As the new year (and decade!) has arrived, many vacation rental homeowners are assessing their marketing strategy for the next rental season. Naturally, they’re also anxiously awaiting the impact of the short-term lodging tax on this first full rental year of implementation.
The key question homeowners have expressed is whether the lodging tax will drive vacationers to go elsewhere for their summer vacation.
Our take is that vacationers will continue to get back to the Cape & Islands as they have done for generations – and the strong inquiries and bookings reported so far are driving our optimism.
2019 Wrap Up
We’ve been observing a growing trend over the past few years for a higher volume of inquiries for the following summer occurring during the fall months through December. This year ended no differently.
Increases were seen every month, including large increases in both November and December, compared to previous years. The only difference, as expected, was a slight decrease in December this year. This was due to the announcement of the lodging tax on December 28, 2018, when many vacationers raced to book during the exemption period.
Overall, at the close of 2019, inquiries for the year were only 1% below the 2018 season.
We all know the value of a repeat guest – they are familiar with your home and are most likely to take good care of it and leave positive reviews. Repeat guests also allow a homeowner to fill up some weeks early in the season, reducing the number of new guests that are needed.
So, with the increase cost of the tax to a repeat guest who was exempt from the tax last year, what are you willing to do to keep that guest? Especially if the repeat guest stays with you outside of the peak summer season, you may want to consider adding an incentive. This could be anything from reducing the rate by a percentage to mitigate the tax, reducing the rate if the booking is confirmed by a certain date, or offering any other perks such as arrival or departure flexibility, linens, etc.
Will some guests still balk at the tax? Of course! But your goal, as it is every year, is to retain as many of these repeat guests as possible. (Read more about reaching out to past guests.)
Hopefully, many of you have already reached out to your past tenants, but if not, the time to do so is now!
Are people vacationing elsewhere?
There’s a common misconception that people will decide to vacation somewhere else because of the tax. But remember that short-term rental taxes are new to Massachusetts but not to the US. In fact, Massachusetts was actually the last state in New England to adopt a short-term lodging tax.
While we have observed the strong growth in inquiries in the fall, all eyes now turn to the activity after the holidays. Like clockwork, every year after Christmas, there is a noticeable increase in traffic and inquiries (both seeing an increase of over 200%).
Here’s what Google Search Trends is reporting over the past week for both direct searches to our website and for Cape Cod rentals. And similar Google Search Trend reports were seen for Martha’s Vineyard and Nantucket rentals earlier in December.
Expectations for 2020
One of our favorite quotes:
We hear this type of comment all the time from users of our platform and on social media. The family vacation, family reunion, or weekend getaway are all types of traditions that people have established and want to ensure continue every summer.
With traffic trends pointing in the right direction and inquiries and bookings on par with prior years to kick off the new year, signs point to a strong interest in travel to the Cape & Islands. We will continue to monitor these trends and do everything we can to steer vacationers towards your rentals.