In the ever-evolving landscape of the short-term rental (STR) market, property owners are constantly seeking innovative ways to enhance guest experiences and differentiate their listings. One emerging trend that has garnered significant attention is the incorporation of entertainment amenities, such as pool tables, board games, and gaming consoles, into STR properties. While these amenities may seem like simple additions, their potential impact on STR performance is a subject of growing interest.
The allure of entertainment amenities lies in their ability to cater to a wide range of guest preferences and create a more engaging and memorable stay. Pool tables, for instance, offer a classic and social activity that can appeal to families, groups of friends, or even solo travelers seeking a bit of leisure. Board games, on the other hand, provide a nostalgic and interactive experience that can foster bonding and create lasting memories among guests. Gaming consoles, with their vast libraries of games and immersive gameplay, cater to the tech-savvy traveler and offer a modern form of entertainment that can appeal to both younger and older generations.
In this comprehensive analysis, we delve into the data to uncover the nuanced relationship between these entertainment amenities and STR performance, exploring how factors like property type, location, and strategic decision-making can influence returns. Whether you’re a seasoned STR investor or just starting, this article will provide valuable insights to help you make informed choices and potentially boost your rental income.
Impact on Performance
In analyzing the monthly revenue performance of short-term rentals (STRs), we find that board games, gaming consoles, and pool tables generally lead to increased revenue for investment-grade properties. Investment-grade assets are defined as STRs operating year-round, being well-managed (e.g., optimized occupancy), and demonstrating proven operational excellence (e.g., great reviews). This trend is mirrored in non-investment grade properties, with the exception of board games.
Notably, investment-grade properties equipped with these amenities tend to have a higher average number of bedrooms compared to their non-investment grade counterparts. For instance, the average number of bedrooms in investment-grade properties with gaming consoles is 4.9, significantly higher than the 3.2 bedrooms in non-investment grade properties with the same amenity.
It’s crucial to consider that the revenue increase observed in properties with these amenities might be influenced by the larger property size rather than the amenity itself. To isolate the impact of amenities on revenue, we examined the percentage difference in revenue for properties with and without a particular amenity across all assets, controlling for the number of bedrooms.
This analysis revealed that gaming consoles and board games were associated with a general decrease in revenue. Conversely, the addition of a pool table consistently increased revenue across all property sizes, with the most substantial impact observed in properties with three bedrooms.
How Location Matters
Location significantly influences the revenue performance of STR amenities. For board games, investment-grade properties in mid-size cities exhibit the highest average revenue at $10,679, while non-investment grade properties in coastal leisure areas generate the highest average revenue at $5,191.
Regarding gaming consoles, investment-grade properties in large city suburban areas outperform other locations with an average revenue of $9,334. In contrast, non-investment grade properties with gaming consoles again generate the highest average revenue in coastal leisure areas at $6,871.
For pool tables, investment-grade properties in coastal leisure areas achieve the highest average revenue at $13,826, while non-investment grade properties also see the highest average revenue in coastal leisure areas at $7,538.
Conversely, investment-grade properties with board games see the highest average revenue in mid-size cities, while those with gaming consoles perform best in large city suburban areas. This indicates that investment-grade property owners are strategically tailoring their amenity offerings to cater to the specific preferences and demands of their target markets in different locations.
Such analysis underscores the necessity to have caution when obtaining insights from general market trends when making investment decisions.
Conclusion
The integration of entertainment amenities like pool tables, board games, and gaming consoles into short-term rental properties presents a complex landscape of opportunities and challenges. While these amenities can enhance guest experiences, their impact is not uniform and varies significantly.
Investment-grade properties, characterized by their year-round operation, effective management, and excellent reviews, generally benefit more from the inclusion of these amenities due to better optimization across markets.
However, the perceived revenue increase associated with these amenities is also influenced by property size. A more nuanced analysis indicates that while pool tables consistently demonstrate a positive effect on revenue, board games and gaming consoles are less beneficial, especially in smaller properties.
Ultimately, while this article presents an overview of the impact these entertainment amenities make, the decision to include these options in a STR should be based on a comprehensive assessment of individual markets. At Revedy, we recommend approaching these decision with a data-driven and strategic mindset so STR owners can create a more engaging and profitable guest experience while navigating the complexities of the ever-evolving short-term rental market. To learn about what amenities might be best for your property, reach out to our specialized design & renovation team at refined@revedy.com.
Boost Revenue with the RIGHT Amenities!
Report by Michael Dreger
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