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We revealed this month how the U.S. vacation rental market saw a 16.8% real terms decline in revenue per available rental (RevPAR) this summer.
But not all property managers are experiencing that sort of slowdown. This is an average figure for the entire United States, and no two businesses are the same when it comes to their actual short term rental investment performance.
How Does This Look In Reality?
The variation in investment performance in practice is a fantastic example of how high level data is great at signaling larger travel market trends but it’s not enough to shape a vacation rental marketing strategy.
For that, only local DestinationData will do because it’s very unlikely that your rentals match the national picture exactly.
Let’s Look At That Variation In Action
We pulled year-on-year data for the best and worst performing vacation rental markets across the U.S. between the beginning of June and the end of August (as of August 23rd each year).
There’s a huge gulf between the top and bottom performers but some locations have plenty to celebrate. Out in front was the city of Ector, Texas. Here RevPAR grew 29% and this compares with a 14.1% fall to $115 for the U.S. as a whole (not adjusted for inflation). It’s not immediately clear why the market did so well (no, Taylor Swift did not stop there on her Eras Tour), though a proactive STR business strategy will certainly have been a major contributing factor.
This will also be the case in the other areas we identified that outperformed over the summer, including Oconee in Georgia (14% RevPAR improvement), Virginia Beach, Virginia (+6%), Eddy in New Mexico (+6%) and Colorado’s Ouray (+5%). These all beat the rate of inflation so all show real terms revenue growth. It’s significant that Ector, Eddy and Ouray also climbed into the top 5 destinations for occupancy growth, each achieving a 9% rise year-on-year.
At the other end of the scale, the area most affected by America’s return to pre-covid norms in the STR market over the summer was Orleans Parish, part of what we know as the city of New Orleans. The area has experienced an annual 38% fall in RevPAR over the past three months and was closely followed by Travis, Texas (-34%). Less severe contractions were seen in Osceola, Florida (-27%), Hawaii (-23%) and San Bernardino, California (-23%). Again, it’s telling that both Orleans Parish and Hawaii ranked in the bottom five performers for occupancy. Orleans Parish recorded a 23% annual fall while Hawaii dropped 21%. The national average was a 6.5% decline compared with a 5.1% dip globally.
These real-life examples demonstrate how important it is for property managers to study localized STR market data to inform their budgeting and marketing strategies.
This information will also help you understand whether the changes you’re seeing, particularly if they’re hurting revenues, are part of a short term trend such as a cost of living squeeze or longer term shift that might mean your destination is beginning to attract a different type of guest.
If you want to learn how to use custom comp sets to gain these kinds of insights, ask for a demo of our Key Data Dashboard.
