.png)
Vacation rental occupancy performance in Florida Panhandle markets has been slowing since the substantial increase in demand during the last couple of years. Though most professionals anticipated this eventual return to normal, we weren't quite sure how or when it was going to occur. Would occupancy decrease gradually over a years-long period, or would a switch flip causing a sudden decrease in occupancy?
Though at first glance it seems occupancy across the industry is in a dire situation after reaching record-high levels in 2021, occupancy figures are very close to 2019 levels. In markets where these figures are slightly below 2019, is this cause for significant concern? Booking activity and economic influence could have some impact on that answer.
Florida Adjusted Paid Occupancy
In all of these Florida markets, Adjusted Paid Occupancy rates for the summer season are below both 2021 and 2022 levels. From 2021 to 2022, there was a drastic drop in occupancy while the market adjusted to a release in pent-up demand, and this summer is pacing behind last year as well. 30A, Cape San Blas and Miramar Beach are all experiencing 9% decreases from last year; the largest of the markets above. In a majority of these markets, like 30A (-7%), Destin (-1%), Miramar Beach (-12%), Panama City Beach (-6%), Okaloosa Island (-3%), and Perdido Key (-3%), occupancy rates are also pacing behind 2019. In Cape San Blas and Pensacola Beach, occupancy rates are pacing on par with and 3% ahead of 2019, respectively.
Adjusted Paid Occupancy Rate Pacing
Just three months ago, 30A’s adjusted paid occupancy rate was pacing only 4% behind last year. Now, as of May first, Summer occupancy is pacing 9% behind 2022. The occupancy gap has continued to increase as bookings have slowed further, and medium booking windows may be to blame. Despite occupancy pacing behind, there is still time for these summer bookings to come in. In 2022, 51% of all reservations for summertime stays in the Florida Panhandle arrived within 60 days of booking, and 31% of summer stays checked in within 30 days of booking.
Florida Summer 2022 Reservations
When looking at Summer 2022 reservations by booking source and booking window, reservations made through Airbnb are the only segment that increased as a percentage of check-ins when looking at only reservations made within 30 days of arrival. 15% of all reservations made for summer stays were made on Airbnb, but if you look at reservations made with a booking window of less than 30 days, that percentage jumps to 22%. 38% of all reservations made for summer stays were booked directly, and 41% were booked through Vrbo. For reservations made within 30 days of checkin, the share of direct bookings shrinks to 31%, and Vrbo decreases only 1% to 40%. This propels the conclusion that reservations booked directly are made further in advance and that a greater number of cheaper, last-minute reservations are booked through OTA’s like Airbnb and Vrbo.
It is important to note that Airbnb is not responsible for driving people toward those cheaper stays, it is just the audience using that platform. To capitalize on these last-minute reservations for summer stays, property managers should ensure that their inventory is optimized for the channels they advertise on, and lean heavily into their marketing strategies.
All signs are pointing toward consumers being more price-sensitive than they have been in the past. Supply increases mean there are more choices for travellers, so property managers need to be acutely aware of the pricing in their markets, and adjust accordingly. However, simply decreasing rates in the face of decreased demand can drive RevPAR down further, leading to lower revenue. Well-executed marketing strategies and revenue management will become extremely important in upcoming months for obtaining those last-minute summer reservations.
Looking to stay ahead of the curve? See all the latest trends as they develop in your Key Data Dashboard. Click here to set up a demo with one of our dedicated team members.
