The Sparrow team attended for the third year in a row the BnB Guest Conference which took place online for the first time due to coronavirus on January 25 and 26. Note that the conference could only be attended by those who had pre-registered and was not available for attendance by the general public. This ensured that only people from the industry participated in its work.
On the first day of the conference, the first speaker was Jame Lane, AirDNA Vice President of Research. AirDNA is the largest company in the world in terms of short-term lease data, as it collects daily all bookings and prices from more than 10,000,000 properties listed on Airbnb and VRBO.
During his speech, Jame analysed some very important data on short-term leasing in Greece as they emerge from the online platforms of Airbnb and VRBO.
Where does AirDNA get its data from?
As shown in the table below, AirDNA draws its data from individual hosts (35.000 properties), from specialized short-term lease management programs such as PMS and Channel Managers (75.0000 properties) and from data drawn from the Airbnb and VR platforms themselves. (10.000.000 properties).
AirDNA Data Sources
Fall in demand in Europe
According to Jame, the recession that happened in Europe in 2020 in the short-term lease market, has not taken place again in history. In addition to the declining income of travellers and the reduction of travel expenses from people globally, we are also seeing travel restrictions imposed by state governments. Although this has had a detrimental effect on the market, it also means that when restrictions are lifted, travel will once again become the focus of our lives relatively quickly.
According to the chart below, for Airbnb registered listings, the biggest drop was observed in May 2020, with almost 15 million fewer accommodations available on the market compared to May 2019, a decrease of 65%. Respectively, in July 2020 the second-largest decrease took place, 12 million accommodations less compared to July 2019, a decrease of 37%. Finally, in December 2020, which is the most recent data, the corresponding decrease was 54% with 10 million fewer accommodations than the corresponding month in 2019.
How Europe was affected altogether in 2020 compared to 2019
Average demand in Europe fell by 42% overall. In Greece, demand fell by 49.3% with similar rates of decline in the United Kingdom (47.2%), Spain (47.4%) and Italy (50.8%)
Better performance in Europe (compared to other countries) was observed in Switzerland with a decrease of 28.4%, Germany with 29.4%, Poland with 31.4% and Belgium with 31.7%.
The following graph shows in detail the performance of each European country.
The performance of Greece
Greece did a little better than other countries from May to June since it had fewer cases compared to other European countries. As shown in the graph below, it is currently in the last place compared to other countries, due to the increase in cases in the country since November.
What was the worst month in Greece in 2020?
In Greece, during January and February 2020 we witness an increase in demand of 20 to 30%. From March we see a drop in demand at winter levels. At the same time, we are seeing the usual increase during the summer, culminating in the approximately 250.000 accommodations rented per week which are 5 times higher compared to March and April. At the same time, it is 60% lower compared to the corresponding summer period of 2019, with a further decrease from November when there was an increase in cases in the country, recording a decrease of 75% by December 2020.
Greece 2020 – A year to forget
Compared to other countries, in Greece, there was not much reduction in the availability of listings. Looking at the graph below it is obvious that all indicators are negative compared to 2020.
- The number of available entire place listings from 82.138 in 2019 decreased to 72.591, recording a decrease of 11.6%
- The number of booked entire place listings decreased from 52.235 in 2019 to 37.355 in 2020, a decrease of 28.5%
- The number of nights available from 16.6 million in 2019 decreased to 11.6 million in 2020, a drop of 30%
- The number of overnight bookings also decreased from 8.3 million in 2020 to 4.2 million in 2019, down 49.3%
- Occupancy also decreased from 49.9% in 2019 to 36.1% in 2020, a decrease of 27.7%
- The average daily rate decreased from € 119.24 in 2019 to € 111.29 in 2020, falling by 6.7%
- Income per property (RevPAR) decreased from € 59.55 in 2019 to € 40.22 in 2020 a decrease of 32.5%
Monthly offer of listings
The total number of listings on offer in Greece according to the corresponding index in the graph (Airbnb & VRBO) shows an increasing trend compared to 2019. So, now there are more listings on Airbnb than ever which are mostly active having at least one reservation.
Also, looking at the graph we observe the seasonality of the market in Greece with an increase in summer and a corresponding decrease in winter. Compared to 2019 there is a general reduction of 10 to 20% where however the specific listings were not completely removed from the platform but were not available for rent providing the indication for a dynamic recovery as soon as demand returns.
Total income per host
Compared to other countries, in Greece small hosts dominate the market (about 32%) but at the same time hosts with many listings (over 20) have managed to increase their income rate in the last five years from 14% in 2016 to 21% of the total income generated in Greece in 2020. Over 60% of the total income is generated by hosts who manage from 1 to 5 accommodations. Their performance in terms of occupancy is also very good.
We also notice how important the score is specifically in cleanliness. Compared to previous years where this factor was important, especially in 2020, the said factor led to an increase of up to 20% in the occupancy of listings that received 5 stars in cleanliness compared to listings that received 1 to 3 stars. This shows how important cleanliness has become. Looking at the graph below shows how important this factor is in April and October and November respectively.
Impact of COVID-19 on the type of listings
Less impact due to COVID-19 was experienced in specialty listings such as farms (-40% reduction), tents (-20% reduction), tree houses (-22%), which shows us the need for people to move out of big cities. In contrast, listings such as boats, castles and islands had the largest drop with 74% and 55% respectively.
The short-term lease market in Greece for 2020
Due to the pandemic, no market in Greece showed a positive sign in 2020. More specifically, Corfu had a fall of 29.2%, Thessaloniki 25.8%, Halkidiki fell by 42%, Lefkada 39.2%, Cephalonia 31.3 %, Zakynthos 23.4% while Paros and Tinos 31.4% and 25% respectively.
The smallest drop was recorded in the Saronic Gulf region with 9.3% and Kalamata with 15.5%, showing the corresponding tendency of travellers for easily accessible seaside destinations by road, offering a sense of safety and convenience at the same time.
What happened to the 4 largest markets in Greece in 2020
Even in the 4 largest markets of the country, such as Athens (-37%), Crete (-25.7%), Mykonos (-40.9%) and Santorini (-33.2%) all indicators are negative. The only positive indicator presented in the table below, is the Average Daily Rate in Crete, with an increase of 1.9% which resulted from the change in the type of listings that guests stayed, staying in larger (and therefore more expensive) listings compared to smaller listings.
On average, occupancy was reduced by 30%, prices reduced by 10 to 15% and demand reduced by 50%. Finally, supply decreased by an average of 12 to 20%.
Which countries did the tourists come from?
By recording the reviews that were made in the listings of Athens, seeing the graph below we witness from which countries the travellers came. The Americans occupy the first place for the period 2017 – 2019. For 2020, the Greeks appear first on the list for the first time, confirming the trend of domestic tourism worldwide due to the pandemic and the corresponding travel restrictions. At the same time, the British occupy the second place in all the listed years, while the French for 2017, 2018 and 2020 occupy the third place. Finally, Spain enters the list for the first time in the fifth place for 2020.
According to AirDNA data, Americans book more days compared to guests from other countries with the ability to work remotely and combine vacation with work. Therefore, we observe phenomena where they book a listing for one month instead of two weeks, wherein the one month, the two weeks they take a vacation and the other two, they work remotely from the listing they have rented. In these cases, potential guests are looking for larger listings with more than one bedroom, equipped with a desk and kitchen so that they can cook from home.
Also, listings that are located outside of big cities and offer unique experiences are sought after even if they cost more.
The priorities of travellers that make a difference
There is a difference in the priorities of the guests regarding the listings they will choose due to COVID-19.
Before COVID-19 the most important factors were price, location, and the final product. They now rely more on safety, cleanliness and travel restrictions combined with price, location, and the final product.
Forecast for 2021
Looking to the future, the coming months to May are not good in terms of demand, but in the summer months (June, July) the demand is much higher than the corresponding months of 2020 showing that people are already booking for the summer. Undeniably, vaccinations as well as local tourism will play a big role. International flights are expected to be 40% lower compared to 2019 during the touristic season of 2021. It is certainly a much better percentage than the 5% of 2020 but speaking on a realistic basis we will not return to a regularity of travel before the summer of 2023 or 2024 provided that the entire world population has been vaccinated.
Finally, it was mentioned that reduced listing prices would not be the factor that will make a difference, because the issue is that many people do not travel not because they do not have the money but because it is not allowed due to the pandemic.
One thing to keep in mind is the fact that many guests who stayed in a listing for 4 to 5 days now stay for 8 to 10 days. That is, where they used to go somewhere for a weekend, they now stay for a week combining holidays with work, with the requirement for strong and fast Wi-Fi and a comfortable workplace (office and chair).
As the second speaker during the conference, Thibault Masson – Program Manager Hospitality of Booking.com spoke and targeted the Greek market Short-term Rentals & Villas, with useful exclusive data stating that Booking.com currently has over 7,000,000 listings from short-term rental accommodation.
In his speech, he presented some slides analysing various trends and factors.
To begin with, he made a special reference to young travellers where he stated the following:
- 53% of travellers have a heightened desire to see even more of the world
- 42% want to travel more in the near future to make up for lost time
- 61% are even more appreciative of travel than before the pandemic
- Factors such as the Wi-Fi speed and the promotion of the listing on social media (Instagram-friendly) are very important
Following the presentation, he analysed the factors that travellers consider to be the most important.
- 68% of global travellers expect travel companies to support their future travel plans via promotions. This means that for long stays it is good to have the corresponding discounts
- 62% are more price-conscious when it comes to planning a trip
Familiarists not tourists
- 50% of global travellers intend to travel somewhere they’ve already been previously for its familiarity
- 43% plan to explore a new destination within their home region or country
- 38% of respondents look at potential travel destinations as often as once a week
- 36% turn to chatting with friends and family to spark their travel creativity
- If you are a property owner, make sure you are active on social media, updating your photos and your listing
Safety Cleans Up
A very important factor for travellers is the cleanliness of a listing.
- 75% of travellers favour places with antibacterial and sanitizing products
- 70% of travellers will only book a particular accommodation if it is clear what health and hygiene policies it has in place
Travellers expect hosts to offer more sustainable solutions/ways to their accommodations.
- 53% of travellers want to travel more sustainably in the future
- 69% of travellers expect the travel industry to offer more sustainable and environmentally friendly travel options
- Bye bye 9 to 5
- 37% of travellers reveal they have already considered booking somewhere to stay in order to work from a different destination
- 40% are willing to quarantine if they could work remotely
- 52% would take the opportunity to extend any business trips to also enjoy leisure time at the destination
- 69% of travellers will look to appreciate more simple experiences such as spending time outdoors or with the family while on vacation
- Focus on family
- 56% will seek out more rural off-the-beaten-track experiences
- 63% of travellers say that accommodations will need to use the latest technologies to make them feel safe
- 55% are excited about tech’s potential to further personalize their future travel experiences
European Holiday Homes Association (EHHA)
After the Booking.com presentation, the 3rd BnB Greece Conference held the European Summit for the market of Short-term Rentals & Villas, with the aim of analysing the effects of the crisis and the new data in the European tourism market.
The discussion was attended by Carlos Villaro Lassen, Secretary General of the European Holiday Homes Association (EHHA), where he presented EHHA’s actions to EU institutions and the possibilities of connecting institutions and companies, Eduardo Miranda, President of the Association of Local Accommodations of Portugal ( ALEP), where they presented their actions in this Mediterranean country that has many similar characteristics to Greece and finally, Tomer Rosenblum, Director of Sales for EMEA of Guesty, where he presented the tools used by real estate managers with a view to the future.
What was discussed is as follows:
- Europe has a total of 4 million accommodations
- 2020 was a difficult year worldwide. More specifically in Europe, Northern Europe performed better compared to Southern Europe where there were significant losses
- In big cities like Paris, London, Madrid, and Berlin the traffic was zero
- In coastal areas with private villas, the traffic was much better
- The European market has been hit hard but seems to be resilient and everyone is hoping for the market to reopen on Easter
- Vaccination is necessary for the population to gain immunity and restore confidence to resume travel. In many countries, the vaccination of the population will be completed in one year. This means that many destinations will not be ready for travellers
- We need to prepare for a slow and gradual growth for some destinations in 2021
- People are generally eager again to travel due to lockdowns
- The length of stay is now a very important factor
- Short term rental accommodation is the ideal solution this year compared to hotels due to the facilities and cleanliness they offer while at the same time they are more private and more remote
- Property managers must be very flexible and able to adapt at any time and see the situation on a monthly basis while at the same time it is good to advertise on as many channels and platforms as possible
- Flexibility does not mean lower prices, and this depends on the available public (international or local customers) not to disrupt the market
- All platforms recommend full flexibility in the cancellation policy, but this can lead to problems especially in large accommodations which will not be able to make up for a last minute cancellation. Being flexible does not necessarily mean cancellation but postponement so that if something happens there is a possibility to change the dates and not in the slightest to have cancellations due to the organization and planning of accommodation
- Listings can take advantage of off-platform sales channels to avoid platforms as well as increase their visibility to a wider audience
- The use of technology such as Channel Managers are very useful tools (especially with the pandemic) to be able to take advantage of all the opportunities presented in the market as well as to automate many processes
- Travellers slowly abandon traditional hotels. This is evident from last year, when many people who had never rented a short-term rental before, chose this type of accommodation for their vacation
- In 2019, 70% of Europeans had never stayed in short-term rental7