In 2021, short-term and holiday rentals contributed £27.7 billion to the UK economy, equating to 37% of the UK’s overnight tourism spend and 1.4% of GDP, rising to 4% in deprived areas.

These numbers highlight a sector growing in popularity amongst homeowners, hosts, local businesses, and the wider economy. A typical UK host earns £6,000 per year by renting either a spare room or an entire property. Very handy, especially during the cost of living crisis.

On average, short term rental guests spend £100 a day, 43% of which goes on retail, food, and drinks, while for every 200 short term rental visits a new job is created in local economies.

Short term rentals are also increasingly popular amongst consumers, partly due to the development and growth of the sharing economy and peer-to-peer accommodation platforms such as Airbnb and Vrbo. So, what are the main benefits of short-term and holiday letting for consumers?

In this blog we look at who uses short term rentals and how consumers compare them to other forms of accommodation, and why.

Consumer profile

Essentially, short-term and holiday rentals offer guests more space, greater privacy, and a ‘home- from-home’ experience hotels cannot recreate.

Short term rentals are used for both leisure and business travel purposes, the latter increasingly so. STAA members report seeing increases of up to 25% in business travel bookings since the pandemic ended.

Predictions that the short-term rentals sector will grow to make up 5% of the global business travel market means that, in the UK alone, business travellers will spend £235 million on short term rentals by the end of the decade.

Benefits

1. Space A typical hotel room comprises a bed and bathroom. Short-term rental properties are generally fully furnished and self-contained properties that have separated living and bedroom spaces as well as a kitchen. Ideal for socialising with family, friends, and work colleagues.
2. Authenticity: Compared to homogenous hotel rooms, short term rentals offer their guests unique and authentic experiences. For example, over a third of Airbnb guests say their accommodation enables them to experience an area they would not have visited otherwise, with over 50% acting on their host’s recommendations to visit places and amenities in the local area.
3. Flexibility: The rise of remote working is enabling digital nomads to keep in touch and complete tasks as they travel and explore new destinations. In the UK, more than 4.8 million Brits are self-employed, whilst freelancers make up to 46% of the UK workforce. 38% of British holidaymakers are now more likely to work for some time while on holiday compared to before the pandemic. Short term rentals are ideal for these workers because they provide an environment conducive to productivity.
4. Choice: As travel demand surges post-pandemic, UK business travellers face the double-whammy of an 8.2% increase in hotel rates and a lack of availability. This supply/demand squeeze saw average daily rates in London hotels reach record levels (£209) in June 2022. Short term rentals offer a perfect solution, with supply growing in both urban and rural locations.
5. Cost: Short term rentals can offer a cheaper alternative to hotels relative to the space they provide, and the flexibility to self-cater ensures that food and beverage expenditure can also be lower.
6. Value for Money: Although short term rentals aren’t always the cheapest option, they offer better value for money. For example, instead of booking separate hotel rooms, a team of project workers or a family can book a single three or four-bed property.
7. Duty of Care: Thanks to the TrustedStays platform which connects travellers and travel management companies with short term rental operators through a single click, short term rentals the meet corporate Duty of Care needs, can now be easily accessed by businesses and employees. The larger spaces and kitchen facilities can actually enhance guests’ physical and mental health.
8. Quality standards: The STAA/Quality in Tourism accreditation is recognised by the UK government, so guests can feel confident in booking accommodation through TrustedStays or STAA accredited companies that is inspected by a professional 3^rd party to give them confidence.
9. Outdoor space: Short term rentals are ideal for families, who now account for 31% of staycation bookings. They offer outdoor spaces and gardens; 35% of 2022 bookings now include dogs, up 2% on 2021.
10. Supporting the cost of living crisis: For bigger and low-income families, short term and holiday rental accommodation can be a much more budget friendly option, especially during the cost of living crisis, because of the range of available properties. 51% of Brits now take their UK holidays in self-catering accommodation because it is cheaper per person.

That’s not to say consumers must choose between hotels and short-term rentals. Hotels are also succeeding in the current environment, demonstrating that consumers want different options for different types of stays.

Short term rentals now represent a strong percentage of the overall accommodation market, with 16% of travellers citing the segment as their preferred accommodation choice compared to 51% for hotels.

“Industry data from STR shows that consumer preferences are changing post pandemic with short-term and holiday rentals up and incredible 11% vs. most other accommodation types down from 2019.  As consumers experience both peer to peer and professional stays in the market, they understand the wide choice on offer for all types of stays and with demand stronger than ever for this type of accommodation, it is now firmly a mainstream choice. 

The STAA works to ensure the responsible growth of the sector and consumers can look for STAA accreditation as a mark of confidence when booking their next trip. ” says Merilee Karr, Chair of STAA and CEO of UnderTheDoormat Group.