Luxury rental market – current trends and challenges

As we are still evaluating the direct and indirect effects of the coronavirus outbreak on the global economy, there has been increasing speculation over the future of the tourism sector in general since it has suffered a huge setback of…

As we are still evaluating the direct and indirect effects of the coronavirus outbreak on the global economy, there has been increasing speculation over the future of the tourism sector in general since it has suffered a huge setback of this crisis and all the challenges it inevitably brings. 

Considering that the Croatian economy is extremely dependent on tourism, which directly generates a significant share of country’s GDP, it is not surprising that investors and rental property owners found themselves in an unenviable situation overnight, facing numerous inquiries from concerned guests who wanted to cancel their reservations or inquired about the current epidemiological situation in the country, as well as the procedures that would be implemented at border crossings. A fierce battle for each and every reservation ensued since the confirmed reservations could have been canceled at any moment due to the introduction of quarantine in certain emitting markets, or the recommendation to postpone travel until further notice, but also due to a number of new rules introduced on a weekly basis. 

Exposed to a large amount of often contradictory information, and the recommendation of global booking platforms counseling implementation of high-risk cancellation policy without any penalties for last-minute cancellations, vacation rental owners and travel agents had very modest expectations for the so-called ‘new normal’ tourist season in unprecedented circumstances.

luxury rental market
Villa Endless View

Given that the epidemiological situation in the country has been stable, and that the spread of the virus has been kept under control, Croatia has been recognized as a safe destination, and despite skeptical announcements and cautious forecasts of expected numbers and results, there has been an increased interest in luxury holiday villas.

Tourists’ expectations and demands

What conclusions can be drawn about the profile of travelers who were not discouraged by the Covid-19 and who decided to take their seaside vacation nonetheless? 

First of all, it is clear that new time brings new expectations and standards that property owners must successfully meet in order to gain the trust of customers and provide them with absolute security that they can spend their vacation carefree regardless of the challenging circumstances we are currently facing. According to the latest inquiries and trends, most clients seek to book luxury villas in prestigious locations and oftentimes tend to book longer stays and additional services such as daily cleaning, grocery procurement, and a private chef who will take care of all meals during their stay. Such requests were more easily accommodated by the owners of prestigious villas who had previously been in contact with clients who want a little something extra for their vacation and by that, we don’t mean just modern amenities or a picturesque sea view.

A new era of travel – trends and opportunities

Current trends again lead us to the conclusion that these extraordinary times have not by any means seen a downfall in demand for the most luxurious properties in exclusive locations. Moreover, the demand for facilities of this type seems to greatly exceed the supply, so customers are often compelled to change their plans and choose another destination that can meet their expectations. The largest number of confirmed reservations has been made by guests from neighboring countries who, thanks to the favorable geopolitical position of Croatia and excellent infrastructure, traditionally arrive on vacation by cars, and due to shorter trips prefer to choose holidays in the northern parts of the Adriatic and Istria.

Villa Appeal

It is very difficult to predict future developments in the global market and the dynamic world of the travel industry, but we are certainly at the dawn of a new era of travel that will be defined by adaptation to a new lifestyle promoting strong awareness of values ​​such as health safety, environmental protection, and socially responsible behavior.

With growing awareness of the effects of mass tourism, clients are nowadays looking for more ecologically sustainable destinations and accommodating facilities, therefore we are presented with a unique opportunity to position Croatia as a destination that can meet new challenges and readily accept new conditions that might potentially result in a more responsible and innovative offer tailored to the current market needs.