The Vacation Rental Key with T and T
This is a podcast for professional vacation rental managers. Whether you manage 5 properties or 500 properties you can gain insight on how to run a successful vacation rental business by listening to T and T give their Keys to being the best.
Tim Cafferty is an icon in the vacation rental business. A 3 time President of the Vacation Rental Management Association he is "The O.G." when it comes to vacation rentals. Tiffany Edwards is one of the most well respected vacation rental operators in the country. Together, T and T bring you hard hitting and productive content that will help you run your vacation rental firm more profitably. Give The Vacation Rental Key with T and T a try today!
The Vacation Rental Key with T and T
Episode 21: Bold Predictions And Pivots For 2026 from the experts.
We share the most useful lessons from 2025 and stack them against bold, data-backed predictions for 2026. Guests from data, software, brokerage, and luxury operations add a wide lens on AI reliance, flexible stays, regulation, and quality.
• investing time in tools already owned
• doubling down on top performers
• daily hands-on revenue management
• pivoting calendars and cancellation rules
• AI discovery and answer engine optimization
• service quality as the true moat
• regulation readiness in an election year
• K-shaped economy across guests, owners, staff
• short stays rising in a hybrid model
• AI fraud risk and mitigation
• direct booking growth via autonomous marketing
• quality reset and asset preservation
Send us a line. What predictions do you have for 2026?
You're listening to the Vacation Rental Key with T, the podcast for Vacation Rental Managers, by Vacation Rental Managers. I'm Tim Caffer, and I manage two companies. One in Virginia and one in North Carolina. I'm one of the two teams.
SPEAKER_04:And I'm the other team, Tiffany Edwards. Born and raised in the vacation rental business. I help manage our family businesses from Key West all the way to Kawaii.
SPEAKER_06:In the next 30 minutes, we're going to give you our keys to success in the vacation rental business. Welcome back, everybody. We thought it would be a great way to close out the year with a list of what we've learned in 2025 and our 2026 predictions. We've enlisted some of the best and brightest in the industry to provide the predictions, and Tiffany and I will share our own as well.
SPEAKER_04:I'm very excited about this, but before we get into predictions, let's talk a little bit about lessons learned, Tim. I know everyone else is probably talking resolutions, but I want to hear about what have we learned to carry us into 2026.
SPEAKER_06:Okay. You want to start?
SPEAKER_04:Sure. One of the greatest things, and this isn't a very high-level picture for businesses. It is so important to invest time in supplier two tools that you already own. There are so many technology sources that are getting better at integration, that are utilizing different AI. We'll hear about that later on. But you may have access to things that will help your business tremendously that you're already paying for. But instead of pushing it down the road, you need to take the time right now because it'll serve you as a greater profit in the long run. And you just need to do the work on the front end, get it right. For me, I'll say on a totally different perspective, but you know, in a past couple of podcasts, we talked about owner newsletters. I'm not a fan of them, but I sat down, I learned how to do Canva, I learned all that it could provide, and now we have great newsletters. I have templates in place instead of hiring a full marketing team to do it. And that's on a lower scale, right? So really take the time to learn what you have at your fingertips.
SPEAKER_06:Fantastic. Okay. Can I give you one of mine that I learned this year? Please. It's really been emphasized since we started doing this podcast, and that's invest more in your people. 2025 was the year of doubling down on top performers and separating ourselves from underperformers. All we have to sell is service, and those who didn't keep up were left behind in my organization.
SPEAKER_04:Yeah, a lesson learned that is a theme, I think, for 2026. And so to touch on personnel, one of my other lessons, and we knew this to some extent, but this year proved absolutely essential, is you need to have someone in place as a revenue manager. It is no longer the game where you can rely on just a number. We do have a revenue software system and dynamic pricing in place. That is essential, but you have to have someone that is in there every day that knows how to pull that lever.
SPEAKER_06:So another one for me was sounds bad, but let me explain. Leading from behind was a revelation for me in 2025. I could easily say, hey, we're going to go this direction. But in 2025, I had more of a collective approach. I have very experienced people in my organization, and I relied on them to lead great discussions, and we had a team approach on meeting our goals, and it was a fantastic year for our company.
SPEAKER_04:Yeah, but Tim, to your point, it goes back to lessons learned. You invest in those people. If you invest in those people, then you have the right people on your team to lead.
SPEAKER_06:Sometimes I have to say it two different ways before I believe it, Testy. So there you go.
SPEAKER_04:Well, my last lesson isn't really a lesson as much as a reminder. And anyone who knows me knows that I'll probably mention regulations at some point in time or elected officials, but relationships and brands and knowing that you are the professional source for operations in your marketplace takes time with elected officials. We're coming into a campaign year. You're going to have a lot of new faces. Try to introduce yourself. Several years ago, we set out a goal that our group wanted to be the information source for elected officials. And in the last month, I have had more calls from staff members trying to get data and information about our industry for upcoming speeches and campaign pitches. And that's the place that you have to be in, but it took years to get us there.
SPEAKER_06:Good one. I knew you'd work relationship with officials somewhere in your presentation. So the last one for me is when it's not working, pivot. You'll hear some comments from some of our guests today which bring this into better focus as we look towards 2026. But I will say a change in cancellation policies for our company and a fundamental change in our booking calendars was a major pivot for us in 2025, and it paid off handsomely.
SPEAKER_04:So I think we've teased everyone enough. It's time to get in to these amazing contributors and to hear what they have to predict for next year.
SPEAKER_06:We have five experts lined up for you. And the first one is Steve Schwab, the founder and CEO of Cossago. I thought Steve was an absolute thought leader at the Data and Revenue Management Conference in Florida. I thought he was on point with everything I heard him say, and he delivered his message so eloquently. It's important to note that Steve manages a portfolio of approximately 45,000 properties in North and Central America, and he provides great insight into various markets, diversified inventory, and industry innovations, and it's a lens that not many people have.
SPEAKER_05:I think distribution is going to be rewritten through AI Discovery. That our our internal reality becomes our external brand, and that really becomes the demand engine and trust signal that's going to uh take hold in 2026 using the LLM search. I think uh operational excellence as a strategy is going to be more important than ever. I think that AI with the property management uh businesses is going to be important to be able to keep up. Not because you can't do it without it, but because your competitors are doing it more often, they're becoming more efficient, and that's going to help fight a lot of that marching oppression we see. Tech investments and consolidation will continue to happen throughout the industry. There will still be a lot of money coming in from private equity into our industry. They're out there, they're shopping, they're looking for investments. I think that we need to make sure that we are continuing to look at regulation and compliance readiness, especially in those markets that are urban or are not the normal vacation rental markets that will continue to see a pushback against our industry. And then finally, just climate volatility and resilience of operations is going to be important. We're seeing a lot of demand patterns changing, cancellations, insurance costs. Making sure that we are operationally ready and resilient is going to be important to our businesses as we go forward. I think we'll see a 2 or 3% rise overall in our occupancy, and we'll see about a 5% increase in ADR. I hope you all have a fantastic 2026, and we'll see you soon.
SPEAKER_04:I think that Steve hit perfectly and exactly on the target with these predictions. I know it's said many times, but I think it's really important. And Tim, you've actually, I've heard you say this many times, to remember that technology is a tool for efficiency, but hospitality is the service that we provide. And so you must be able to provide on the experience, the quality of service, easy communication, and personalized responses. And those behaviors will continue to be the driving factors of a successful vacation rental. And I think a lot of people in 2026 are going to struggle with this. I think that you are going to see a change in the marketplace, in locations where the people who are doing this right are going to gobble up owner acquisition. And I think that that dynamic is going to change. So I think Steve is right on the target there.
SPEAKER_06:Well, he talked about LLM, that large language model. And so how does this change 2026? This podcast will be an example of what you can do with LLM. Our next episode will be our foray into the next level for our podcast with the help of processes available with LLM. And I, for one, am very excited about it.
SPEAKER_04:We're stepping into the new age in 2026, Tim.
unknown:Yay.
SPEAKER_04:You mentioned it earlier, but regulation, I got to touch on it. I love, love, love that Steve talked about regulation. And that is one of the most important, I think, for us to look at in 2026. It's an election year. Last year was relatively quiet, but this year we're going to see city, county, and state budget deficits. We started to see that last year. We're going to continue to see housing affordability issues. So all of that is going to turn into targeting vacation rentals as a money source. And I think we're going to see a lot of legislation at the state level. I also know, too, because I provide a lot of regulatory consulting and assistance, that there is a lot of investment money coming into the market. I'm getting a lot of calls about what risk assessments are in certain areas and concerns and excitement. So I do think that there's going to be a significant amount of investment that we see in 2026. Do you think that he's right though? I mean, I've told you he's right on some of these other ones. Do you think he's right on the two to three percent rise in occupancy and the five percent increase in ADR? What are your thoughts on that?
SPEAKER_06:I'm in favor of it. So at this moment, I don't see the leading indicators on it, but I trust that we are in a better place as a country economically as we enter 2026. And the prediction makes sense. And if Steve says it, I believe it. So there. Okay, on to our next predictor. You know her, you love her. She's the founder of VRM Intel and the mother of Darm. Amy Highnote is with us to give us her predictions for 2026.
SPEAKER_01:Hi, Tim and Tiffany. First, I just want to say thanks so much for everything that you did to make DARM successful. You both did an amazing job. You killed it, and I'm so grateful for your help. Seriously, could not have done it without you. As far as 2026 predictions go, um, while we were in DARM, we heard e-data and air DNA talk a lot about the K-shaped economy, where some areas go up while others go down. I think we'll see more of that type of economic point where high-income earners in certain sectors are doing really well and have a lot of spending power, while middle income and low-income individuals struggle with really high cost of living and lower spending power. For property managers, it's probably worth knowing which sectors your stakeholders are in. And by stakeholders, I mean the guest that your homeowners and your employees. It'll be important to know which side of that K you're talking to. Other than that, during the holidays, we're seeing that people are valuing experiences over stuff. I think that will continue and will be a big boost for our industry. Thanks for all you do. Happy New Year, everybody.
SPEAKER_06:Yeah, the K-shaped economy was a recurring theme of the conference. I don't think I had ever heard that term before. I also had not heard of hallucinations before with AI. So it was a very educational conference for me.
SPEAKER_04:Yeah, but when you think about it, it makes perfect sense. And I think we could do a whole episode on the K-shaped economy and what does that mean and what are the trends in overall for the tourism industry outside of just vacation rentals. But this is why I love getting on late-night phone calls with Amy and talking about the industry and having some wine, is that she looks at it from a different perspective. When I think of the K-shaped, and when that was being discussed in DARM, all I could think of was our guests and how this affects our guests instead of thinking all stakeholders. How does this affect our employees and the financial stress that they may be feeling? How does this affect our owners when we classify our owners who may be more financially dependent on the revenue that their investment property makes? And so really understanding what those needs are going to be based on the burdens that some individuals within your stakeholders feel is going to be vital in 2026. So, Tim, we've talked about Darm. I wanted to make sure that we included Carrie Bateman as one of our predictors. I had the opportunity to meet her. She has been most recently named Realtor of the Year for the Outer Banks. And it was good to have another Outer Banks individual to join us. To me, the Outer Banks really is a trend mecca of what the vacation rental industry is doing. It's a great representation because it's truly a defined area of a traditional leisure market and the type of vacation that most families provide and what we think of as high peak time frames. But all of that is changing. And so I thought it was really important, and we'll hear what Carrie has to say.
SPEAKER_02:Hey everyone, this is Carrie Bateman from Beach Realty on the Outer Banks of North Carolina. I'm excited to share a few thoughts for what I'm forecasting as we head into 2026. When we talk about predictions for the coming year, one of the biggest conversations in our market right now is specifically the rise of short stays. For decades, the Outer Banks has been built on the traditional week-long vacation is part of our culture here. Families book the same home the same week, year after year. That pattern is still strong, and in the near term, it's not going anywhere. But long term, I think we're already seeing the early stages of a meaningful shift. Traveler habits have changed dramatically. People are more spontaneous, they're taking more frequent but shorter trips. Now, I don't predict that short stays will completely replace the weeklong model, that weekly cadence will always be a cornerstone of the Outer Based travel market, especially in the summer. But I do believe flexible stays are going to play a much larger role in the overall strategy for homeowners and managers in 2026 and beyond. As traveler expectations continue to evolve, the markets that adapt the quickest are going to win. And the ones that stay rigid will eventually lose ground. So my prediction for 2026, we're entering a hybrid era. The Outer Banks will continue to honor its week-long tradition. But the strongest performers, both homes and management companies, will be those that embrace flexibility where it makes sense. Not everywhere, not every home, not every season, but strategically, thoughtfully, and with an eye on where guest demand is heading. The traveler of 2026 wants options. Our job is to meet them where they are while still protecting what makes our market so special. Just want to say thanks to TNT for having me, and I'm looking forward to seeing how these trends unfold in the year ahead.
SPEAKER_04:Yeah. If you're rigid, you're not going to do well. I mean, Tim, you mentioned that briefly internally, but it also goes to external practices. You have got to be able to adapt. I am here for anything that is an era. I am fully supportive of what Taylor Swift started in her eras, and I am here for a hybrid era. But you've had to create the same model in your company.
SPEAKER_06:Absolutely. Carrie is a friendly competitor. We love seeing her around the beach and obviously at the conferences as well. And she nailed it. Yeah, we had to pivot this year. I mentioned it before, and it saved our bacon. So I'm not sure it's just going to be the shoulder season change. She just said it. You have to adapt. And we are adapting in this area.
SPEAKER_04:Yeah, and for some listeners who may not know, the Outer Banks has larger homes. So it's a completely different identity shift than to allow people to come in for these shorter time frames and then in the shoulder season. We experience the same in Hawaii. We like to have longer trips because people are flying over and it takes a long time to get there. So they typically have a longer stay. We changed that this year and we were very successful because we pivoted to what the guest wanted. I also think, too, that it's not just a prediction. I really truly feel that this is here to stay. I just think culturally we have moved to a type of mentality of on demand. I want to do something, I want to do something now. And I also think we're attention deficit. So we're on to the next. It's a short trip, and then we're on to the next project and traveling destination.
SPEAKER_06:Okay. That's three predictions down, two to go. Our next predictor is Vareed Raviv Schwartz. Vareed is the president and COO of Guesty. She has a global perspective, which will be helpful for us to hear. Guestie services property managers in over 80 countries.
SPEAKER_03:I believe the 2026 is the year the industry moves from AI hype to AI reliance. Last year we still encountered some anxiety with many hosts reporting feeling overwhelmed by the speed of AI introduction and adoption. Next year, the growing pains phase will be over. We're going to see a fundamental shift with AI becoming a main pillar in the core operating system of many vacation rental businesses. This would include not just guest communications and dynamic pricing that are becoming the norm, but also in sales and marketing as AI trip planning will become more dominant. And also in the area of fraud prevention, as AI-driven fraud will also become more dominant, unfortunately. At Guesty, we're definitely focusing on this next phase with our suite of AI solutions for property managers. So 2026 is the year the industry expands its use of AI and starts seeing it not just as an efficiency tool, but in some cases a risk mitigator and above all as a revenue driver. Happy New Year, everyone.
SPEAKER_06:It's just a scratch of the surface, as you just said. What about AI fraud? What are we thinking about AI fraud here, Tiffany?
SPEAKER_04:This is why I love hearing from some of these speakers. And I did not think about this within our business of being such a concern in coming into 2026. And Zach Cass, who's a co-founder of Chat GPT, who spoke at the data and revenue management, mentioned that 9% of US population are capable and are currently active in nefarious behavior. So we got a little psych lesson as well. But what that relates to is that any of these individuals can hide behind a computer screen and create even more issues through AI. And I think this is going to trickle down to us in a very, very big way. I love that Dasty is looking at this, that they're talking about risk mitigation, because I just think that this is potentially could blindside a lot of our operators. So not to be the negative Nancy, we'll swift to something a little bit more positive. And that is, I do think that AI will become better development through our suppliers and software. And I know I had mentioned this earlier on in the episode, but take time at the beginning when this stuff is released to learn it and see how it works for you and your business and get it done right on the first time. Because I do think that there's going to be a race to have AI released into the marketplace by a lot of these suppliers. But I also think that the people and the companies that get it right the first time are going to be the big winners in 2026.
SPEAKER_06:Yeah, at the DARM Battleground, we heard from 11 companies with a air quotes new product. 10 of the 11 presentations we saw involved adopting that AI. So I'm going to save my prediction on AI for now, but you'll hear it in just a few minutes. On to our last and not least presenter. Nir Maymon is a vacation rental operator that's someone to listen to when it comes to luxury. I moderated a panel at DAM on luxury and vacation rentals, and Nier blew the crowd away with some of the things he's doing. Not only chefs, dining reservations, private tours, caretakers, but private luxury cars. Rolls-Royce pickup at the airport, anybody? Or luxury yachts, or even arranging private plane charters for his guests. Let's listen to his thoughts about what 2026 will bring.
SPEAKER_00:Our prediction is pretty much the same as 2025. You're not focusing on financial business. You're going to sell.
SPEAKER_04:I mean, that is such a great one to end on. I think this is, I want to go back into my business right now. I want to charge up the troops. I want to go run up the stairs. I want to be the best at vacation rentals. I am 100% here for this prediction.
SPEAKER_06:Okay, now it's time for our predictions, Tiffany. I've got some. I know you have some. Some are serious, some a little less so. And we have some rapid fire at the end as well. So let's get to it. In 2026, one of my predictions, one of my bold predictions, is guests will stop scrolling through hundreds of listings on OTAs. Instead, they will use personal AI agents to negotiate and book for them. We're moving from search to action. And by 2026, or at least next year this time, I think travelers will tell AI, hey, find me a three-bedroom house in the outer banks with a pool for under 4,000 and has a 4.8 rating and a quiet workspace. Professional managers must ensure their data, not just their photos, are AI readable. If your property management system isn't feeding structured data to those bots, your properties will become invisible. This shift of focus from SEO to AEO, answer engine optimization, is going to be real. That's one of my bold predictions for 20 Twix.
SPEAKER_04:I think you're right on that. One of my absolute bold ones, and this could be scary to a lot of people, but I think 40% of the industry will have reservations taken by AI communication, verbal conversations, but with a robot. It's bold, but I think it's happening.
SPEAKER_06:I'm with you. Okay, my second prediction for 2026 is 2026 will be the year of direct bookings, finally rivaling OTAs for professional managers. So thanks to this autonomous AI marketing, you know, for years the book direct was really a struggle for many. And by the end of 2026, I think AI tools will handle the entire life cycle from retargeting past guests with personalized emails to managing concierge-style booking inquiries 24-7 without a human.
SPEAKER_04:Oof. And I think also that you'll then have a growth in that midterm rentals, and you'll see a lot of companies start to adopt that model.
SPEAKER_06:Cool. I think in 2026 we're going to see a purge of mediocre listings. We'll call it a quality reset, if you will. Platforms like Verbo are already removing underperforming listings, if you heard in our past episodes. But in 2026, as supply growth is available, travelers will be quality obsessed due to economic caution. Only managers who prioritize predictive maintenance and great quality will survive. We're returning to our roots. In 2026, the shiny new object isn't a tech tool, it's trust. And the key is moving from property management to asset preservation and hospitality excellence.
SPEAKER_04:Good one, Tam. So this one also is a little bit more positive as well. I think by the end of next year, we will have some type of court case that is moving closer to U.S. Supreme Court that will identify if a property and short-term rental is a residential use and not a commercial use. And if we don't have that court case, we'll have something similar that will be beneficial to our industry.
SPEAKER_06:I love it. Again, the angle of uh regulation. So we can always count on you for that. I had a lot of time on my hands to get these predictions, and I just realized that this is a duplicative one. So I'm gonna skip that. I was talking about the invisible guest, and we're gonna see an era where people booking may not even be a person at all. So you already covered that. So I'll go to a next one, and that is the USA soccer team will reach the semifinals of the World Cup in 2026. That would be the first time since 1930 if that happens.
SPEAKER_04:Well, I hope that does happen, but I also predict that Taylor Swift will be pregnant by the end of next year. He's ready to go, that marriage is gonna happen quickly, the internet will be insane, and we're gonna be seeing all kinds of updates and baby bump pictures, and that's happening in 2026.
SPEAKER_06:Oh my god, people are gonna go crazy. My last big bold prediction streaming services. I think they're gonna continue to merge, and by this time in 2026, we're gonna have three Apple, Netflix, and Amazon. That's what you have to choose from. So there you go.
SPEAKER_04:My bank account would appreciate that. I don't even know what all I'm signed up for at this point.
SPEAKER_06:Oh, no, you're gonna pay more. Don't worry about that. So we'll see how those predictions go. But we have some rapid fire predictions here, Tiffany. Who wins the Fiesta Bowl?
SPEAKER_04:Georgia, of course. I can't wait.
SPEAKER_06:Wait. I say Georgia beats Ohio State. So there you go. They both got some winning to do, but we'll see.
SPEAKER_04:All right, Tim. Do you think that AI glasses will surpass market share of smartphones in 2026?
SPEAKER_06:Uh Tim says no on that one.
SPEAKER_04:I also say no, but I do think that they're gonna at least triple whatever the percentage is that they're at currently.
SPEAKER_06:Okay. Who wins the FIFA World Cup? Us. Really? That is a bold prediction. I say England. Also off the chart, but I think they're gonna be good.
SPEAKER_04:Is FIFA positive or negative for the vacation rental industry? So speaking of regulations, do you think that we'll see something following FIFA in all these marketplaces?
SPEAKER_06:Yeah, I was looking at those marketplaces. Houston, Atlanta, Miami, Seattle, Foxboro, Santa Clara, those are all hotbeds. I actually think it will be positive in the short run, but it may be a one and done for all those communities.
SPEAKER_04:Yeah, I'm a little worried about it. I think that if you're not, if you're in those locations, if you're not preparing and already having conversations with your elected officials, you need to do so as soon as you stop listening to this podcast.
SPEAKER_06:Okay. Couple of more here. Will we have vacation rental virtualslash metaverse tours by 2026? What do you think?
SPEAKER_04:That scares me to death, and I hope no. But I also sat in a conference how many years ago and thought no one would ever pay more than a thousand dollars from a link on their phone. And now we're doing all of our banking on the phone. So I'm gonna say no.
SPEAKER_06:I'm gonna say no as well because I don't understand it, and so I can't vote for it.
SPEAKER_04:All right, Tim, are you gonna be playing more or less golf in 2026?
SPEAKER_06:Well, for me, that's hard to say more because I just looked. I played 80 rounds of golf on 26 different courses this year. So that's a lot of golf. That's a lot of golf. I'm gonna try.
SPEAKER_04:I have goals in 2026. All right, what's your what's your resolution for 2026?
SPEAKER_06:Well, I'm gonna hit the gym more in 2026. I've already started this. I'm going every other day now. That's an improvement for me, and that will translate to better handicap for my golf in 2026. So I'm gonna give it another try playing some of the senior tournaments around the state of North Carolina that I tried this year. And I finished in the top 10 a couple of times, but I'm looking to be a regular participant in the top golfers in the state.
SPEAKER_04:That's amazing. Uh, it's probably not a surprise, but mine is also gym-related. I'm a big gym rat. I've taught spin and weightlifting classes for 12 years, mainly because I can yell at people and they do exactly what you say, and it's a safe environment to do that, Tim. But my I box one day a week, and I want to get much better at my boxing, my timing, how many rounds I can make in my three minutes. And yeah.
SPEAKER_06:Fantastic. Okay, so there you have it. Our predictions for 2026. We'll come back in one year and see what the scorecard looks like. We want to thank our participants, Steve Schwab and Amy Hinote, Carrie Bateman, Bree Dreed Schwartz, and Nir Maimon, who also helped with this podcast. And what do you think? Send us a line. What predictions do you have for 2026? We'd love to have them here on the podcast, and we will be back in two weeks in a new world. That's where I'm gonna leave it for you. It's gonna be a different experience on the vacation rental key 15.
SPEAKER_04:Yeah, get your makeup right.
SPEAKER_06:We can't wait to see you then. And we will see you. So long, everybody. Bye.
