New market forecasts predict strong growth in the European holiday rentals market. They also hint at ways small-scale landlords and property owners can capitalise on this 21st-century travel boom.
According to quantitative and qualitative research1 conducted exclusively for ASSA ABLOY, from a base of €23.28 billion ($26.247 billion) in 2016, SAC Insight data suggests the European holiday rentals market will be worth €32.5 billion ($36.642 billion) by 2023. Compound annual growth is forecasted at 5.8%.
The growth of international players like Airbnb and HomeAway is well documented. Yet almost 90% of holiday rentals revenue is generated by non-global players, a figure which includes over 42% of total European revenue earned by homeowners who market their property directly. The SAC Insight forecast predicts this homeowner direct segment will outperform the market, with annual growth of 7% between 2017 and 2023—good news for property owners who want to avoid typical 12–15% commission fees charged by holiday rentals agencies.
So, the opportunity in holiday rentals is significant at any scale or size. The question is: as a property owner, how can you stand out from the crowd? Aim for excellence to keep guests happier and the 5-star reviews flowing.
Facts to consider
One important market driver is the value proposition of a holiday rental versus a hotel or hostel at the same price point. This includes service and the perception of authenticity a holiday rental offers.
Smaller providers can also use deeper local knowledge to ensure properties stay on the right side of local laws, for example, ensuring guests a hassle-free stay. While the EU is looking at some harmonisation, chances are regulations for landlords will remain very different in Lisbon or Madrid, Paris or Amsterdam.
More data from the research1 points, unsurprisingly, towards much faster growth in online revenue, at 9.8% annually, versus 3.8% for offline booking. Small-scale landlords cannot compete with global brands on SEO or advertising spend. The importance of customer satisfaction for online reviews and positive word-of-mouth marketing will grow.
This is where a smart door lock helps.
Our research1 with homeowners who rent their rooms or properties directly suggest around 50% of enquiries come via person-to-person marketing, including repeat business, personal recommendation, and other referrals. The convenience of a smart door lock directly impacts this positive feedback loop.
Tired of handing over keys?
Admin benefits for landlords are clear. With a smart door lock, you spend less time managing physical keys; you eliminate the risk of lost or stolen keys and unauthorised copying. It’s less hassle all round. A smart door lock can be easily connected to a smart home system or a compatible service provider’s app. Or, if you prefer, you can run your smart door lock as stand-alone security device.
Also worth remembering for landlords who use Airbnb: from 2017 onward, to qualify for Business Travel Ready status, travelers must be able to check in without a person-to-person key handover. A smart door lock is the most secure and user-friendly way for landlords to offer this. And, according to a recent article by Bloomberg, business travel will be a major growth area for Airbnb.
Key handling is not just a landlord’s problem. It is a major worry for guests, too. With a smart door lock, they never get locked out. A PIN code or smartphone app is all they need to open the door, so there’s no need to carry keys or worry about losing them. With a smart lock, it’s easier for everyone in a large group to come and go as they please, because each guest can have their own temporary digital key.
High occupancy and satisfied customers
In Italy, Home at Hotel have already seen the benefit of installing a smart door lock on their boutique holiday rentals in Milan, Rome, and Cagliari. Properties are secured with an ENTR® smart door lock from Yale and integrated with the user-friendly SCLAK app-powered access system.
“No longer are apartment keys running around with the risk of being lost or copied,” says Francesco Postiglioni from Home at Hotel. “We can see when a guest has left the flat and can inhibit access if they do not respect the rules. We also have full control over our service suppliers, with the exact time they spend in the flat and when an apartment is ready for the next guest.”
Plus, with the ENTR® smart door lock from Yale, Home at Hotel is entrusting its clients to a lock brand with decades of history securing homes and offices all over Europe.
“Smarter locks make happier guests, which means more return visits and better online reviews for our clients in the holiday rentals business,” says Omer Sagi, Smart Door Lock Business Development Director at ASSA ABLOY, the parent company of Yale.
The outcome? Home at Hotel apartments fitted with an ENTR smart lock receive, on average, a 9/10 customer satisfaction rating—and average occupancy is running at 80%.
The lesson? With a smart door lock, landlords and property owners can charge a premium, and can expect the benefits to be reflected in customer satisfaction, positive word-of-mouth, return visits, and favourable online reviews.
A new 8-page report from ASSA ABLOY is entitled “Europe’s holiday rentals market” and packed with more exclusive data and charts, plus expert insight on the booming European holiday rentals sector and how smart door locks can help you serve it better. You can download the complimentary report here.
1: SAC Insight, “Europe Vacation Rental Market—Analysis and Forecast (2017–2023)”
ASSA ABLOY is the global leader in door opening solutions, dedicated to satisfying end-user needs for security, safety, and convenience. Since its formation in 1994, ASSA ABLOY has grown from a regional company into an international group with about 47,000 employees, operations in more than 70 countries and sales close to SEK 71 billion. In the fast-growing electromechanical security segment, the Group has a leading position in areas such as access control, identification technology, entrance automation, and hotel security. Visit them at www.assabloy.com.