After the roller coaster ride experienced by Cape and Islands vacation rental homeowners last year, what can we expect this year?
Well, as noted in our previous Blog post, Outlook for the 2021 vacation rental season, things are off to a hot start. Vacationer traffic and inquiries continue to be exceptionally strong, and booking numbers naturally are following suit.
Have homeowners increased their rental rates this year? They certainly have. But first a look at the early booking numbers:
|Spring/summer/fall from Memorial Day Weekend – Columbus Day||102%||110%||69%||91%|
Bookings to date, as of January 28, are exceptionally high versus the same time last year. And this is true across the board: all regions of the Cape, Martha’s Vineyard, and Nantucket, and for all three seasons, spring, summer, and fall.
For the summer season alone, bookings are approximately twice as high as this time last year! And last year’s bookings at this time were up 12% over the previous year, so last year’s start was also strong.
The exceptionally strong early-season bookings on our site, despite higher-than-normal rate increases, follow a dramatic increase in vacationer traffic and inquiries.
Why are bookings so strong?
There are a few factors that we believe have contributed to the strong vacationer demand at this start to the season:
- Once the COVID-19 Travel Ban was lifted last June, vacationer demand for rentals soared as folks sought a safe haven, and many vacationers struggled to find rental homes last summer. Thus, they are anxious to tie down their vacation plans early for this summer.
- WeNeedaVacation.com’s marketing reach drew much of the vacationer share our way, particularly promoting the fact that we do not charge vacationers a fee, as most of our competition now does. Vacationers are always looking to save what money they can – and they also usually prefer the direct access to homeowners that our business model provides. Read more about our WeNeedaVacation Marketing Efforts.
- Inventory is lower because many homeowners stopped renting in 2019 due to the lodging tax, and more chose not to in 2020 due to the added COVID complications. In addition, being able to work remotely, many homeowners are choosing to spend more time than normal in their rental homes. So, those owners who do rent are facing less competition.
- Many others who were not able to get here last summer opted instead to postpone their bookings until this coming summer, further limiting the number of available weeks.
- Don’t underestimate the allure of the Cape and Islands. They offer an ideal opportunity for vacationers to get away from a home they’ve been restricted to for a year and do so safely and responsibly. This special place provides the perfect recipe of fresh air, natural beauty, outdoor activities, and relaxation.
Here is some data showing by how much homeowners in the different regions have increased their rental rates from last season to this upcoming one.
As you can see, in 2020, homeowners raised their rates fairly modestly, particularly on the Cape, whose rates were up only 1.6% over 2019, and Nantucket, whose rates went up only a fraction, 0.3%, over 2019. (Vineyarders were a little more aggressive at 3.4%.) The modest rate increases were most likely due to homeowners’ concerns about vacationers having to pay the new lodging tax of up to nearly 15% in many towns.
But this year, all three regions have raised their rates considerably: The Cape posting increases of 4.4% (nearly triple last year’s increase), the Vineyard a huge 9.8% (again nearly triple), and Nantucket considerably higher than last year, too, at 3.1% vs. 0.3% in 2020.
The need for homeowners to raise their rates this season is fueled by:
- Knowing how strong the vacation rental market is currently, giving them the confidence that they will still be able to fill their homes.
- The inability to raise rates very much last year due to the lodging tax and worries about the pandemic.
- Their increased expenses due to COVID-19 for cleaning/disinfecting and other precautions.
Read more about Pricing your home for the 2021 Rental Season.
It’s all about supply and demand
Undoubtedly, the increase in vacationer demand is due in large part to the desire for the safe, enjoyable venue of a private rental. A Cape or Islands vacation provides the ability to work remotely in an incredibly beautiful place, often within a few hours’ drive of home. The demand is further driven by the difficulty many vacationers experienced getting here last year (in many cases, having to cancel), and by the fact that many have saved money due to having to forego winter/spring trips they normally take. In addition to the increased demand, the lower inventory of rental homes and availability also suggests that vacationers will need to book earlier than normal this year to secure a good fit.