The Predictive Daily #12524

THURSDAY TREND
Turning stays in stories

The way people travel is changing. More than ever, travelers are booking their lodging not just for a place to sleep but as a part of a bigger picture—a concert they’ve been waiting months to see, a championship game they can’t miss, or a family filled day at a theme park. In fact, one-third of travel industry leaders now believe that travelers are booking there lodging to align with their experience.

It’s no surprise, then, that the travel experiences market has hit a mind-blowing $1 trillion worldwide. Experiences aren’t just add-ons anymore—they’re driving the decisions. For STR investors, this is a golden opportunity to step up and meet the moment. Here’s how:

Highlight the Experiences Your Guests Are After

Take a fresh look at your property’s marketing. Does it shout about the events, attractions, or activities nearby? Whether you’re near a music venue or a serene hiking trail, make sure your listings paint the picture of what guests want to enjoy while staying with you.

Tap Into Their Excitement

People book based on emotion—whether it’s the thrill of a live concert or the joy of a family outing. Your marketing should do more than inform; it should inspire. Use images, videos, and descriptions that make guests feel like they’re part of the action they are after.

Offer Perks That Sweeten the Deal

Partner with local businesses or marketing pros to provide your guests with exclusive discounts—like cheaper tickets, special deals on local attractions, or meal vouchers. It’s a small touch that can make a big difference in how your property stands out.

Today’s travelers want more than a place to stay—they want to create stories they’ll tell for years. By connecting your property to the experiences that matter most, you’re not just offering a booking; you’re offering a gateway to memories that will justify the price.

COMMUNITY BENEFITS
The Predictive Partners & Opportunities

• 🌄 Ready to buy or sell in the Smokies? Tired of analyzing and ready to get to action? Get connected agents who understand STR investing today!

• 🛏️ STR Furniture from top suppliers. In need of new furniture? Work with our design partner to access commercial grade STR furniture near wholesale rates.

WEDNESDAY TREND
STR Management: Tools you need to keep up with hospitality trends

Fewer Tools & More Efficiency

Managing short-term rentals (STRs) doesn’t mean juggling endless software subscriptions. The trick is finding tools that multitask, cutting costs and complexity while keeping your operation smooth.

Start with a Robust PMS

Your Property Management System (PMS) should be the centerpiece of your tech stack. Tools like Guesty and Hostaway combine booking management, calendar syncing, guest communication, and financial reporting in one platform. Some even include dynamic pricing and housekeeping management, reducing your need for additional tools.

Why It Works: A strong PMS can replace channel managers, messaging apps, and pricing tools, making it a one-stop shop for small-to-medium portfolios. Lodgify offers a budget-friendly option with direct booking capabilities.

Focus on Tools That Multitask

Dynamic pricing tools like PriceLabs are great but often redundant if your PMS includes pricing optimization. Similarly, dedicated housekeeping apps like Turno or Breezeway may be unnecessary if your PMS handles task management.

Smart Move: Use your PMS’s built-in features whenever possible. Pair it with smart home devices like NoiseAware and August Smart Locks for guest access and noise monitoring.

Use Add-Ons Strategically

Market analytics tools like AirDNA are great for market entry but may not be needed long-term. Similarly, accounting software like QuickBooks might not be essential if your PMS offers basic financial tracking.

My Tech Stack

Admittedly, I’m a bit of a tech nerd, and I’ve learned these lessons the hard way. Today, my tech stack for managing STRs is lean, efficient, and focused. At the heart of my system is Hospitable, my go-to PMS. I chose Hospitable for its outstanding communication features, multi-channel functionality, and seamless integration with PriceLabs. Customer experience and response times are top priorities for me, and Hospitable’s customizable messaging system ensures I can tailor interactions to deliver a personalized guest experience.

The second piece of my stack is PriceLabs, which has long set the standard for dynamic pricing. Its advanced features allow my pricing to adapt not just to market trends but also to everyday quirks in my calendar—like filling that pesky random Wednesday and Thursday during peak season. It’s a game-changer for optimizing revenue.

In the past, I relied on additional software for tasks like maintenance and cleaning. However, modern PMS platforms have significantly improved, consolidating these functions into a single system. This evolution has allowed STR owners, like me, to streamline operations without sacrificing quality or efficiency. The result? A tech stack that’s both powerful and practical.

TUESDAY TREND
Interest rates are they key to housing demand 

6%: The Benchmark for Market Momentum

As we approached the end of Q1 2024, it became clear that the “beginning-of-the-year surge” many anticipated had more to do with the cost of capital than seasonal market trends. At LOCAL Realty Group, we experienced a remarkable shift, clearing a majority of our inventory in just three weeks. But this was followed by a sharp increase in time on market.

What changed? Mortgage rates climbed beyond the critical 6% threshold, and as rates edged higher, we saw a corresponding rise in both inventory levels and time on market. This aligns with data from a recent HousingWire article, which offers further insight into the impact of interest rates on housing activity.

Purchase Applications: A Rate-Driven Rollercoaster

HousingWire highlights a clear trend: mortgage rate fluctuations have a direct impact on buyer activity. When rates rose to 6.75%-7.5%, purchase applications dropped by 14%. Here in the Smokies, inventory levels soared to a 13-month high earlier this year.

However, mid-June brought a welcome change. As mortgage rates began to decline, purchase applications rebounded, increasing by 12%. Inventory levels have since followed suit, experiencing a gradual but steady decline. Currently, inventory stands at 9.5 months—a marked improvement, but there’s still room to stabilize.

What This Means for Smoky Mountain Investors

Interest rates in 2024 had a substantial impact on the Smoky Mountain sales market. The cost of capital increased, time on market has steadily risen, and inventory levels spiked. In the midst of all that, prices held steady. We are just now seeing any noteworthy changes in pricing, and given the recent and projected improvements to the interest rate environment, we expect 2025 to look similar to Q4 2024 in both market trends and data. Honestly, I am fine with this.

MONDAY TREND
Billions are getting invested into the travel industry  

Why This Matters for STR Owners

The economic impact of short-term rentals (STRs) cannot be overstated, and investors have taken notice. The significant flow of capital into the travel industry highlights the growing recognition of STRs as a key driver of economic growth.

STRs Are Boosting Local Economies

One of the most notable contributions of STRs is their ability to revitalize local economies, particularly in areas struggling to generate new revenue streams. In Tennessee, for example, Airbnb began automatically collecting local occupancy taxes in 2024, resulting in substantial financial benefits. Davidson County collected $34 million, while Sevier County brought in $33 million in occupancy taxes. These figures underscore the transformative impact of STRs on local budgets.

This success has also influenced legislation. The State of Tennessee recently passed laws broadening the definitions of eligible STR properties, enabling more properties to enter the market. These changes demonstrate that STRs are here to stay—not just in top tourist destinations, but across the state.

Professionalism and Competition Are Key

The recent surge of investment into the travel sector reflects an increasing demand for higher-quality experiences. For STR operators, this means rising expectations in areas like customer satisfaction, response time, reviews, and overall professionalism. As booking platforms become more competitive, operators must prioritize these metrics to succeed.

For investors, this represents an opportunity, but for STR owners, it’s a wake-up call. The travel industry is evolving rapidly, and so too must the STR market. Operators who fail to adapt risk being left behind in a space that increasingly resembles traditional hospitality businesses in terms of service and expectations.

A Call to Action for STR Owners

The influx of investment into travel and STRs serves as a powerful reminder: STRs are businesses, and successful operators must continue to innovate and improve. By focusing on professional standards and exceptional guest experiences, STR owners can thrive in this dynamic, competitive market.