It’s been over a year since the last lockdown ended and the effects on the way we work, live and play are still evolving. One thing seems clear and that is that flexible living isn’t going anywhere.
Remote working has become a key part of many people’s lives, with the opportunity of being able to work from anywhere increasing for so many people. According to reports, 38 % of workers aged between 30 and 49 are now empowered (or able) to work from home or remotely as of February 2022.
With changing work patterns, home working and a blurring of work and leisure, workers are less tied to living in one location. Instead, a trend is pointing toward renters moving around and staying in flexible accommodation in the form of short-term rentals with fast and reliable internet connections. This has led to an explosion of demand for short-term rentals with home-from-home features such as a kitchen, a living & workspace with a desk and comfortable, design-led interiors. With a predicted rise of 20.5% in the number of short-term rentals listed in 2022, there is a shortfall of properties to meet demand. A number of property owners and developers have spotted a gap in the market, can see that the landscape has shifted and are now re-thinking the kind of properties they develop, design and build.
How property developers are adapting in response to flex living
According to insight from Skift’s latest report - ‘The Great Merging in the Hotel and Rental Tech Sectors, July 2022, ‘The differences between hotels and rentals are blurring to the traveller, as rentals are professionalising and hotels move into the rental space. Meanwhile, short-term rental providers are looking to offer branding and hotel-like services in the rental space, encroaching on hotels.’
Build-to-rent is a good solution, creating hotel-like self-catering properties that are ideal for longer stays. The number of build-to-rent developments is up 26% from 2020 compared to 2021 leading to a post-pandemic boom in the build-to-rent sector. Many developers are adapting in response to flex living, creating flexible hotel-style accommodation with cooking facilities and home comforts. These apartments can be handed over to property management companies who take care of the day-to-day operations.
One investment opportunity is refurbishment projects of old buildings that may have been converted to office or commercial use but is now “distressed’ due to lower “workplace” occupancy. These provide innovative opportunities to be repurposed, not just for medium and long-term lets but also for short-term rental opportunities. With many old buildings being based in city-centres, residents’ desires for central locations are met.
Developers adding flex living to their portfolio
As an independent investor in a flex living refurbishment project in Manchester, which will form part of Jetstream’s operations, we are directly responding to this need for flexible accommodation. High Street Townhouse, due to open in October 2022, is a 19-unit apart-hotel. Built in 1897 and originally a millinery warehouse, it has been transformed into large and spacious apartments aimed for guests ideally staying for 3-30 days. However, the beauty of the flexible nature of these apartments means they are also suitable for the mid and long-stay market so can be adapted as necessary in response to market trends. The tech, tools and services available allow property owners to flex their rentals.
It is interesting working out how to take on a project like this. The cost of buying a building was prohibitive so a master lease (investor takes risk of committing to lease payment over a number of years) seemed like the best option. As a business owner specialising in successfully marketing short-term rentals on multiple online platforms for our clients, it wasn’t a daunting prospect, especially as we understand how to tackle those issues.
Marketing technology that meets the needs of digital nomads & property owners
When moving into short-term rentals, there are a number of challenges which put owners and developers off. Marketing properties for short-term stays can feel overwhelming if you’re not experienced in this area. Used to having medium or long-term occupancy, owners/operators need to adjust to filling short-term bookings. For example, one issue is distributing their rental properties across multiple short-term rental channels, ensuring that booking systems match up and don’t lead to double-bookings.
Another key area is ensuring the property listings are optimised with captivating content that resonates with short-term rental consumers so they convert from ‘lookers’ into ‘bookers’. Plus providing professional 24 / 7 guest-facing support is crucial to delivering the very best guest experience with responsive and speedy communication.
Renters in 2022 are increasingly demanding “seamless” tech-driven solutions in their rentals. Other technology examples include keyless entry and remote access allowing customers to check in and out from their smartphones. This is a fantastic feature leading to operational savings as on-site staff are no longer needed. Guests can enjoy quick and hassle-free check-in. Super fast broadband is a must-have too and is a key requirement for renters, many requesting a screenshot of Wifi speeds before booking. Digital concierge and 24/7 customer service are also popular features.
The future of flex living
The pandemic has pushed the belief that mixed usage is the future of real estate. Developers, that pre-Covid were just converting office spaces to small hotel rooms, are probably realizing now that it would have been better to have hotel rooms, studios, and one and two-bedroom units with kitchens and living rooms. I think we're going to see a lot of repurposing where that is commercially possible.
The trend for flex living and working is here to stay. The whole landscape has changed dramatically. Only by property owners and developers flexing too will they future-proof their business by pivoting in response to guests’ needs. Creating properties for multiple uses, for different lengths of stay, for different guests' needs and considering community-style/multifamily options will be important to adapt to the ever-changing needs of guests.
Introducing tech solutions, allowing experts to step in and deliver marketing solutions, security solutions and operation management will yield results in terms of revenue. It’s a brave new world, where being flexible and adaptable needs to be the overriding business mindset.