What Is the Future of Short-Term Apartment Rental in Croatia?

What Is the Future of Apartments?

Regardless of whether you are a "world traveler" or not, you have probably heard about the short-term apartment rental revolution. Thanks to Airbnb and Booking, today you can feel at home even when you are on vacation. There is no doubt that in recent years the number of rental apartments in cities around the world has dramatically increased, and numerous investors and property management agencies have joined this wave. Apartments of all types have opened, from luxuriously furnished spacious apartments to small rooms that are far from comfortable. The question arises — what is the future of apartments?

For quite some time, there has been an ongoing discussion about whether it is better and more affordable to rent an apartment instead of a hotel room. The viability of an apartment compared to a hotel depends on guest preferences such as square footage, length of stay, furnishing, and the location of the apartment itself. People who rent apartments primarily do so because they want to "soak in" the culture of the city, enjoy an authentic experience, and have the luxury of their own space. Apartment owners, that is, hosts, always know where the best attractions known only to locals are, which certainly has a positive impact on the overall impression of the city. Globally, apartments are still considered alternative accommodation, and as such, in addition to a lower price, they must provide added value and other benefits compared to hotels.

In principle, apartments are usually rented by families or larger groups of friends who prefer the comfort of separate bedrooms. It is also perfect for longer stays without the "cabin fever" feeling that a cramped hotel room can sometimes induce. The spaciousness of an apartment certainly plays a major role, as it comes with benefits such as a separate living room, a terrace, and multiple rooms. Also, nothing can replace the feeling of "home" even when you are on the other side of the world. The comfort and coziness that an apartment provides cannot be matched by a hotel room, at least not in the same price range — and all seasoned travel enthusiasts are aware of this. Our experience has shown that there is much greater and more stable demand for two-bedroom and three-bedroom apartments, where guests stay for longer periods, than for studio apartments or rooms with a bathroom.

The trend of renting larger apartments existed even before the global pandemic, and studio apartments and basic rooms are being rented less and less, which became even more pronounced during COVID. Years of experience have taught us that the most important apartment amenities (besides spaciousness) are a city or sea view, a terrace, and a garden. Studio apartments and basic rooms can compete with hotel rooms exclusively on price, and when prices fall, the question of profitability arises. I expect that in the future, occupancy rates and prices achieved by studio apartments will continue to decline, while demand for two-bedroom and three-bedroom apartments will grow.