Four months ago, vacation rentals were one of the fastest segments of the housing industry. Today, with travel at a standstill, vacation-rental hosts have seen bookings dry up and many of the companies that promote those listings are struggling to survive. For corporate-housing companies like Wayzata-based Creative Housing Solutions, which caters to companies and individuals who need fully furnished, short-term housing for a month or more, the name of the game is adaptation.
“We’re not living in a world that we were in a couple of months ago,” said Dawn Crawford, Creative Housing Solutions founder, who manages a stable of more than 500 rentals across the country.
Crawford said that COVID-19 put the brakes on the company’s bookings. But instead of laying off staff, she has shifted her focus to filling empty apartments and condos with people who can’t return to their homes because of travel bans; traveling nurses and medical experts; people who need a place to quarantine and housemates who need a place to work — and escape — while their offices, coffee shops and co-working spaces are closed.
Unlike companies that focus on leisure travelers, corporate-housing providers tend to work directly with companies that need temporary housing for corporate relocations and employees on projects. They also attract those who are recovering from medical procedures, rehab and people who are in between homes. Crawford said that because moving into temporary housing can be stressful, her goal has been to simplify and streamline the experience. That includes greeting new residents and offering a variety of boutique-style services including city tours, an orientation, grocery shopping. Providing those services in the midst of a pandemic has been far from easy, Crawford said.
But she’s used to challenges. Crawford originally planned to launch the company on the eve of the 9/11 attacks in 2001, but with planes grounded and travel hobbled, she delayed that opening until the following year. She also faced challenges during the Great Recession, which had an eventual upside: An increase in the number of renters by choice, which has since been a boon to the property management and leasing division of the company.
Still, the pandemic has created an unprecedented challenge for housing providers with frequent turnover: keeping residents and employees healthy. Crawford said she has developed new safety protocols for incoming and departing guests at a time when she’s also trying to tap into new sources of visitors.
The pandemic has crushed the short-stay housing industry, which until a couple of months ago was thriving. The rise of vacation-rental companies such as Airbnb and Homeway had transformed the way people traveled and threatened the hospitality industry by offering a lodging option that couldn’t be duplicated by traditional hotels and corporate housing providers, which tend to focus on stays of 30 days or more.
Those vacation-rental companies are now reeling, and Crawford said the disruption to their business could permanently transform the industry. Airbnb recently announced that it was laying off a quarter of its staff, and shifting from its core short-term rental listing platform.
The pandemic is also putting the squeeze on tech companies that operate a lodging category often referred to as apartment-hotels, mostly in big cities where they are renting out large blocks of rooms or entire floors in residential buildings and converting them into short-term rentals. Stay Alfred, which has a sizable presence in the Twin Cities, ceased operations in early April.
Mary Ann Passi, CEO of the Corporate Housing Providers Association, said that monthly member surveys show that 93% experienced a severe occupancy decline in April, with about half of them experiencing a drop of 30% or more.
“Most of our member companies are small businesses, so any decrease in revenue is significant,” she said.
She said the situation today is more widespread than other downturns, and that providers are looking to new markets, new audiences and new service offerings, so they have had to become “scalable and flexible,” she said.
Crawford said that for now, her focus is on developing new operating protocols, including finding new ways to let prospective guests tour her properties. These are all changes, she said, that she expects will transform the short-stay industry — once again. “We are looking forward to a day when this is all over and our new normal will be better than ever,” she said. “We will get through this — but the landscape will look very different. The way we do business will be very different.