As we head round out 2024 and look back on the performance of the United States vacation rental industry, it becomes apparent that this year was a continuation of the “return to normal” post-COVID. Occupancy has been slightly lower than in 2023 due to increasing supply and softening demand. Rates and RevPARs have fluctuated between slightly higher and slightly lower than last year, partially due to inflation and decreased demand. With supply growth slowing and demand stabilizing, we are headed into 2025 with a positive outlook.
U.S. Vacation Rental Performance
Calendar Occupancy %
Vacation Rental occupancy is pacing similarly to 2023 as we close out 2024.
Calendar Occupancy % = (Nights Sold + Owner Nights + Hold Nights) / (Total Nights)
In November, calendar occupancy was 1% higher than in 2023 and only 1% lower than in 2022. However, if we account for owner and hold nights, November paid occupancy finished at 24% in 2024, the same as in 2023. This suggests that hold occupancy drove calendar occupancy higher year-over-year.
Looking forward through December, both calendar and paid occupancy are pacing 2% behind last year. When supply growth outpaces demand growth, occupancy decreases, though our data indicates that supply increases are starting to slow down slightly. Since paid occupancy is pacing behind last year, we have not yet hit the point where supply and demand have stabilized but may be close. Holiday periods are full of opportunities for occupancy and revenue, so adjust your marketing and channel distribution to capture last-minute stays.
Average Daily Rate
Rates are fairly consistent with 2023.
ADR = Total Unit Revenue / Nights Sold
In November 2024, daily rates were $244, $1 lower than last year and $13 lower than in 2022. While supply growth has slowed in 2024, the increase in supply still outweighs the increase in demand, causing lower occupancy rates and driving pricing power down. Additionally, with more options and high inflation, consumers are more price-sensitive than they used to be. Through the past few months, rates were mostly on par with last year’s.
For December, rates are pacing slightly higher (+$1) per night than last year. 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, especially for holiday stays.
RevPAR
RevPARs are pacing behind last year, a trend that has stayed consistent since September.
RevPAR = Occupancy x ADR or Total Unit Revenue / Total Nights in a given period
RevPAR has been declining because slight rate increases have not made up for sluggish occupancy rates. November RevPAR was only slightly lower than last year at $59 per active property, a $1 per property decrease. During December, RevPAR is pacing $6 behind last year, due to paid occupancy that is pacing behind. For the Christmas and New Year holidays, try to keep last-minute rates steady to capitalize on the demand you can capture.
U.S. Regional Vacation Rental Performance
Q4 2024 Calendar Occupancy %
In Q4 2024, calendar occupancy performance is mostly positive. The Midwest U.S. (+4%), Hawaiian Islands (+2%), and Southwest U.S. (+1%) are all seeing positive year-over-year calendar occupancy, while the Rocky Mountain States, Southeast U.S., and Western U.S. are pacing on par with last year. The Mid-Atlantic States and New England are seeing marginal decreases in calendar occupancy (-2%) during an off-peak period.
Though calendar occupancy paints a nice picture of Q4 occupancy, for the majority of these regions, the paid occupancy KPI is not as positive. The Hawaiian Islands (+5%) and the Mid-Atlantic States (+4%) paid occupancy figure is pacing positively, but most of the remaining regions have paid occupancy pacing between 3-7% behind last year. Since paid occupancy is pacing behind but calendar occupancy is pacing ahead, this indicates that non-paying occupancy is pacing higher than usual.
Q4 2024 Average Daily Rates
Like occupancy, regional rates vary so far in Q4 2024. The Midwest U.S. (+9%) and Mid-Atlantic States (+6%) are booking rates with the largest increases over last year, while the Southwest U.S. (+2%), New England (+1%), and the Rocky Mountain States (+0%), are booking rates similar to last year. The Hawaiian Islands are the only region booking rates significantly (-7%) lower than last year, likely contributing to their higher occupancy rates, while the Rocky Mountain States (-2%) and Western U.S. (-1%) are booking rates lower than last year. These two regions should increase their rates for stays during the holiday season to maximize revenue.
Q4 2024 RevPAR
Even with some regions’ increased rates, almost all regions saw decreases in year-over-year RevPAR. The Rocky Mountain States (-7%) are pacing furthest behind in RevPAR during their peak season, while the Southeast U.S. and the Western U.S. are seeing 5% decreases in RevPAR. The remaining regions are pacing 1% to 2% behind last year. Q4 can be one of the most lucrative periods for most property managers in the United States as we enter shoulder seasons for beach markets and peak season for ski markets, so be sure to pay close attention to your occupancy figures and rate strategies.
State of the U.S. Economy
The inflation rate in the United States increased to 2.7% during November; increasing 0.1% from October. In short, Americans are paying an average of 2.7% more for goods and services than in November of last year. Increases starting in October 2024 are the first consecutive month-over-month increases since March 2024.
Gasoline prices increased 0.6% from October to November during a holiday period. Airfare increased 0.4% from last month, ending 4.7% higher than in November 2023.
Trends 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 American travelers collected in November 2024.
Gen-Z is still booking travel for Christmas
For Christmas, almost 30% of American travelers have a trip planned for the holiday. Interestingly, there is an uptick amongst Gen Z travelers, with 40.9 percent saying they now have a Christmas trip planned, up +8.2 points month-over-month. This could be because young travelers are going home to visit their parents. Christmas trips remained flat amongst Millennial travelers at 35.9 percent. Gen X (28.3%) and Baby Boomers (23.1%) remain notably less likely than younger travelers to have Christmas holiday travel plans in place.
According to these findings, you still have time to capture bookings for Gen-Z travelers! Make sure your marketing strategies and booking channels are optimized for this audience and booking window.
Millennials are most likely to travel for New Year’s
Looking ahead to New Year's, 11.7 percent of American travelers surveyed currently have trips planned specifically to ring in 2025, with Millennial travelers (19.9%) leading Gen Z (14.5%), and fewer than one in ten Gen X (9.7%) or Baby Boomers (6.4%) reporting that they will travel for the New Year holiday this year.
Looking for property managers’ industry sentiments as we head into 2025? Click here to download our 2025 Vacation Rental Industry Outlook!