2023 brought about a resurgence of trends that we had expected pre-COVID. However, in returning to “normal,” we saw year-over-year declines in occupancy, RevPAR, booking windows, and stay lengths. So far, we anticipate that 2024 will follow similar trends. How do these high-level trends break down? Let’s take a closer look.
U.S. Vacation Rental Performance for the Last Three/Next Three Months
Calendar Occupancy %
Vacation Rental occupancy continues to decline from 2023 and 2022.
Calendar Occupancy % = (Nights Sold + Owner Nights + Hold Nights) / (Total Nights)
In June, calendar occupancy was only 2% lower than in 2023, and 7% lower than in 2022. According to our same-store property managers’ direct data from 2022 to 2023, guest nights increased by 2% while supply increased by 11%. When supply growth outpaces demand growth, occupancy decreases, though our data indicates that supply increases are starting to slow down slightly.
Looking forward at July, calendar occupancy is pacing 3% behind last year, and 7% behind 2022. However, August calendar occupancy is pacing alongside last year, and September is pacing 2% ahead of last year. This is an optimistic outlook, as vacation rental professionals have been awaiting stabilization post-pandemic. This suggests we may finally be returning to pre-pandemic trends, and that the gap is starting to decrease between supply and demand as they become better balanced. As we head into the peak summer season, ensure your marketing and rate strategies are in line to optimize RevPAR!
Average Daily Rate
Rates are trending upward for the summer season.
ADR = Total Unit Revenue / Nights Sold
In June 2024, daily rates were $367, $3 higher than last year but $26 lower than in 2022. During 2023, increased supply caused property managers to face more competition, and pricing power declined in the face of lower occupancy rates. With more options and high inflation, consumers are more price-sensitive than they used to be.
For July through September, rates are pacing higher than last year. However, expect to see average rates decrease as you move through the booking window. Bookings made earlier tend to be for larger units at higher prices. As we move into the summer vacation stay period, try to encourage longer booking windows by dropping rates earlier instead of at the last minute.
RevPAR
Varied occupancy and rate performance lead to decreased RevPARs.
RevPAR = Occupancy x ADR or Total Unit Revenue / Total Nights in a given period
RevPAR has been declining because occupancy decreases have outweighed rate increases. At $160 per active property per night in June 2024, revenue decreased by $6 from June 2023. Looking forward, RevPAR is pacing $15 behind last year in July, but only $3 behind in August and September. Moving forward, to help maximize revenue, use your Key Data Feeder Market reports. These reports show users where their guests are coming from, as well as KPIs like daily rates, RevPAR, guest stay value, and more.
U.S. Regional Vacation Rental Performance
Q2 2024 Calendar Occupancy %
In Q2 2024, most regions' occupancy figures finished behind last year’s. The Southwest U.S. (+1%) was the only region to increase occupancy over last year. The Midwest U.S. (-1%), Western U.S. (-2%), and Rocky Mountain States (-3%) are experiencing the smallest decreases, while the Mid-Atlantic States are seeing the largest decreases (-6%) outside of the Hawaiian Islands (-13%), who are dealing with rental regulations and damage from the wildfires in 2023. Q3 can be one of the most lucrative periods for a majority of the property managers in the United States, so be sure to pay close attention to your occupancy figures as we move through the remaining summer months.
Q2 2024 Average Daily Rates
Regional rates have mostly increased over the last year in Q2 2024. New England (+5%), the Midwest U.S. (+4%), and Southwest U.S. property managers are booking rates with the largest increases over last year (+4%), while the Rocky Mountain States, Southeast U.S., and Western U.S. booked rates similar to last year. The Hawaiian Islands are the only region booking rates significantly (-11%) lower than last year.
Q2 2024 RevPAR
Even with increased rates, most regions saw decreases in year-over-year RevPAR, though mostly slight. The Rocky Mountain States (-7%), Southeast U.S. (-4%), and Western U.S. (-3%) are seeing the largest year-over-year decreases in RevPAR. The Southwest U.S. (+0), Midwest U.S. (+1%), and New England (+1%) regions all saw RevPAR perform alongside, or slightly ahead of, last year.
State of the U.S. Economy
The inflation rate in the United States declined to 3% during June; after finishing at 3.3% in May. In short, Americans are paying an average of 3% more for goods and services than in June of last year. On an annual basis, consumer prices are increasing at their slowest pace since June 2023, matching the lowest annual rate since early 2021.
Gasoline prices fell 3.8% from May to June, which follows a 3.6% decline the prior month. Average U.S. pump prices fell to $3.48 a gallon as of July 1, down from $3.52 on June 3, and
gas prices are down 2.5% since June 2023. Airfare also decreased by 5% from last month, following a 3.6% decrease in May.
A Trend to Keep an Eye On
Destination Analysts is responsible for independent research that is not sponsored, conducted, or influenced by any advertising or marketing agency. The key findings below represent data from over 4,000 Americana travelers collected in May 2024.
The Summer Travel Season Continues to Look Promising
As we head into July, let's take a look at where the remaining summer months stand. Last month, 73.5% of American travelers said they were likely to take at least one trip between June and August. With just July and August left in the season, over half (50.7%) of American travelers said they have a trip planned during either of those months. These mid- to late-summer travelers are more likely to be Gen X (54.5%) or Baby Boomers (53.8%), while just under half of Millennials (46.9%) and just over a third of Gen Z (35.9%) have a trip planned in July or August.
Looking further into these travelers who still have trips planned for the remaining months of summer, these are - unsurprisingly - more likely to be higher-income households, with six in ten of travelers with an income over $200k (61.6%) saying they currently have travel on the calendar for July or August. The majority of households with an income between $100k-$199k (57.6%) also will travel during these months, while fewer than half of those with an income of $50k-$99k (49.0%) or less than $49k (43.7%) said the same. Parents of school-aged children (54.1%) are slightly more likely than other travelers (49.3%) to report having any trips planned for the remainder of the summer season. Do you know where to market your properties? Do you know who your target guest demographic is? Not all guest's budgets are created equal, so optimize your marketing budget by targeting your highest-paying guests.
