COVID-19’s Impact on Vacation Rental Demand
From the onset of the coronavirus pandemic in March and throughout the spring, there was significant doubt about whether a summer rental season would be salvageable for Cape Cod, Martha’s Vineyard and Nantucket owners. Prospects became brighter, however, as the virus became more under control in the region and Governor Baker announced a 4-phase re-opening plan in May. A huge surge of activity followed, and inquiries and bookings immediately hit record highs. Upon the re-opening of rentals on June 8th, activity increased upwards of 3 times the previous year, remaining at record levels throughout the summer.
While homeowners benefited from the boost in demand and rental activity, we must also remind ourselves of what this time meant for our guests. After dealing with lockdowns, school closings, and all the uncertainties of the pandemic, vacationers were looking for an escape, and a simplified Cape & Islands vacation provided just that opportunity and to do so safely.
One guest appropriately summarized how many felt this year:
2020 Summer Bookings and Availability by Week
A typical summer usually has a bell curve in demand with late July and early August being the peak weeks. In addition, due to school schedules, the early and late parts of the summer are known to be harder weeks to fill.
This summer, all rental weeks were filled consistently each week, nearly selling out completely. Demand was such that last-minute cancellations would often re-book within a day if not hours.
Overall, rental inventory levels were down about 12% from 2019. We believe this is primarily due to owners deciding not to take the risk of renting during COVID-19, as well as having to deal with the additional safety measures and restrictions. Some other owners scaled back the number of available weeks in order to rent every-other-week.
Summer 2020 Bookings by Region
The result was a 26% increase over 2019 in bookings for the summer season.
|2020 vs. 2019
Vacationer Mindset for Next Year
What will be the long-lasting impact of COVID-19? Will rental demand remain at record levels? Will guests wait to make plans again to see what happens with the pandemic, or will more guests make advance plans? Will we see a higher number of repeat guests or requests for extended stays?
Although there are many questions and unknowns, our prediction is that we will observe another year of extremely high demand, which will include higher demands throughout the shoulder seasons as well.
The high demand will not come from a single type of vacationer, but rather multiple sources.
- Families will continue to book a safe and local vacation.
- People who continue to work from home will use the opportunity to work from the Cape and Islands. Same is true for remote-schooling families and college students.
- Long-term demand, multiple weeks or monthly, will continue to increase.
Booking long-distance travel is riskier during the pandemic. Instead, vacationers will look for lower –risk, more local vacations with the added comfort of returning to a familiar place.
Part of the WeNeedaVacation mantra speaks to this desire to visit the Cape & Islands:
The pandemic also had another impact on the industry by introducing vacation rentals to many new travelers. With concerns over public and shared spaces, vacation home rentals provided an opportunity to vacation in your own private space, which hotels and inns could not provide. Many vacationers realized this opportunity to come together with family, hang out on a deck, patio or yard, and cook their own meals in a safe and relaxing environment.
Our website traffic demonstrates this increase in new visitors across numerous sources:
New Users 2020 vs. 2019
- New Users Overall +86%
- Organic Search +123%
- Direct +104%
- Social Media +55%
- Referral (links from other websites) +21%
Overall, there was a 129% increase in new vacationers inquiring on our site this year (Jan-Aug) compared to 2019.
There’s no doubt that many of these new vacationers in 2020 will be returning next year.
The popularity of the fall season is no longer a surprise to many, providing an opportunity to extend the summer (or “second summer” as coined by the Cape Cod Chamber of Commerce) with warm weather, cool nights and fewer crowds. With delays in school re-openings and remote learning, and many people still working from home, the high demand from the summer has stretched right into the fall.
Fall Booking numbers comparing 2020 vs. 2019 as of September 1
|2020 vs. 2019
Over the last several years, early bookings for the following summer have been on the rise. This summer, however, many vacationers had challenges in finding their ideal rental home or rental week given the high demand. As a result, some vacationers will likely make their plans further in advance, spreading out the flurry of activity observed in a more concentrated fashion this summer.
In our recent virtual homeowner meeting, over 50% of the attendees had already booked repeat guests. This, and the fact that some vacationers deferred their 2020 vacations to 2021, has helped to increase these early booking numbers for summer 2021 even further.
Bookings for 2021 vs. 2020 (as of September 3)
|2021 vs. 2020
Pricing for 2021
Pricing is always a key factor in marketing your rental, and the sooner your availability and pricing for 2021 are set, the more exposure your listing will get. Note that over 70% of inquiries next year are on listings that have their pricing already set. So, those listings that do not show pricing and availability for next season will be much less likely to receive early inquiries. Learn more about pricing strategies for 2021.
One hesitation for some vacationers will be the unknown about their ability to travel next summer, whether it be due to the state of the pandemic or their own personal health. Defining a relaxed cancellation policy will greatly help assure vacationers that they can book a rental, especially if it’s far in advance.
Things to consider are whether you will provide a full refund for a certain amount of time (e.g., 90 days after booking) or up until a certain date (e.g., 2 months prior to arrival), and whether special consideration will be given for travel impacted by COVID-19.
These policies may also change over time. You might, for example, want to give a vacationer confidence to book now with a 90-day refund policy, but relax or remove that policy for new bookings as you get closer to the summer season.
As with this summer, COVID-19 will weigh heavily on vacationers’ minds. What if there is a rental ban in Massachusetts or restrictions from their state or country? What if someone in their party contracts COVID-19? Would you be willing to refund them in full? If the demand is anywhere near this summer’s, it is likely that owners will be able to re-book their home on short notice.
Ultimately, you need to define a policy that works best for the management of your rental, yet keep in mind that flexible policies can help attract more inquiries and bookings.
Get Back to the Cape & Islands
While no one knows exactly what next year will bring, we know that vacationers will continue to get back to the Cape and Islands – as they have for generations.
The impact of COVID-19 on the travel industry was immense this season. And it will likely precipitate many changes to both how vacation rentals are managed and to the expectations of vacationers.
Read more about the Top Takeaways from the Summer of COVID.