Early Booking Trends
January always provides us with insight about the rental season ahead. By the end of the month, trends have emerged, and a significant number of bookings have been made. This year is no different as we see indications of another strong rental season in 2023.
Overall, 2023 Bookings fall short of last year, but they show significant growth from the pre-pandemic years.
Vacationer demand are similar to these booking numbers, with a 59% increase in vacationers inquiring in January vs 2019 yet a 22% decrease vs 2022.
The Repeat Vacationer
The growing vacation rental industry overall has continually brought new vacationers to the vacation rental home sector, especially during the pandemic. But one constant on the WeNeedaVacation platform has always been the valued repeat vacationer.
In 2022, 44% of vacationers inquiring about vacation rentals on WeNeedaVacation were repeat users. In comparison, repeat site users since 2013 ranged from 30-39% with the exception of 28% in 2020 due to the obvious turmoil during the first pandemic summer.
The repeat guest is like gold for every homeowner. But other vacationers who are also most likely to be well-suited for our homes are those who are familiar with both our platform and renting from Cape and Island owners in general.
Reasons for the Repeat Vacationer
Based on a vacationer survey in September 2022 with over 2,000 responses, here are the top reasons for using the WeNeedaVacation platform:
- The Search allows me to easily find a rental that is a good fit.
- The site charges no booking fees.
- It’s a local and trustworthy site.
- It provides the ability to easily communicate directly with the owner or manager prior to booking.
Given that cost is always a major factor for anyone planning a vacation, there has recently been greater focus on price transparency in the vacation rental industry. Vacationers want to know, in advance, what is included in a rental, including any additional fees. This enables them to easily compare the cost of properties.
There has already been a positive response from homeowners regarding the new ability on our site to clarify on their listing what, if any, additional fees they charge. In addition, we will soon be able to share with our owners information about what other owners charge in added fees. This will enable them to better and more easily set their pricing.
Prices over the past few years have risen at record rates. Instead of the typical 1-3% average increase, 5-10% or more have been observed on average.
Here’s a look at how rental rates for all three Cape and Islands regions have increased over the past three years:
|Location||’21 vs. ’20||’22 vs. ’21||’23 vs. ’22|
Initially, much of the increase could be attributed to the record demand in vacation rentals during the pandemic.
At the same time, fewer homes were on the rental market, and those that were had very little availability, due in part to owners using their homes more often themselves.
Here’s a current look at the percentage of homes with availability during each of the 10 weeks of summer. On average, the 10 weeks are about 5-9% more available compared to same time last year.
Inflation, and particularly energy and labor costs, have also compelled homeowners to raise their rates to cover their higher expenses.
Our recommendation: proceed with caution
The question is, will the higher rates impact bookings this year?
It’s only early February and too early to know for sure how well bookings across the Cape and Islands will do this rental season. Yes, demand is still significantly stronger than it was prior to the pandemic, but it’s cooled considerably from last year, and it’s not likely that we’ll ever see that kind of demand again.
So, our recommendation is to be cautious with your pricing. Even as demand is weakening and availability increasing, it’s fine to be somewhat aggressive early on in the booking season – but be watchful and careful. If you are not getting the inquiries and bookings you enjoyed at this point last year, don’t wait too long to adjust your prices.
Particularly if your rental property is on the Vineyard or Nantucket, as the season draws near, the number of vacationers seeking a home will wane due to the ferry situation. Thus, it’s more important than ever for you to fill your home early, or you may risk not being able to fill it completely.
And of course, don’t just raise your rates because others are doing so or your expenses have risen. It’s vitally important to research how your particular property compares to similar homes in your location. How much competition is there? Do they offer more amenities than you? Are they nearer the beach?
Be sure to read our previous post for more in-depth advice about how to price your home for the 2023 rental season.