An interesting article came across my desk today highlighting the growing vacation rental market in San Francisco.

Here is an excerpt of the article:

San Francisco has been a mecca for tourists and business travelers for more than a century, and to meet the demand a vital hospitality industry has sprung up. Scores of high-end hotels and corporate apartments, hostels and bed and breakfasts all compete to attract the city’s yearly 16 million visitors and get a portion of the over $7 billion they spend. But in the past few years, with the rise of the Internet’s free market enterprise, the city has seen another sort of accommodation crop up: the individually owned vacation property.”

Cont…

“Indeed, according to a quick and dirty survey of a dozen Web sites which list San Francisco vacation homes, more than 700 houses, flats or apartments in San Francisco are being primarily rented as temporary crash pads. That doesn’t count those properties that exclusively use Craigslist.org as their sales portal.”

For visitors this is great news — especially as hotel rates escalate through the roof. Renting an individual apartment or house can mean a lot more space and luxury for a fraction of the price.

The Good and The Bad:

The emergence of urban vacation rentals is a great win for consumers. Consider, New York City, where average hotels prices exceed $300/night. If you perform a quick search for vacation rentals in NYC you can find accommodations for ~$150/room/night. – a 50% savings boost compared to the average NYC hotel…

I have hands on experience with urban vacation rentals as I used to rent my Boston condo as a vacation rental. Last summer I was able to command ~$1,500/week. Most of my guests left wonderful notes thanking me for the unit and suggesting I charge MORE (true story).

The problem with urban vacation rentals is the increased unpredictability and potential legal concerns. Last summer, most of my guests required I “prove my identity” before they would send me payment. Luckily, I have a number of online profiles that helped.

An additional challenge faced by urban vacation rentals pertains to zoning laws and condo/co-opt bi-laws. Most urban vacation rentals are facilitated via apartments/condos that are accompanied by specific rules/regulations for how an owner/primary-renter is to maintain their unit. In many cases, the owner/primary-renter may be taking legal risks in turning their unit into a vacation rental.

The Urban Vacation Rental market is a real opportunity in cities such as, San Francisco, Boston, New York and Chicago, but there are valid trust and legal concerns that need to be addressed before this segment of the vacation rental market will emerge as a mainstream lodging option. In the interim, it’s great to see the concept gaining momentum and I look forward to helping provide urban vacation rental accommodations via FlipKey.com in the near future.

This entry was posted on Thursday, May 29th, 2008 at 2:41 pm and is filed under Community, FlipKey Service, Listing Services. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.