Digital Landlords predict growth in real estate driven by short-let homes
With gradual resumption of business activities following the COVID-19 inspired lockdown globally, a Lagos-based firm, Digital Landlords has predicted a spike in the real estate, hospitality, and tourism sectors.
According to the firm, more people are expected to seek the desired trip away from home to their choice holiday destinations or even a short break away from home having spent the large part of the previous year working remotely.
The Chief Executive Officer of the firm, Mr. Keji Giwa said this in Lagos noting that while hotels have taken a beating in bookings as a result of the COVID19 pandemic and global lockdown, short let homes and apartments bookings have soared with the number of bookings continuing to rise as activities return to normalcy.
According to a report by Market Watch, the short-term rentals market has grown significantly during the last few years, and it is expected to grow at a rapid pace in the next five years.
Experts in the sector said the increase in short let homes adoption was in close relation to growth in the tourism industry as travelers have widely adopted short-term rentals, such as the vacation homes on Airbnb and other booking channels, resulting in one of the hottest arms of the sharing economy.
Amid growing urban and middle-class cities comes a need for recreational centres, tourist accommodation and activities. According to African Futures Papers, by 2035, close to 30 million people could live in Lagos, turning Nigeria’s commercial hub into the largest megacity on the continent.
The city is predicted to become one of the fastest-growing cities in the next twelve years with Lagos becoming a megacity by 2030.
Giwa, said digitization and the huge cost of hotel rentals have created a huge opportunity for short let homes to thrive. “Why on earth have I been paying high prices for hotel rooms when I could pay less for a whole apartment within the same prime location and with close proximity to the best bars, restaurants, shopping centres and beaches.”
He added that, “Lagos Island is experiencing a real estate boom driven by high yield rental income from short let opportunities. This can be seen as both a threat and an opportunity for the hospitality industry. The prospect of its continued expansion is clearly a timely warning to hotels offering rooms at the same rates that consumers can use to get a whole apartment and, in some cases, much lower.”
Giwa disclosed that average booking duration increased by 350per percent for group bookings from 4-days to 14-days and an average of 7-days for single bookings, which is a 230per percent increase from a previous average of two days per booking.
He also stressed that the hospitality and tourism industry is evolving to meet the needs of end users.
“Hotels can choose to evolve or compete, however with digitization, automation and artificial intelligence, digitally focused start-ups within the short-let rental market can create a terrifying monster for large and small hotel chains just by using technology to deliver on the go instant bookings, convenience, comfort and the use of virtual booking agents to replace human agents,” he said.
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