2 days ago
Short-Term Rentals Could Benefit as Extreme Weather Disrupts Travel
Extreme weather isn't just a future concern, it's already driving demand for rentals. But costs are rising too.
As temperatures climb and extreme-weather events become more frequent, the travel industry could see big shifts. One possible winner: short-term rentals, according to Marcus Räder, CEO and co-founder of travel tech firm Hostaway, who spoke with Skift's climate podcast, Greenshift.
Räder pointed to the Covid-19 pandemic as an early preview of what the future might hold. According to Räder, short-term rentals saw demand spikes during the pandemic, especially in rural and nature-based destinations and he believes that trend will only accelerate as climate impacts increase.
'People could travel in a nice way locally. You drive nearby to get to a nice cottage by the mountain or close to a lake,' Räder said. 'What's going to happen due to climate change is that vacation rentals are going to become more exclusive and expensive. Increased extreme weather will make it harder to travel.'
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The Hostaway founding team (L-R) Saber Kordestanchi, Marcus Rader and Mikko Nurminen.
Extreme weather isn't just a future concern, it's already having measurable effects on rental patterns.
'When there's an extreme weather event, the rental market spikes in the area because there is more demand. Lots of rooms get taken up through things like insurance companies paying people to come and repair an area that has been affected by extreme weather,' Räder said.
That increased demand leads to higher prices, even in destinations that have just experienced disruptions. And this dynamic, he said, is likely to repeat more often.
'There will still be that want or need to stay there from tourists and travelers. The prices go up. We can expect more of this in the future.'
Short-Term Rentals Face Rising Costs, But So Far, Guests Are Paying
Beyond demand shocks, other costs are also on the rise. Räder noted increasing utility bills, particularly for air conditioning and the potential for climate-related taxes to put more pressure on operators.
Still, travelers seem willing to absorb those costs, at least for now.
'People are willing to pay higher costs. Our data for the summer shows that this year in popular tourism markets, we're looking at higher occupancy rates and at a higher price than previous years,' he said.
A Fragmented Industry Without a Climate Roadmap
Unlike aviation or cruise lines, the short-term rental industry lacks a centralized body to coordinate climate strategy. Räder sees this as a challenge, but also an opportunity.
'We as an industry are still so young and it moves so fast. It's going to take many years. It's still very fragmented. For planes, it took decades to align and reach a standard.'
Still, he acknowledged that some major players, including Airbnb, and Vrbo, have begun setting emissions goals and climate targets. The question now is whether the broader industry can catch up.
Skift's in-depth reporting on climate issues is made possible through the financial support of Intrepid Travel. This backing allows Skift to bring you high-quality journalism on one of the most important topics facing our planet today. Intrepid is not involved in any decisions made by Skift's editorial team.
