Before we look ahead towards the 2020 season, it’s important to review the results from 2019, as well as inquiry and booking trends, and, of course, the impact of the newly implemented short-term lodging tax.
The 2019 season almost started off with another reprieve from the addition of a lodging tax to vacation rentals in Massachusetts. But surprisingly, a lodging tax bill was passed during the last week of December, with little time to prepare for the tax or even get questions answered. Confusion ensued, including such issues as: what was and wasn’t exempt, when the tax needed to be collected, who should remit the tax, and how it would impact pricing. Dealing with any one of these questions is challenging enough, let alone doing so with this many at once.
Prior to the lodging tax law being passed, the fall of 2018 had seen a marked increase in inquiry numbers, including a record 44% increase in December over the previous year.
Some of this could be attributed to the final days of the year when savvy vacationers took the opportunity to book prior to January 1st . In addition, homeowners jumped at the chance to provide a financial incentive for prior guests to skip the lodging tax by booking before the end of the year.
The Lodging Tax Impact
Once January 1st arrived, all bookings for stays prior to July 1st were required to include the tax. But the impact was not immediately observed as inquiry totals increased by 7% in January over 2018, which was the highest total since 2013. Subsequent months, however, dropped around 9%, until a rebound was seen starting in June.
In addition to the lodging tax, other factors could have attributed to the drop during the late winter and early spring including:
- Trend of vacationers booking earlier, which reduced the number of vacationers booking during this time period
- More repeat bookings – vacationers, in order to skip the tax, booked prior to January or contacted the homeowner directly
Impact on Popular Weeks
Another impact of the lodging tax was seen when vacationers took advantage of the last tax-exempt week of the year. Any rental stay that started on or prior to Sunday, June 30th was tax-exempt. The last week of June is not typically one of more popular summer weeks, but this year was different. For the 2020 season, homeowners would be wise to offer some additional incentives to last year’s guests who stayed during this week to re-book the same week despite the fact that it will no longer be tax-exempt.
Vacation Rental Market Remains Strong for the Cape & Islands
With all of the ups and downs of the Booking Season for 2019, the overall inquiry numbers resulted in a -2% drop from January-August, and a -0.7% drop from January-October. It is quite possible, when all is said and done, that inquiries for 2019 will actually exceed 2018!
Our belief that the vacation rental market remains strong is due to the fundamental reasons why people vacation on the Cape & Islands. While the vacation rental industry has been dramatically expanding over the past decade, it has been part of the Cape and Islands fabric for generations. Our tagline is to Get Back to the Cape & Islands, and we’re confident that the generations-old draw to return is not going to change.
Some of our favorite quotes from guests this past year exemplify why they vacation here year-after-year and will continue to do so:
- Cape Cod truly is my happy place. I have been coming to the Cape since I was a child…It feels like a step back in time. It is familiar and quintessential small town New England. I feel more alive when I live by the rhythm of the tide and rise and setting of the sun. The light and air are just different there. It restores me.
- We travel all over the world, but it’s not a summer if we don’t go to the Cape.
- We’ve been going to the Cape for 37 years since I was 6 years old and now my children enjoy it as much as I did as a child.
Expectations for the 2020 Vacation Rental Season
We will continue to see vacationers planning earlier as they get a jump start on finding next year’s rental and ensuring that they find the ideal home and/or available week. From July through October, there has been a 36% increase in inquiries for the following summer 2020!
This underscores the importance of homeowners engaging with their past guests earlier than in the past. Homeowners can add incentives and build some urgency for past guests to commit to booking the following year. Delaying reaching out to past guests and adding pricing for 2020 until later will greatly reduce homeowners’ ability to take advantage of this growing trend.
No Booking Fees
Vacationers are becoming increasingly aware of the savings by booking direct through a platform like WeNeedaVacation. With our major competitors adding booking fees of anywhere from 5-20%, a significant savings can be found by using our site. While we promote this fact to our vacationers, we also encourage homeowners to continue to spread the word to their past guests, family, and friends!
How we can succeed together?
As we march forward together in this new normal, WeNeedaVacation sees the potential for a strong rental season by taking advantage of what sets our niche marketing platform apart from our major competitors.
Your role remains:
- to ensure your listing is consistent in quality and accurate, and
- to provide great service to prospective vacationers and to your guests.
We remain committed to allowing homeowners to control the booking process, to define their methods for communicating with potential guests, and to set payment options and schedules. This strategy will allow homeowners the ability to establish strong relationships with their guests, to ensure a good fit for them, and ultimately to result in more repeat bookings.
Thank you for this analysis, Jim. Very helpful to see the trends and plan my 2020 marketing, which is centered on the WNAV listing site. I have already received two new guest reservations through WNAV and I have had several inquiries from other prospective guests. The site is “jumping” for us . . . Many thanks for all you (and the entire WNAV team) do. It’s very much appreciated.
Why don’t you increase the area you advertise for rent. I have several waterfront places in Fairhaven. I have tried using you ( We need a vacation) but everyone that calls me presumes I am on Cape Cod
We cover the whole southeastern MA coast, Dennis, including the Fairhaven, Marion, and Mattapoisett area. Many rentals in this area do well because it tends to be quieter and vacationers like to avoid the bridges. You also have less competition than on other sites.
I absolutely loved your information and delivery. I am new ( again )to weneedavacation.com
and I love that vacationers aren’t charged a fee. What I hope, in the future is that you find a way to rate guests, like Airbnb does.
I want to mention that I credit MYSELF ( lol) with bringing May and September vacationers to Cape Cod. I have been renting my place since 2003 and started offering ‘reduced rates for couples” in those OFF months !for “couples” ($700/week for 3 bedroom) -and I was very successful. I’ve had people stay in my 3 season home- conservationists, families, businessmen, etc off season_ Christmas! because I have a wood burning stove even though I close my house down, etc.
I love that when I call, I talk to the business “owner”.
I’m sure you guys will keep up with the times- you are terrific I just had to tell you!
although the tax terrified me, I managed to eck out a very good season!
Thanks for your kind comments, Jeanne. I’m glad you felt this information was valuable.
And congratulations on having a very successful off-season! Your strategy to target couples, even with a 3-BR, was a perfect way to expand your potential vacationer audience.
Hope you continue to have great success!
One thing I am very happy about is that renters can find your site ( fingers crossed) and they will NOT have to pay those extra fees that homeaway, airbnb etc charge! ) I hope you will figure out to let folks now about yourselves!