Shifting to a hybrid model? Here’s what to consider

The short-term rental (STR) sector is changing fast, driven by evolving travel trends and tightening regulations. Once dominated by holiday homes for leisure travellers, the industry now demands a higher level of flexibility to stay competitive.

To adapt, property managers are rethinking their approach – not just in terms of varying the length of stay in their rentals but also in the types of properties and how they’re marketed. 

A hybrid rental model which blends short-, mid-, and long-term stays across multiple property types, can help diversify revenue, stabilise occupancy, and reduce reliance on a single guest segment. However, running hybrid management requires careful planning. Here’s what to consider:

Hybrid model as a hedging strategy 

Regulatory uncertainty is increasing worldwide, with popular destinations such as New York, Barcelona, Porto, and Athens imposing stricter short-term rental rules. To stay compliant while maintaining revenue, many operators are shifting to a hybrid model, incorporating mid- and long-term stays alongside short-term rentals.

While short-term rentals command higher daily rates, they often face occupancy fluctuations, especially in off-peak seasons. In contrast, mid-term rentals, such as those catering to relocating employees, offer lower rates but steadier occupancy.

Operators are also rethinking how they offer their properties to match changing traveller preferences. For example, some vacation rentals operate as whole-unit rentals in the summer but switch to hotel-style, room-by-room rentals in the winter or during seasonal events. This cross-segmentation approach maximises occupancy year-round. 

By combining flexible rental durations with adaptable property use, hybrid models enhance resilience, allowing operators to adjust pricing, maximise peak-season earnings, and secure steady income during slower periods.

Assessing risks before shifting to a hybrid model

Before diversifying, managers must assess the risks and opportunities. Not all markets or properties are suited for a hybrid approach, first consider the following: 

• Local demand: What is the mix of travellers in your area? Business hubs and university towns may support mid-term rentals, while leisure destinations may require seasonal shifts in rental strategy.
• Seasonality: Properties in high-demand summer destinations might benefit from whole-unit short-term rentals, while mid-term stays could be more viable in off-seasons.
• Regulations: Are there restrictions on the number of days a property can be rented?
• Operational capacity: Managing different rental types requires varying levels of effort. Can your team handle a mix of guest turnovers, cleaning schedules, and guest management?

Operational challenges and solutions

Running a hybrid rental business introduces new complexity. Managers must now juggle different guest expectations, operational workflows and compliance requirements. Common issues and solutions include:

• • Varying maintenance needs: Operating a property as a short-term rental requires frequent changeovers, while mid-term rentals need regular maintenance checks. Having structured inspections and cleaning schedules keeps properties in top condition.
  • Pricing strategy adjustments: Short-term stays require dynamic pricing that shifts daily, whereas mid-term pricing is typically more stable. Using advanced rate automation tools can help optimise revenue across rental types.
  • Varying tax rates: Ensure your system can automatically apply the correct tax rates based on length of stay and rental type to maintain compliance.
  • Contractual and legal differences: Mid-term tenants often require rental agreements, so managers should prepare standardised contracts aligned with local laws. Digitising and centralising agreements, and automating tasks like signature requests, help reduce admin work and ensure compliance across properties. 
  • Stricter safety requirements: If catering to corporate travellers, properties must meet companies’ stringent “duty-of-care” standards in safety. 

Technology is a lifesaver to handle the complexities above. By using a modern property management system (PMS), operators can list, price and oversee multiple property types and rental durations from a single platform. The best PMS can “flex” to meet the needs of different accommodations, whether it’s a villa, hotel room, apartment or glamping pod, without requiring costly system overhauls or additional software.

Marketing for different audiences

Another advantage of a hybrid model is increased visibility. By “flexing” how your property is marketed – whether as a short-term stay, mid-term rental, or seasonal hotel-style accommodation – you can expand to new channels. Listing beyond Airbnb and Vrbo on platforms like Booking.com and corporate housing marketplaces allows you to attract a wider range of guests, including business travellers and extended-stay visitors, helping enhance occupancy.

To drive bookings, tailor your listings to the right audience. Highlight leisure features for tourists and practical amenities, such as a dedicated workspace, for business travellers. Use targeted keywords such as “perfect for corporate stays” or “ideal for digital nomads” to appeal to the right guests.

STR operators who rely on a single guest type are more vulnerable to economic shifts, changing regulations and seasonal slumps. A well-planned hybrid strategy can help diversify revenue and stabilise occupancy. By assessing demand, repositioning your product and ensuring your tech is capable of “flexing” and handling more complex operations, you’re a step closer to future-proofing your business.