As “safer at home” social distancing gave way to the need to experience life outside one’s own four walls, RVs and travel trailers saw a huge spike in summer and fall rentals. Should short-term rental investors be worried by the public’s sudden interest in taking a travel trailer vacation versus a vacation home stay?

My answer, to put it succinctly, is yes.

Fire, pandemic, recession — take your pick of concerns

A surge in popularity for RV and trailer rentals indicates the current desire for self-contained vacations that don’t require mingling with other folks — much less sharing the same air. But to go a bit further, STR investors need to be worried about the financial health of their rental properties for many reasons. Absolutely, the heightened-to-a-frenzy focus on “staying safe and sanitized” is one reason. But it’s not the only one. The ferocity and widespread scope of this year’s fire season actually has more potential for lasting harm in affected areas. And with a record number of jobs lost, fewer people can afford vacation rentals right now.

The real challenge = community pushback

But the backlash against VRBO and Airbnb in many cities and vacation hot spots was a foreshadowing of a shaky future for STRs. Neighborhood community groups and city authorities in many popular vacation spots have been down on short-term rentals for a few years, and Covid-19 provided a way for them to demand the STR industry be temporarily halted. Some communities are now demanding that if it comes back, much stricter regulations should prevail.

With so many factors against STRs, many people had already returned their allegiance to hotels. However, hotels and vacation rentals share some of the same potentially risky characteristics (guest amenities, central air conditioning, elevators and stairwells where people don’t wear masks in close quarters). And travelers see the same potential risks in both lodging categories. So, STR owners and hoteliers are no longer each other’s biggest threat. Now, the most in-demand digs are niche lodging options that held zero appeal to most demographics pre-pandemic: RVs. Rustic cabins. Actual tent camping.

Looking to the future…

So, what’s the possible light at the end of the tunnel for short-term rental owners? There may be two sources. First, there’s a need for housing in many vacation rental hot spots, so even if an investor can’t earn the more substantial profits generated by a booked-out STR property, they can still rent a nice home out for longer-term stays at luxury rental home prices.

And second, for those who want to stay in the STR market, there will most likely be an eventual shift back to renting vacation homes by those who preferred them before. Once the novelty wears off, many who tried camping or the cramped and quirky quarters of an RV will likely decide that an STR’s comparative spaciousness and comfort is worth the risk. Meanwhile, many who tried staying in hotels that no longer offer restaurants or housekeeping service may opt for a sanitized, thoughtfully outfitted vacation rental when booking their next family vacation. It’s just a matter of when…and whether overextended investors can wait that long.

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