The Next Battleground in Short-Term Rentals: Amenities

Skift Take

Short-term rental hosts are increasingly relying on amenities – like pools, hot tubs and mini golf – to make their listings stand out from the competition, and some say the end result is an “amenities arms race.”

James Farrell

Some say a new form of “keeping up with the Joneses” is changing the short-term rental game. 

With an increasing number of hosts offering a ballooning number of listings, the pressure to stand out to attract guests is more intense than ever. And for many hosts and property owners, the answer is to invest in more amenities, according to Mark Lumpkin, owner of STR Cribs, a company that outfits short-term rental properties with high-end amenities.

“You used to be able to grab a three-bedroom, two-bath, throw an air mattress and a hot plate in it, throw it up on Airbnb and make a bunch of money,” Lumpkin told Skift. Now, guests “want that property to be part of their experience, it’s not just a place to rest their head.”

The result, in Lumpkin’s words, is an “amenities arms race” – an ever-growing battle for guests that’s resulted in more and more listings boasting an array of amenities, as simple as full-length mirrors in bedrooms and as luxurious as hot tubs and golf simulators.

New Traveler Expectations

The post-pandemic travel boom has changed traveler expectations of lodgings, says David Krauss, co-founder and CEO of Rent Responsibly, an advocacy group for short-term rental hosts. Krauss calls it a “revenge travel” generation, with cooped-up travelers seeking stunning, brag-worthy vacations at “travel thirst-trap” locales tailor-made for social media. 

“It’s no longer an ‘if you list it, they will come’ industry by any means,” Krauss told Skift. “You need to create an experience.”

The Amenity Premium

Hosts are feeling new pressure to understand their target audience, what amenities that audience expects and what amenities would exceed their expectations, Krauss said.

“That’s the maturity level that we’re seeing hosts have to level up to,” Krauss said. “If you don’t have the interest in investing in your property, or perhaps the economics just aren’t working, there’s actually a little bit of a flight as a result of people who aren’t keeping up with the times and keeping up with the Joneses.”

Hosts and owners willing to invest in developing properties with high-end amenities are likely to see benefits. A March analysis from AirDNA found that listings with pools and hot tubs had higher revenues and occupancy rates than listings without them. Luxury and upscale listings with those amenities saw more pronounced revenue benefits than budget or economy listings, suggesting guests in the higher-end market expect and are willing to pay for top-notch lodgings.

In a data case study provided by Lumpkin and assembled by the group STR Search, two highly amenitized five-bedroom properties in Bradenton, Florida featuring pickleball, mini-golf and other resort-style amenities each brought in more than $170,000 in revenue last year against the market average of $117,616. Two other five-bedroom listings in that market that listed fewer amenities both brought in less revenue than the average – around $100,000.

The Wow Factor

The push for more amenities might be driven in part by the types of guests hosts are trying to appeal to. Families and “wellness or adventure travelers” were listed as the top two largest target audiences that hosts are marketing to, according to Rent Responsibly’s latest survey of short-term rental hosts. And both of those groups tend to expect high-quality amenities – with families seeking on-site activities and themes for kids and wellness travelers seeking fitness options, meditation rooms or lodgings with a social media wow-factor, Krauss noted.

It all stands to potentially make it harder for smaller operators to compete without finding a niche and understanding what appeals to that niche, Lumpkin and Krauss said. 

But Caitlin Johnston and Stefanie Medd, co-founders of Host & Stay, a firm that helps hosts optimize their short-term rental listings, caution that amenities are only part of the equation.

“Ultimately, the quality of the stay and the host’s genuine care for their guests’ experience often outweigh the importance of having the trendiest amenities,” they said in a joint email statement to Skift.

Build a Solid Business First

Johnston and Medd said they have noticed the hosts they work with increasingly investing in amenities. But they said that this investment typically only comes after a host has already established a solid business and has capital to reinvest in the property. And while amenities can help listings jump off the screen in platforms like Airbnb and Vrbo, they’re most effective when paired with other strategies.

“They work best when combined with other key elements such as guest experience, high-quality visuals (including high-resolution and relevant images), effective communication with guests, positive reviews and competitive pricing,” they said.

However, they noted that keeping up with the latest trends in amenities is more important in highly saturated markets, where the competition for guests is intense.

Take Orlando, where family oriented short-term rentals are a dime a dozen due to the proximity to Disney World. Hosts that fail to keep up with the “amenities arms race” could face an uphill battle there, Lumpkin argued. Lumpkin says it creates a need for “checkbox amenities” – things you need at a minimum to compete in a given market – and “stand-out amenities” – things you need to win. 

“If you want to open a house in Orlando, your checkbox amenity is that it’s Disney-themed or that it has a really cool unique theme, because everyone else has that,” Lumpkin said. “But your stand-out amenity might be, ‘we’ve got really cool custom built-in bunk beds with slides and arcade games and the other homes in this market don’t have that.’”