Impact of Covid-19 on the Asian Villa Rental Market and Trends for 2021: A Case Study


Villas search conducted research on the impact of travel restrictions on the US $ 440 million villa market in Asia and the outlook for the region’s vacation rental industry. The company presents its findings in this guest post.

THE Covid-19 pandemic has strongly impacted the travel industry, and the Asia-Pacific villa market the region is no exception. Closed borders, social distancing, new hygiene standards and general uncertainty about travel safety are some of the changes that have taken place in the market over the past year. In this article, we share more about how the pandemic has affected the APAC villa rental market, how villa owners have dealt with it and also what the future of villa rentals will look like.

The APAC villa rental market in 2021

Due to the total halt in travel, the overall Asia-Pacific market shrank by 38% in 2021. The market size has grown from US $ 440 million to US $ 271 million in 2019. We see a downward trend in villa supply, occupancy and average rate in all markets with the exception of a few exceptions where there has been an increase in demand for domestic travel.

Bali market shrank by 66%. It’s now the second largest market after Sydney. However, the market still has the highest number of villas available for full-time vacation rental. Despite a 20% reduction, there are still vacation villas in Bali. The average price is reduced by 34%. Average rate is less than US $ 150 / night.

The market with the greatest decline is Danang (79%). According to the General Statistical Office of Vietnam, in March 2020, the number of international travelers coming to the country stood at 450,000, a decrease of 68% from the previous year. After March, there were hardly any international travelers. (source)

Despite the lockdown, we are seeing positive signs for domestic travel in Australia. Byron Bay, Perth and Sydney saw double-digit increases in the supply of villas. Sydney is now the largest market, reaching US $ 58 million (a 13% increase from 2019). ByronBay grew by 80%. The number of registrations, the rate as well as the occupancy rate have increased. This growth is due to the fact that many people have listed their homes or second homes for vacations, and the government also has several initiatives to stimulate domestic demand such as the Regional Tourism Revival Initiative, the NT Tourism Campaign and the subsidies for inland regional roads.

Growth rate of APAC villas 2021
APAC Villa Rental Market Size 2021
Average rental rate of APAC villas

Response of the owners of APAC villas to the Covid-19 pandemic

1. Quick response to changing environment

Despite the initial shock, owners of APAC villas quickly adopted new safety measures such as social distancing, masks, and new hygiene standards. “We have actively changed the way we operate, incorporating Covid security measures into our physical spaces, the way we interact with customers, the way we interact together as colleagues and really, in absolutely everything we do. let’s do. But we have managed to come together as a team and we feel more united than ever in our shared goal of delivering sensational and safe experiences to our valued customers around the world, ”said Libby Spears, Director of Sales and Marketing for H2 life, manager of over 200 luxury vacation rentals in Niseko.

2. Focus on the internal market

In destinations, such as Niseko, where travel is very seasonal, villa owners now invite visitors to travel also during off-peak periods. “Building on our year-round appeal to this market is a key strategy that will grow our business for years to come,” said Spears.

In Bali, when the destination was closed to foreign visitors, domestic travel was gradually resumed. I Gusti Ngurah Rai Airport recorded significant growth from June to November 2020. On average, the number of flights increased by 56.1% and the growth in the number of passengers was 101.4% (source).

3. “Corona-deals” for digital nomads and long-term tenants

In 2020, many villas were offering what we called “Corona-deals”, targeting digital nomads and international visitors stranded in the destination. They opened up the villas for long term rentals at a fraction of the usual rate. Airbnb also had 6 million global listings available for monthly rental, many of which offer discount for extended stays. (source)

Outlook 2021 and the future of post-pandemic travel

1. The expectation of a boom in domestic travel

When travel resumes, we will first see a recovery for domestic travel. While international borders remain closed, many countries, such as Australia and Vietnam, are easing restrictions on domestic travel. The Australian government, for example, is halving the price of nearly 800,000 flights to encourage people to spend more on their trips. (source)

2. Uncertainty about reopening international travel

“Travel to the region will only resume in the fourth quarter of this year, and we likely won’t see a suitable recovery until the second half of 2022,” said Daniel Rouquette, Managing Director of Villa Finder. He shared that the company is looking for various signs of a potential comeback. The international market depends on many things such as the vaccination rate across the world, the development of the pandemic, the Covid travel protocol and the quarantine process in host countries.

Jack Eden, CEO of Eden Villas, specialist in luxury villas in Sri Lanka, echoed the sentiment: “I always thought 2021 would be difficult. [W]While we do our best within the allowed parameters, happily accepting any business we can secure, our budgeting has always been focused on 2022. There will be some nervousness at first as the world gets used to travel again. and that individuals gradually regain confidence in the safe confines of their country of origin.

HeLife’s Spears added, “We know that skiers and snowboarders are adventurers at heart, and they are increasingly eager to travel, so we expect snow lovers to be among the first to take the plunge and resume their travels abroad. We are fortunate that Niseko and Furano are located in the beautiful Hokkaido countryside and believe that guests will look for destinations outside of the bustling cities when they initially return on their trip. s

3. Different travel expectations of consumers

Safety measures such as mask wear, social distancing and disinfection of public spaces and flexible cancellation policies will be fundamental rather than pleasant. Having a travel insurance policy that covers Covid-19 has also become mandatory in many countries like Cambodia, Laos, and Thailand. In addition, some expectations remain unchanged.

“[G]Customers are always looking for sensational experiences as they always have been. Their desire for exceptional accommodation, memorable activities, attentive and personalized service and the normality of being able to do what you want, when you want, during your vacation will always exist. In fact, it will be more important than ever. Spears said.

4. Optimism about the future of travel

Experts remain optimistic about the villa market, especially after the pandemic. The post-covid period will be a very interesting period for the villa market, the behavior of travelers is changing. There is always a demand for travel.

People miss travel, according to Airbnb research. They want to travel to connect with their friends and family. They want to travel nearby and travel safely. (source)

“[T]there is a demand there for long haul travel and so once we can all travel unhindered, the industry will recover, ”noted Eden of Eden Villas.

“That’s the golden question and predicting when travel will return with certainty is a challenge. But we are optimistic to have international guests from parts of the world joining us before the end of the year, ”commented Spears.

5. A shift from hotels to villas and other alternative accommodation

The post-Covid world will also bring an exciting opportunity to the villa rental market. Experts believe that the demand for villa rentals will be stronger than ever. Travelers will want a smaller location away from the crowds and avoid sharing facilities with other guests. This makes the villas the best choice for accommodation.

Short-term rentals are much more resistant to the impact of Covid-19 than hotels, according to AirDNA research. While it is still too early to consider an uptrend as a rebound, it should be noted that alternative accommodation is showing more resilience. The larger properties (4 bedroom villas, etc.) have the highest performance. (source)

“The villas will recover well and will be the first choice of accommodation. The villas offer a ‘home from home’ experience while being looked after by a dedicated villa team including a private chef, butler and housekeeping staff. With a dedicated concierge service organizing everything, villa guests can enjoy the variety of what a country can offer in the private setting of their own villa. Compare that to a hotel and what’s not to like? Eden concludes.


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