2023 Annual Fall Report

The Post-Pandemic Era

We have reached a new normal in the vacation rental industry, with more vacationer traffic and bookings than pre-pandemic, but down from the frenetic pace of the pandemic years.  

Those of you who rented your home during the pandemic saw historic numbers of inquiries, and this at a time when the number of homes on the rental market was down. Now, however, the inventory is back up again to what it was in 2019, resulting in more competition for you. 

While the inevitable normalization has occurred, positive impacts of the pandemic remain as more vacationers have been introduced to vacation rental homes and the Cape and Islands as a destination, resulting in bookings above pre-pandemic levels. 

We’ve noticed a trend in the past few years in which vacationers are booking their rentals earlier and earlier. So, if you haven’t yet filled out your calendar for summer 2024, you may be missing out. Keep this in mind:  

More than a quarter of all bookings for the following summer occur by the end of the previous year! 

Pricing – Not an Exact Science

Pricing your home is nuanced and dependent on several factors, not the least of which is your past experience. Did you book easily by early in the year, or did you struggle and have to discount? Do you get a number of repeat guests? Have you made enhancements to your home? 

In tracking pricing trends over the last 25 years, we’ve typically seen a 2-4% price increase year over year. What we’ve seen since the pandemic began, however, are price increases of nearly 10%! The pandemic created a surge in demand. Even though demand weakened in 2023, prices continue to be very high by historical measures.   

See our full Pricing Report available to all active listers. 

Don’t be tempted to raise your rates because you hear that others are doing so or because your expenses have risen. Vacationer demand dictates rates, not owner expenses. Energy costs, labor, and materials have increased dramatically in recent years, but those alone do not justify a rent increase.  

It’s hard to predict if these higher prices will hold. We’ve already seen this past year that some owners lowered their in-season prices in order to fully book their homes. 

What drives pricing? 

Myriad factors contribute to the rental value of a home, including location, proximity to a beach or to water, bedroom count, air conditioning, and swimming pool.  

The designation of our rentals homes is: 

• Within a half mile to a beach 
• On the water (but not necessarily on a beach) 
• On a beach 
• Inland (none of the above) 

We note that homes on a fresh water beach average ¾ of the price of salt water beachfront homes.  

Air conditioning 

Homes with central air conditioning are on average 48% higher in price than those without air conditioning. Half of our homes have central air, while 12% have no air conditioning at all. Interestingly, the homes with a/c units do not seem to enjoy much of a price lift from those homes with no a/c at all. It appears that most vacationers are willing to pay more for central air but not for homes with units. 

Swimming pools 

Only 8% of our homes have a swimming pool. Because there are so few of them, they are priced 40% to 60% higher than those without a pool. Larger homes enjoy the largest price uplift. 

Additional fees 

The most common added fees are for cleaning, linens, and pets. Overall, 48% of homeowner listings have a cleaning fee. The other 52% include the turnover cleaning in the rental rate. Only 6% of listings have a linen fee, and 13% charge a pet fee. 

Vacationers can experience sticker shock when they see your initial rate and then learn that with an additional cleaning fee and the nearly 10-15% lodging tax, the ultimate price of your home is significantly higher than the rate posted on your calendar. If you have additional fees that apply to all bookings, it might be best to incorporate them into your rental rate to avoid having such a great disparity between your listed rate and your final price.   

Tiered pricing 

Keep in mind that while supply remains constant, not all summer weeks are in equal demand. The summer’s bookend weeks—the last week of June and the last week of August—generally command lower prices due to school schedules.  

On the Cape and Nantucket, the bookend weeks are priced 9% lower than the rest of the summer. July and the rest of the August weeks are generally equally popular. 

On the Vineyard, August is the most popular, while prices for July and the last week of August are a full 10% lower. The last week of June is 24% lower. 

Challenging Years 

At WeNeedaVacation, we feel it important that homeowners and businesses work together to foster an environment that helps one another out as the industry changes.  

You’ve had a lot to contend with in the past four years. First there was the lodging tax in 2019, followed by a global pandemic. Then, just as Covid-19 worries finally receded, the summer of 2022 brought issues of inflation and continued staffing shortages throughout the Cape and Islands region. Summer of 2023 was more of the same. 

But interestingly, we received a record number of guest reviews these past two summers. More than 98% were 4- or 5-star reviews, so kudos to you for providing such wonderful experiences for your guests. 

We often hear from homeowners that their best guests come from WeNeedaVacation. We’d love to take credit, but the truth is, it’s only because we allow you to do your job! When you have control over the booking process, there are fewer misunderstandings, more appropriate guests in your home, and a more positive experience for all involved. 

So, congratulations on another successful summer rental season. 

See our full Pricing Report available to all active listers.