Short-Term Rental to an Extended Stay – A Closer Look

Here at Property Providers, we’ve seen a significant shift in the rental market over the last 12 months. The most noticeable trend is that guests need to change their short-term rental to an extended stay. To understand why this is happening, it is important to gauge the nature of the bookings being taken.

The four types of guests booking our temporary accommodation are:

1. A local renovator requires a place to stay until their renovation is done and their home is ready to move back into.
2. Recent sellers have sold their homes but have yet to find a new property to buy.
3. Homeowners or tenants who have an insurance claim on their property and require lodging until repairs are completed.
4. Corporate relocations: Where executives are being moved to Sydney for work purposes and want to get a feel of the area before committing to a long-term lease.

All of the above situations have one thing in common: the client usually needs to extend their short-term furnished apartment for a long time. For example, we all know renovations and builds can sometimes go on for months longer than their expected completion date. In the same respect, the sale market is extremely competitive right now, so clients expecting to purchase within a month of looking are finding this much more challenging than they expected.

Booking extension statistics

Below are some high-level booking extension statistics we’ve delivered over the last year:

• 75% of all bookings extend their stay.
• 85% of guests who originally booked for more than 30 nights extended their stay.
• The average extension period is 30 nights.
• The average extension value is $5,000.
• 50% of people who extend are willing to pay an increased rate to remain in the property.
• 10% of extension periods exceed the length of the original booking.
• Guests with pets are 40% more likely to extend than those without.
• 60% of guests have pets.

Having knowledge about extensions is vital for property owners during the decision-making process of accepting a booking. Based on the figures above, landlords would be encouraged to be open-minded when presented with bookings that are longer in nature but potentially lower in rate. When these opportunities come up, we need to look at the bigger picture. Having this statistical knowledge will help clients make the best decision to get the most out of their property in terms of occupancy and return.

From the guest’s perspective, it can be difficult to predict exactly how long a rental property will be required. However, if they find themselves in any of the above 4 situations, our suggestion is to seek the advice of the booking agent.

Property Providers may be in a position to encourage a longer commitment and, in return, a more competitive rate for the property. We have enjoyed seeing the short-term rental space evolve and remodel itself as the market has demanded flexibility.

Both our guests and our landlords have benefited from these changes, and it has been interesting to understand the positive effects a health pandemic has had on the extension model within our business.

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