Research suggests that investors should future-proof developments because consumer behaviour, which is disrupting multiple verticals, signals that products that can act in all accommodation sectors are in demand and it is forcing legislation to think differently.
New generations of renters and travellers think differently about how they visit, live, and work in cities. According to the Renter Preferences Report produced by the US National Multifamily Housing Council, 82% of Millennial renters either have a positive or neutral response to the concept of short-term rentals. According to the report, more than 40% of renters from the age of 25 to 34 were interested in the ability to earn extra income by listing an apartment on a short-term rental site, with less than 10 percent objecting to the idea of living somewhere with this option.
Preferences change over time and today’s consumer is more likely to accept larger communal areas for entertaining and co-working as a trade-off for a smaller apartment size. Zoku is an excellent example where this exchange, along with a vibrant community model, is achieving high customer satisfaction and loyalty.
Future-proofing in today’s hospitality market can signify retrofitting properties for new purposes, as seen at Project Hawk in Bradford, where the developer is adapting a former department store into an aparthotel. Future-proofing can also mean designing the property today for one purpose, and with minimal adaptation it can become something new. A hotel converted to a co-living space in 5-years and student accommodation a decade later, delivering the product the market needs when it needs it. The key is flexibility and multi-use. Project Pinnacle in Canary Wharf is being purpose built in a layered, multi-use fashion that will allow it to adapt when necessary.
The disruption of Airbnb and other peer-to-peer rental markets cannot be overstated. From regulations and taxation, to urban planning and real estate development, the trends are innovative and fast moving. Cities from New York to London to Sydney are all coming to grips with the changes in the market. As developers need to think of flexibility and multi-use so do legislators.