According to Forbes, short term rentals have a significant role to play in reducing the environmental impact of the travel industry (which currently accounts for 8-11% of global emissions). This may be why new initiatives, such as the Global Short-Term Rental Sustainability Research Project, have been recently introduced to encourage more eco-friendly practices within the sector.
While it may seem daunting for those not already using sustainable practices to change their short term rental business strategy, offering eco-friendly accommodation options has a whole host of benefits for property managers and investors.
What Is The Demand for Sustainable Short Term Rentals?
Demand for sustainable travel is at an all-time high. Spurred on by climate change concerns, over 72% of global travelers have expressed wanting to travel more sustainably in the months ahead (this figure is up 10% since 2021). What’s more, 7 in 10 global travelers say they’re more likely to choose sustainable accommodation even when they’re not specifically searching for an eco-property. This demand suggests there’s a great opportunity for property managers and investors to increase rental appeal and, therefore, occupancy, enabling them to maximize business revenue.
Top Sustainable Short Term Rental Destinations
What does the sustainable short term rental scene already look like? According to our comprehensive market analysis of destination data, the countries with the highest number of sustainable Airbnb properties (based on title keywords including “eco-friendly”, “sustainable”, and “solar power”) are
- The United States
In the U.S., New York City, Sacramento, and Tuscon take the top spots for the eco-friendly cities with the most sustainable Airbnb listings. Internationally, the cities and regions with the highest number of eco-rentals are Melbourne and Byron Bay, Australia; Tulum, Mexico; Amsterdam, Netherlands; and Bali, Indonesia.
For property managers and investors looking to increase their eco-initiatives, and appeal to the increasing demand for sustainable accommodation options among travelers, there may be greater opportunity in cities with less supply. Booking.com research reveals that over a third of travelers feel it’s difficult to find sustainable options in cities and locations with popular tourist destinations, showing a potentially lucrative gap in the market for new sustainable short term rental properties.
What Types of Properties Are Currently Available for Sustainable Travelers?
Available sustainable rentals on Airbnb are most commonly single-family homes and private rooms. Our research highlighted a lack of eco-friendly options in other property types including apartments and townhomes. There may be an opportunity here for those scaling their short term rental portfolios to be the first to offer sustainable travelers different accommodation options.
Is Sustainable Tourism Affecting Seasonality?
Sustainable travelers often choose to avoid peak seasons and overcrowded tourist locations. Instead, they’re more likely to travel during quieter periods. This is largely due to a desire to lower the impact of traveling on popular destinations and to better disperse travel income to benefit local economies. This, once again, provides property managers and investors with a chance to expand their revenue potential by increasing occupancy during the off-season.
Why Invest in Sustainable Short Term Rentals
It seems that the current supply of sustainable properties is failing to meet demand. People want to travel sustainably in 2023 — so why not make the most of this? Investors and property managers can take advantage of the supply shortage by purchasing new, or converting current, rentals and implementing sustainable practices.
Not only will there be higher demand for such an investment, and improved occupancy rates in your properties, but implementing certain practices, such as installing smart home tech for energy efficiency, can also save you money long-term.
But what’s the ROI, you ask? According to Bob Garner, owner of Casal dei Fichi, a farmhouse in the Italian countryside lovingly converted into six eco apartments, he witnesses a 60% return rate largely due to the sustainable practices he’s put in place. He told Touch Stay on a recent webinar that sustainability is a “virtuous circle” as it earns his business positive reviews, good press coverage, and awards.
Key Data research highlights that there’s ample opportunity for real estate investors and property managers in the short term rental space to maximize revenue by appealing to the large demand for sustainable properties. Now is the perfect time to invest in sustainability.
Ready to take that next step? Check out our guide for Airbnb investing or get in touch today to see how we can support your business with our reliable short term rental data.