Short-term rentals, the importance of professional management

As the management of the real estate market changes, in particular that of short-term rentals which, especially in large cities, have become an opportunity for both those who own properties and those who travel, at a time like Milan Design Week that sees the demand rise dramatically with offers that can reach up to a thousand euros a day for the week, it is interesting to look at what the level of health of this is actually industry and why it’s important to look at the big picture.

“Today’s market is very different from that of recent years, but also compared to the pre-pandemic era. We have a volume of travelers in our country, especially foreigners, that continues to grow significantly. These are tourists with very high expectations, especially attentive to the management service of the facility in which they decide to stay. To meet this demand, the supply of online real estate has undergone profound transformations, with the increasing affirmation of professional management, which is the only one able to take up the new challenge of apartment tourism. Only by reading these transformations within the world of short-term rentals can we understand the latest trends in the sector”, this is the opinion of Francesco Zorgno, president of
CleanBnB,
a company listed on the Milan Stock Exchange on the EGM segment, which manages short-term rental properties with over 2,600 units in more than 80 locations throughout Italy.

The numbers

In recent years we have witnessed a continuous growth in rented housing with short-term rentals, but the numbers processed by the Rescasa-Confcommercio Study Center speak for themselves: in Milan, for example, out of almost 20 thousand apartments on the main online platforms, in the last 12 months, only less than half had significant occupancy rates, while the others were only marginally used or remained largely empty. These percentages are similar to those of Naples, Rome, Florence and the main Italian cities.

“Here is the real indicator that marks the difference between professional and non-professional management: only hosts with the appropriate skills and the most up-to-date work tools are in a position to keep properties available for long periods, and are able to attract bookings from a large number of guests. This is the way CleanBnB operates, which in 2023 alone welcomed over two hundred thousand guests and this year is continuing to grow significantly but sustainably with +30% in the last three months. We are in an increasingly complex market that prioritises quality and efficiency in management,” adds Zorgno.

Online Apartment Occupancy Rates

The figures in the table are from Insideairbnb.com, are current as of April 12, 2024, and refer to the last 12 months. In the first column, the total number of short-term rental apartments on online platforms. In the second and third columns, accommodations occupied for less than 60 days a year, in the fourth and fifth columns, those rented for more than 60 days.

Last minute and flexibility

CleanBnB’s experience has identified at least two factors that have recently become decisive for the choice of an apartment. “Contrary to what was happening even a year ago, today the last-minute approach is a growing trend, with customers ready to book at the last minute to take advantage of cheaper rates, and increasingly wider booking windows. In this context, it becomes crucial for operators to implement a dynamic pricing policy, also supported by professional software to adapt rates in real time based on demand. The phenomenon is also evident at this time, as demonstrated by the booking trend at the Salone del Mobile in Milan. But there is also another parameter that is now fundamental for the choice of accommodation and that is the flexibility of reimbursement. Travellers choose accommodation if they are sure that they will be able to cancel at the last minute without paying any penalty.”

With data of this type, it is very clear how a non-professional management, even of a few short-term rental apartments, is destined to record a number of stays much lower than expected. The success rate in this competitive market is no longer measured so much in terms of tariffs, which are in the process of consolidation, but above all by the employment rate. To maintain and increase this index, investments in revenue management tools must be targeted and constant, the ability to manage critical issues must be rapid and effective, the approach to the customer must be transparent and immediate, ready to respond promptly and effectively to every request. In short, the short-term rental market has grown, it has become large and it is making an important natural selection on its own. (Photo by Szymon Fischer on Unsplash)

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