The demand for short-term vacation rentals on the Vineyard for 2021 exceeded even last year’s record-breaking one. And exceptionally high early bookings suggest that the 2022 season might be at least as successful.
But Vineyard homeowners had, and will continue to have, a number of challenging issues to contend with while managing their rentals.
Only on MV
Although Vineyard homeowners experience all the same challenges faced by Cape owners and managers, they also have some unique issues of their own to contend with.
In the last 10 years, the growth of new housing has slowed, and year-round residents have increased 25%, from 16,000 to 20,000! There are now more year-round residents than seasonal ones, for the first time in 40 years. In fact, there are 1000 fewer seasonal homes on the Island than there were in 2010. In the summer, the population on the Island now swells to 200,000. That’s a tremendous drain on the Island’s infrastructure.
The Hiring Dilemma
Homeowners looking for a plumber, electrician, painter, or contractor lately is abundantly aware of the hiring dilemma on the Island. With the sharp rise in population, the demand for services is higher than ever – and there are fewer people to provide those services.
Part of the problem is that these tradespeople can’t find housing. Housing development on the Island is showing only a 2% growth rate at the same time that the inventory of existing affordable housing is decreasing dramatically. The median price of homes is now over $1M.
So, what can you do? Don’t wait too long to hire your “team.” We have a few suggestions in our Home Services Directory. And once you do have someone you can trust – treat them well! Their loyalty to you is worth a fortune.
The Ferry Situation
The ferry system faces numerous challenges. This year, the SSA significantly raised their prices, while, at the same time, their dependability decreased. Boats were often randomly cancelled for technical reasons. And more frequent weather events created many cancelled trips. Of course, the terminal construction in Woods Hole didn’t help.
And of course, the traffic has increased: On August 7 of 2021, the SSA reported that there were 9,000 more vehicle crossings thus far than by August 7 of the prior year. Hopefully, most of the terminal construction will have been completed by next year.
There’s not much you can do other than make every effort to fill your home as quickly as possible so that your guests can book their reservations early.
Despite these challenges, the 2021 Vineyard rental season was a success on all fronts.
Vineyard Demand 2019 – 2021
Let’s take an historical look at vacationer demand (i.e., inquiries).
The darker blue line above represents the number of vacationers inquiring about Vineyard homes in pre-pandemic 2019. It was a flat year, in part because of the new lodging tax, when suddenly Vineyard vacationers were asked to pay about 10-12% more than the year before for the same home.
The light blue line shows 2020 starting a little higher in January but then quickly plummeting to an all-time low when short-term rentals were banned due to COVID. And then, you can see the dramatic increase in June and July when the ban was lifted.
With 2021, the yellow line, you can see that demand started out high and maintained strong interest all the way into the fall.
The Dramatic Increase in Bookings
You can see that actual bookings in 2017, ‘18, and ‘19 were relatively consistent, with little change from year to year. But look at the dramatic increase in 2020: a 30% increase over the previous years, and then an additional 10% this past year.
So overall, this shows a 40% increase in bookings in 2021 over the ‘17-’19 years.
New Vacationers to Our Site
One reason for the tremendous increase in bookings is that, in the past several years, we’ve had tens of thousands of visitors to our site who had never used it before. In fact, we saw a 51% growth in the number of visitors in 2021 vs. 2019. This increase can be attributed to a combination of our marketing campaigns, the fact that we don’t charge vacationers a fee, and the huge increase in overall demand. The total increase translates to an 84% growth in the number of inquiries in 2021 over 2019.
Our goal, of course, is to bring those vacationers back to our site to find their home for next year — and they will come back, provided they had a good experience using our site and vacationing in your homes.
Prices have soared
This graph shows the price increase data on the Vineyard vs. the Cape and Nantucket. Looking at the blue bar, you can see that, on the Vineyard, prices rose about 3 ½% in 2020 over 2019. At the same time, you can see that prices on the Cape rose less than 2% and on Nantucket barely at all.
But then this past year, the orange bar indicates that prices on the Vineyard rose by a whopping 10%, with more modest increases of about 4% on the Cape and 3 ½% on Nantucket.
At least in the case of Nantucket, their average price has always been higher than both the Cape and the Vineyard, so it’s not surprising that their increases were more modest in the last couple of years.
Pricing Considerations for the Upcoming Season
Many Vineyard homeowners have raised their prices for 2022, particularly if they hadn’t done so for several years. And, of course, expenses have increased, especially cleaning costs.
What other homeowners are doing is interesting and even helpful up to a point. But what’s critical in terms of pricing your own home is that you are aware of your competition and of your own home’s value. Be sure that you’re not just raising your prices because you’ve heard that everyone else is doing it.
You should also reassess your pricing every year, rechecking your competition and noting how quickly you booked up the previous year.
And remember that, as prices increase, so do vacationers’ expectations of the homes they’re renting.
Looking Ahead to 2022
So, where are we going from here?
It’s always about supply and demand. On the supply side, we believe inventory will return to pre-2019 levels by 2022.
We’re seeing signs of homeowners returning to renting their homes after not renting for a couple of years. Many took a break due to the lodging tax and the pandemic but are now hearing about how successful rentals have become, and they want to get back in.
After two extraordinary seasons, the demand is bound to eventually weaken. So many more people are vaccinated, travel restrictions will presumably ease, and families will once again take more frequent vacations but of shorter duration. Despite this, we still think that demand for next summer will be very strong on the Vineyard.
In fact, this is already indicated by early booking numbers:
Early bookings for next year on the Vineyard were up over 100% over last year at the same time! And last year saw very active early bookings, too! So, these numbers are really impressive.
Even though our booking season is off to an amazing start, however, it doesn’t necessarily mean things won’t slow down in a few months.
It’s Well Worth the Effort
Managing a vacation rental home on the Vineyard can be challenging. In addition to the normal issues faced by all rental homeowners, Islanders these days have to contend with the increasing logistical and financial challenges of getting on and off the Island, as well as the difficulty of finding professionals to help with maintaining their homes.
But the best news is that the demand for Vineyard rentals continues to be tremendous, and the 2022 season is expected to be another record-breaking one.