Covid has had a significant impact on vacationer demand for short-term rentals. As that impact begins to wane, however, inflation, labor and housing shortages, higher wages, and energy costs now prevail. This season, travelers are facing significant financial and logistical challenges.
Fortunately, the Cape and Islands continue to present a very attractive option for them. In fact, some of the current conditions are actually continuing to propel demand from vacationers wary of overseas or long-distance travel, and for reasons other than the pandemic.
It does, however, create a need for rental homeowners to take a close look at their expenses this season to figure out exactly where their costs have increased. And then, try to determine: is it a temporary situation due to short-term supply chain or labor issues? Or is it likely to stay high? And can you pass along the price increases to your guests, or do you feel that you might be reaching a tipping point, risking your ability to fill your home fully for the season?
Homeowners are feeling confident
Historically, by this time of year, we see homeowners dropping their rates in order to fill remaining vacancies. Remarkably, however, homeowners haven’t reduced their rates on average at all so far. And this is despite the fact that there is more summer week availability at this point than there was last year. Looking at the most popular summer weeks (June 25 – August 27), the current average Availability % per Week is 15% compared to 10% at this time in 2021.
We do believe there will be homeowners who will need to drop prices for any vacancies, especially if they were aggressive in increases at the outset of the booking season.
What’s continuing to fuel vacationer demand
Vacationers are still not flocking to far-away destinations. In fact, despite improving Covid conditions, more Americans are expected to stay closer to home again this summer than expected.
According to travel technology company, Hopper, searches for round-trip flights from the U.S. to Europe have fallen an average of 9% below expected levels. Reasons include concerns about the costs of flights getting there, as well as worries about safety and energy shortages at the destination sites.
It’s not just financial reasons pushing vacationers to stay closer to home. A new MMGY Travel Intelligence study suggests 62% of U.S. travelers are so concerned about the war in Ukraine spreading to nearby countries that it’s affecting their plans to travel to Europe.
The vast majority of vacationers to the Cape and Islands arrive by car. Are the high gas prices expected to deter them? Apparently, not. In a recent survey, AAA found that as many as 42% of vacationers said they would not consider changing their travel plans regardless of the price of gas.
Despite recent rental price increases, spending a family vacation in a short-term rental home on the Cape and Islands excels at providing a safe, affordable, simple, natural, and fun experience for all ages.
Mitigating the demand
We’ve activated an extraordinary number of new listings this spring – nearly 100 per month for the past 3 months.
And the quality of the homes is improving every year. No longer do vacationers expect the simpler, rustic even, cottages of the past. The majority of new listings coming online are from folks who have recently bought or renovated a home for rental. So, vacationers’ expectations are much more demanding than in the past. This is important to keep in mind when considering your pricing. (Read more about our early pricing advice for 2022.)
What will the Cape and Islands be like this summer
In viewing our Events Calendar , it’s apparent that most of the events that were cancelled the past 2 seasons due to the pandemic will be back this year.
But your guests should be aware that, although things may seem back to pre-pandemic normal, they are not completely the same.
Lingering labor shortages, exacerbated on the Cape and Islands due to the housing crisis, are expected again to cause longer lines at shops, restaurants, events, etc. Businesses everywhere are displaying help wanted signs.
According to the U.S. Travel Association, employment in the leisure and hospitality sector is down by 8.7 percent since February 2020. Among 1.6 million jobs yet to recover, 1.5 million are in leisure and hospitality.
Restaurants will be crowded and some even closed several days a week due to labor shortages, and wait staff will be stretched. Your guests could be reminded to be patient and tip well. Those who are working are likely working well overtime and doing the best they can.
But the pandemic also created new opportunities. Many restaurants have provided more outdoor seating and improved take-out options.
And staying in a vacation rental home is the perfect solution for vacationers who can choose to eat in in comfort, safety, and privacy.
Managing a short-term vacation rental on the C&I is a lot of work, and homeowners have been faced with huge challenges and expenses over the past 3 years. But we are also fortunate to be able to provide such an attractive option to vacationers, allowing them to drive to their destination, dine in if they choose, and enjoy privacy and safety throughout their stay.