Luxury Short Term Rental Market

[Stephan Garcia]

Hi everyone

My partner and I are looking to develop a hospitality brand that is looking to encompass homes, villas and resorts. We started in 2021 and raised capital to buy land upstate NY and further secured development capital (debt/equity) build the first resort project. This got stalled due to many reasons but primarily seller pulling back on our offer 4x and entitlements in other regions being a massive hurdle. We have decided to look for acquisitions of distressed resort type businesses that can be elevated to the level we need for our venture. 

While on the hunt for a resort acquisition, we decided to look at the short term rental market but on the higher end side in areas upstate NY and the Hamptons. However, while there is a ton of data on short term rentals I am having a hard time finding good research on the luxury segment of the market. We are currently putting offers on properties starting at or above $1M. 

So, my question to anyone that may be able to point me in the right direction or offer some insight is:

1- is there any specific places I can look to find quality data on the luxury STR segment of the market. Ideally, just want to understand how that segment/demographic is performing when compared to the lower end price points.

2 - how should a new operator think/prepare for operating in a highly seasonal market?

3 - Our goal is to build a Hospitality brand, I think we will have the backing for the different levels (homes, villas & resorts) but is there any upside/downside to that when it comes to STRs?

Look forward to being a part of this community and love the knowledge base and how supportive I have seen everyone being in the forums. 

Connect soon

Stephan 

[Jaron Walling]

@Stephan Garcia Define luxury. 

I've rented a mountain top cabin in Asheville, NC with 5 other guys for a bachelor party. In my mind it was peak luxury. It was an absolutely stunning property and clearly another investor(s) vacation home but really an AirBnB throughout the year. I think it was 2900 sqft million dollar cabin. For me personally and our group it was about the amenities. Hot tub with a view? Check. Massive kitchen? Check. Nice size beds? Check. Throw in everything that Asheville and the mountains have to offer and you have a cash-cow from my prospective. 

If the property you trying to buy has some or all the above it's probably worth it. If not I wouldn't call it luxury. No offense. I'd define the goals for your STR and business venture. AirDNA is a great website to compare STR demand. You didn't mention PM. That's a challenging aspect for STR properties unless you live nearby and plan to self manage.