023
This episode is brought to you by Casago, Guest Ranger, and Good Neighbor Tech.
Visit AlexAndAnniesList.com to view our top picks for the best suppliers in vacation rental technology and services.
Special thanks to Rev & Research for being the presenting sponsor of Alex & Annie’s List.
Connect with Simon:
Website - https://www.linkedin.com/company/ajl-conulting-gmbh/
Linkedin - https://www.linkedin.com/in/simon-lehmann-8375753b/
Connect with Alex and Annie:
Alex Husner - https://www.linkedin.com/in/alex-o-husner-%F0%9F%8C%8E-1844306/
Annie Holcombe - https://www.linkedin.com/in/annie-holcombe-vrgal/
AlexAndAnniePodcast.com
