In the rapidly evolving hospitality landscape, the rise of Short-Term Rentals (STRs) for business travel signals an unprecedented shift. Nearly half of all travelers are now choosing STRs over traditional hotels for their business trips, a trend driven by the unique blend of comfort, flexibility, and economy that STRs offer.
In fact, recent MODIV Mindset data reported that of those planning business travel, "68% are willing to pay more for an STR than a traditional hotel for a business-related stay when the experience is seamless."
Yet this burgeoning sector is not without its limitations. Regulatory hurdles, a lack of standardized services, and inconsistencies in quality often pose significant challenges.
The Pros
Comfort & Convenience:
STRs are usually larger and more spacious than hotel rooms, providing business travelers with a proper workspace and more room to relax. STRs also give business travelers more control over their living environment as they can choose amenities and features that cater to their individual needs and preferences. With today’s fast-paced lifestyle, more people are choosing to blend their business and leisure time and STRs accommodate this preference well.
Cost-competitiveness:
Statistics show that an STR can cost up to 30% less than a hotel room with similar amenities and accessibility. Travel managers are in a better position to leverage STRs that come with added perks like laundry facilities, fully equipped kitchens, and free parking, reducing costs further. STRs offer more affordable pricing options than hotels, especially when booked for extended periods.
Flexibility:
Booking an STR for business travel is more flexible compared to traditional hotel bookings because there are a wide range of rental options available. STRs offer a variety of rental lengths including daily, weekly, and monthly, giving business travelers the power to choose how long they’d like to stay and customize their travel schedule to meet their business needs.
The Cons
Lack of standardization in services, quality, and pricing across various vendors.
Unlike traditional hotels, there are no standard amenities associated with STRs. This can make it difficult for business travelers to know what to expect from their rental and can lead to inconsistency in quality across STRs.
Inconsistent Guest Experience:
Owners and operators of STRs are not held to the same standards and regulations as traditional hotels, which can result in frustration and disappointment on the part of the business traveler.
Regulatory hurdles.
There are still many cities and countries that have either banned STRs or are in the process of implementing regulations that pose a challenge for STRs to obtain licenses and comply with legal requirements.
For more on traveler sentiment and trends in STRs, check out MODIV Mindset: STR Snapshot.
Interested in where MODIV can support growth-minded STR operators in navigating the challenges and opportunities facing the market? Visit our services page or contact us directly at hello@themodivgroup.com.