Vacation Rentals: Destination Trends and Prospects for 2024

Resultant from the high absorption of real estate inventory that has occurred in recent years in Puerto Vallarta, as well as the region’s enjoyable features and attributes, there has been a boom in the vacation rental market for some time. In an exclusive interview with Eduardo Orieta, sales executive at Vacasa, a leading vacation rental property management company in our region, the Vallarta Real Estate Guide editorial team reveals some current trends in our destination, as well as projections for 2024.

Due to its features and attributes, the vacation rental sector has found an ideal place for development and growth in both Puerto Vallarta and Riviera Nayarit.

VACATION RENTALS: CURRENT SITUATION

“Nowadays, vacation rentals or short-term rentals have become another alternative to meet the demand for traveler accommodations in Puerto Vallarta. In addition, with technological advancement and the proliferation of platforms such as Airbnb and Vrbo, as well as the increasing number of real estate projects being built in Banderas Bay, this sector has found our region to be an ideal place for development and growth,” explains Orieta.

During 2023, 7,500 Airbnb units were registered throughout the Banderas Bay area, with Puerto Vallarta accounting for approximately 5,800 units.

THE OWNER AND THEIR COMMITMENT TO QUALITY

According to our expert, for a vacation rental to be successful, there must be a commitment to quality on the part of the owner. “Although most property management companies can guide owners in keeping their villas/condominiums in optimal condition and well equipped, an extra tip is to make needed upgrades and updates in a timely manner. I always ask: ‘Are you willing to highlight and differentiate your property from the thousands that already exist?’, and this dedication to quality and differentiation is key,” he says.

THE FIGURE OF THE PROPERTY MANAGER

“The position of property manager is essential for three reasons: time, know-how and cost. Vacation rentals are intrinsically linked to the tourism market, which operates 24/7. A property manager’s experience and knowledge, coupled with the ability to knowledgeably allocate prices, all translate into added value for owners.”

ESSENTIAL AMENITIES FOR A SUCCESSFUL VACATION RENTAL

Besides a condo pool or a rooftop offering views of the ocean with nice lounge and seating areas, Orieta shares: “Without a doubt, the most in demand amenity is stable wireless internet with a good connection. Also, a well-equipped kitchen is something that is very much required in units for them to make good vacation rentals in Puerto Vallarta.”

LOCATION: A HUB FOR BUYING A VACATION PROPERTY

According to Orieta, location is paramount, as proximity to the beach increases not only the likelihood of renting, but also the possibility of setting a higher rate. “Although the market in Puerto Vallarta is diverse, most travelers tend to choose a property that is close to and/or has direct access to the ocean, in order to get the most out of their stay.”

CONSIDERATIONS FOR ACQUIRING AN INVESTMENT PROPERTY

For those who are currently thinking about acquiring a property as an investment for vacation rentals, Orieta shares these considerations: “The location of the unit and its proximity to local attractions is key, as that will help decide its rate on the rental market. In addition, it is vital to analyze the regulations of the condominium Homeowners Association (HOA) to check that the maintenance fees are reasonable and, of course, that the regulations have no restrictions regarding short-term rentals, since, in some cases, these can be a minimum rental period of 30 days and that leaves very little room to work with vacation rentals. The property must be in good order and preferably it must be able to allow a professional company to enter to operate there.”

PREFERENCE IN UNIT CONFIGURATION

Our expert mentions that one-bedroom properties perform exceptionally well in our region’s vacation rental market. “However, those with three bedrooms or more experience higher occupancy than other markets in Mexico. Puerto Vallarta stands out in the region for maintaining stable occupancy throughout the year.”

OUTLOOK FOR 2024

When asked about his prediction for 2024, Orieta remains positive: “We are seeing that it’s going to be a good year. Although the booking window has been reduced, there is a lot of new products on the market, and I think it’s important for properties to be able to differentiate themselves. After the economic boom brought about by the pandemic, the sector has stabilized. All of this translates into a highly competitive market. Definitely, strategic positioning and differentiation will be key in 2024,” he explains.

MINIMIZING REGULATORY LIABILITY

Finally, Orieta concludes: “In times when regulations can fluxuate, it is important that the owners of vacation rental units comply with all requirements at the federal and local level, and in this way the vacation rental industry will remain healthy and active.”