Urban vacation rentals have quickly carved a place in the short-term rental market, driven by the phenomenal rise in demand for private accommodations over the last five years and the emerging wave of millennial travelers — and savvy property managers are modernizing their operations to meet new expectations. Sites like Airbnb and Booking.com have played a significant role in bringing short-term rentals to the public, but the emergence of a crucial category of customers: the millennial traveler, is a significant element driving this vacation rental sector trend. This is how millennials are influencing the vacation rental market in 2019 and what this implies for you as owner of villas and vacation rentals in Bali.
Millennials Shapes Today’s Market of Luxury Villas in Bali
Millennials, who will reach 25 to 40 in 2022, are driving numerous real estate market changes, including those in the vacation rental sector. This generation is spending more money on travel, vacations, and lodging. According to research, millennials would prefer spend their money on travel than on a home. This opens up financial options for anybody considering purchasing a rental property, and millennials are the demographic to target if you’re investing in short-term rentals.
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Younger Demographics Put More Interest on Vacation Rental than Hotels in Bali
Reflecting on travel trend during 2018 – 2021, it’s clear that the younger generations (aged 24 and below) quickly follow the path of their older brother and sisters. Data shows that 70% of rental tourists in the United States alone are under the age of 44: they’re reasonably rich, spend and travel more than other demographic groups. They prefer to connect with their hosts, and emphasize experiences and culture above relaxing. A reason why they will look more on private, unique Bali villas than all-inclusive hotels if they take a vacation to Bali.
Why Millennials Would Prefer Private Villas over Hotel While Vacationing in Bali
There are a number of reasons why millennials choose vacation rentals than hotel accommodations. Apart from being less expensive than hotel rooms, rental apartments provide millennials with access to a variety of facilities such as a kitchen and a private pool. Because millennials are always looking for new experiences, living in villas allows them to immerse themselves in the local culture. This is something that’s totally different from the Gen X and Baby Boomer generations. The previous generations tend to choose resorts over some secluded and unique villa with genuine local experiences.
Millennials Have the Money and More Budget Spent on Leisure
Furthermore, as more millennials enter the labor force and acquire disposable cash, studies indicate that they are more inclined to spend it on travel and vacation. If you’re a real estate investor looking to buy a vacation home rental property, we recommend investing in the top millennial travel destinations. Your Bali vacation rental property will have a high occupancy rate in these areas, generating a respectable rental income for a solid ROI.
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Travelling is on the Need for Millennials and Younger Gens
Millennials, closely followed by Generation Z (aged 18 to 23), are more motivated to travel than any previous generation. Home ownership is out of reach for many people, but flying travel is very affordable. Many people haven’t started families yet, and information about unusual locations spreads quickly. They want to go on an adventure, and that desire takes precedence over nearly every other budget line.
Millennials also travel for work more than previous generations, and they are at ease blending business and pleasure. Over the last two years, more than half of those trips have been extended to include personal vacation time, and many continue to work while overseas.
Are you ready to accommodate the millennials and soon-to-be-adult Gen X to your vacation rental Bali?