Tourism is one underrated factor with very huge effects on the current short-term rental market of real estate. The rate of tourism in a country or a state has a very huge role to play when it comes to short-term rentals and the ease and flow of profit in that aspect of real estate. The idea is that when tourists travel to a new place to visit, they always need a new place to stay for that short period of time and also want to make the best of their time there by ensuring that they have a comfortable place at a very good location.
Tourism has very great potential to increase the yields and profits made from a property on a short-term lease rather than the traditional long-term lease and the lesser profit it brings to the owner of the property. Also, the fact that it is short-term allows the property owners a level of flexibility so they can control their rental prices and rental periods. What property owners need to do is target peak tourist periods and ensure that they make the best of these periods. Peak tourist periods in Nigeria are usually the festive period in December or a time of the year with events, conferences, or concerts that would attract foreigners to the country.
Tourism has led to a good level of job creation in the state and in the country, with new trends that have emerged over time. Currently, there has been the development of companies solely for professional rental management services for short-term rentals. One can also highlight the development of luxury and wellness in locations that are open for rentals to tourists too.
However, it is very important to note that tourism also has its negative effects. One of which is the fact that property owners are more inclined to the advantages of short-term rentals because there are fewer options available for long-term rentals. The reduction in availability also means that housing becomes less affordable too. Overtourism can also cause a strain on infrastructure and community resources and lead to the displacement of locals in that particular location. And as juicy as it sounds, tourist periods are usually unpredictable, and there may be fluctuations in occupancy rates. So, if a property owner is not very strategic with planning, there may be adverse effects.
The impact of tourism on the property market is one that has multiple dimensions. While it offers good economic benefits, it also has the challenges that it poses in the market. This simply means that stakeholders in this particular market space should be very alert of the evolution in the industry, and they should do well to adapt to this evolution, addressing all regulatory, environmental, social, and economic concerns as they arise. More importantly, the goal should be to strike a good and profitable balance between short-term and long-term leasing.
