Traveler behavior and homeowner attitudes are shifting. However, most insurance solutions are
lagging behind and not currently offering policies which give the tailored protection needed to reflect these shifts.
The vacation rental sector is emerging from the pandemic as the accommodation of choice for travelers wanting privacy, safety and space to both work and play. It had a booked-out summer and I predict that demand will hold strong going into 2022. Vacation rental data from Vrbo indicates that demand for “drive to” vacation homes makes up nearly 40% of stays booked – showing that guests are actively seeking accommodation in the domestic market for now.
As traveler behavior continues to change, in terms of the mode of transport, the type of accommodation booked and the length of stay chosen, second homeowners are starting to take note. They are beginning to change the way they rent out their assets – however, to encourage more to do the same, the industry needs to protect owners with tailored vacation rental insurance solutions and guest screening.
This mindset shift is key to how the vacation rental market will service the current high demand from travelers for homes. A buoyant supply of high quality properties is essential to enabling the sector to grow and continue to compete on the same level with other accommodation options.
A new homeowner mindset
Homeowners are starting to think more creatively about how they can make the most of their assets. Some have decided to try renting out their vacation homes for the first time, demonstrating a more open approach to second homeownership.
Others are even renting out their primary homes now, perhaps as part of a new flexible way of living and working remotely, in a move to earn extra income whilst away. A Realtor.com survey found that 32% of homeowners have experimented with different approaches to earning additional income from their properties.
So how can property managers give more second homeowners the confidence to rent out their vacation homes and boost much-needed supply in the sector? The answer: by easing any worries they might have about allowing an internet stranger, booking on Airbnb for example, entering their family’s home. This can be achieved through offering the owner the right, tailored insurance options as well as a comprehensive guest screening solution.
Insurance sector plays catch up
Traveler behavior and homeowner attitudes are shifting. However, most insurance solutions are
lagging behind and not currently offering policies which give the tailored protection needed to reflect these shifts. At Safely.com we see why specialised vacation rental coverage is so important to both owners and guests and how with the right tech-enabled solutions in place, property managers are able to grow their portfolios more successfully.
Without the right coverage in place, homeowners are putting their family assets at risk – time and time again, with each booking made. If owners don’t check their existing insurance policies they might find out (when it’s too late) that they aren’t covered when renting out their homes on a short-term basis. This could be both costly and off-putting, a sure-fire way of stopping an owner from renting again (regardless of the extra income earned).
On the other side of the booking experience, asking guests to pay a fixed fee instead of a damage deposit removes any friction with the owner if things do go wrong. Also, having the right insurance in place upon booking further proves the owner to be a professional operator, offering a high level of hospitality and customer service – and might just cinch the deal.
Future opportunities
As demand in the vacation rental sector continues to grow, the insurance market will need to respond to this new risk category and offer specialist solutions, as we do at Safely.com. There's a huge opportunity now for second homeowners to capitalize on this demand and rent their assets safely and securely, for property managers to grow their inventories with quality supply, for guests to have memorable travel experiences, and for insurance companies to develop tech-enabled solutions for the sector.
Andrew Bate is co-founder and CEO of Safely.com, a leading insurtech and guest screening solution for the vacation and short-term rental market. Since its launch in 2015 over $50 billion of homeowner liability has been covered.
