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Short-term rentals are outperforming hotels, here’s how one company is helping property owners

A new Vrbo partnership in Texas and Georgia simplifies compliance process

After COVID-19 paused travel, short-term rentals actually fared much better than hotels year-over-year, a new study said.

As of June 21, short-term rental revenue per available room was down just 4.5%, while hotel revenue per available room was down a full 64.8% than the previous year. This decrease in hotel revenue occured despite the fact that the hotel average daily rate increased 31.9% during that period, compared to the 23.2% increase in average daily rate for 1-bedroom or studio rentals, according to a study by Airdna, a short-term rental data and analytics company.

As states safely reopen and travel begins to recover, more travelers are turning to safer, more secluded lodging.

In an interview with HousingWire, Pam Knudsen, director of compliance at Avalara MyLodgeTax, said that its new partnership with short-term rental company Vrbo was made to help rental owners navigate the compliance part of the industry. This partnership is exclusive to Texas and Georgia, for now.

The partnership is designed help property owners who work with Vrbo deal with the compliance requirements of having a short-term rental.

“The compliance side of short-term rentals is something that is often confusing, not clear, it’s definitely not generally the expertise of the property owners,” Knudsen said. “The partnership is really designed to enable them to have an easier way to handle the compliance-related aspects of their short term rental and that’s everything from the licensing and registration piece, through the collection and calculation and remittance of the lodging taxes associated with it.”

Through the partnership, Avalera allows Vrbo hosts to collect and remit the taxes that are not covered by Vrbo’s agreements with the state, as well as any taxes due from bookings made outside of the Vrbo platform, according to the company.

Airdna said short-term rental companies saw a more stable average daily rate throughout the pandemic than their hotel competitors.

“We took the timeframe of the pandemic to really refine [the partnership] because we knew that there had been, obviously, a significant decrease in the travel industry overall – especially at the beginning of the pandemic – to make sure that we were really in a good place as the travel restrictions ease,” Knudsen said.

Knudsen also said that there is a surge of property owners using their extra property or space as a second form of income. She said this partnership will allow property owners to focus exclusively on the property itself.

“It’s a very seamless process for the property owners,” Knudsen said. “They really don’t have to worry about [the process]. The application for licenses and registrations can be convoluted and a little bit cumbersome as can be the tax return preparation.”

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