.png)
2023 brought about a resurgence of trends that we had come to expect 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 April, calendar occupancy was 5% lower than in 2023, and 10% lower than in 2022. According to our same-store property manager direct data from 2022 to 2023, guest nights booked 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 through June, calendar occupancy is only pacing slightly behind last year; by 1% in both May and June. However, July calendar occupancy is pacing on par with last year. This is an extremely optimistic outlook, as vacation rental professionals have been awaiting stabilization since post-pandemic. This suggests we may finally be returning to pre-pandemic trends. As we head into the peak summer season, ensure your marketing and rate strategies are optimized to optimize RevPAR!
Average Daily Rate
Rates are trending upward for the summer season.
ADR = Total Unit Revenue / Nights Sold
In April 2024, daily rates were $263, $12 lower than last year and $30 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 May through July, 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, to encourage longer booking windows, drop 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 declined because occupancy decreases have outweighed rate increases. At $76 per active property per night in April 2024, revenue decreased by $15 from April 2023, and $31 from April 2022. Looking forward, RevPAR is pacing behind last year slightly in May, and by more in June (-$6) and July (-$7). Moving forward, to help maximize revenue, use your Key Data Feeder Market reports. These reports show users the markets that 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 are pacing behind last year’s occupancy rates. The Southwest U.S. (+0%) and Midwest U.S. (+2%) are the only regions above that are pacing alongside or ahead of last year. The Western U.S. and Rocky Mountain States are experiencing the smallest decreases, -2%, while the Southeast U.S. and Mid-Atlantic States are seeing the largest decreases (-6% and -7%, respectively) outside of the Hawaiian Islands (-17%). As we still have about a month and a half left in Q2, there is still plenty of time to capture bookings for Q2 stays. Property managers can focus on their short-term booking strategies, by targeting guests on OTAs who book with shorter booking windows or offering a discount to stay.
Q2 2024 Average Daily Rates
Regional rate performance is mixed so far in Q2 2024. However, most regions' rates are pacing higher than in Q2 of last year. The Southwest U.S. (+7%) and New England (+10%) regions are booking rates with the largest increases over last year, while the Southeast U.S. (+1%), Mid-Atlantic States (+4%), and Midwest U.S. (+5%) are all booking marginally higher than last year. The Rocky Mountain States are not seeing a change in year-over-year rates, while the Western U.S. States are seeing a slight decrease in booked rates of 1%.
Q2 2024 RevPAR
Even with varied performance in rates, most regions saw decreases in year-over-year RevPAR. The Midwest U.S. (+1%) and the New England States (+4%) are seeing RevPAR pacing ahead of last year, due to increased rates. The Mid-Atlantic States and Southwest U.S. are seeing moderate decreases in RevPAR of 2%. The remaining regions are pacing between 6% and 9%, with the Hawaiian Islands pacing 29% behind.
State of the U.S. Economy
The inflation rate in the United States rose to 3.4% during February; up 0.3% from March 2024, but down 0.1% from April 2023. In short, Americans are paying an average of 3.4% more for goods and services than in February of last year.
Gasoline costs increased by 2.8% from March to April 2024, and Airfare increased by 0.8% from last month, following a 0.4% decrease in March.
Key Data’s Peak Summer Season Pricing Tip
Maximize Revenue by Capitalizing on Major Events
Pricing for major events and holidays is a delicate balance but can be highly lucrative if done correctly. With holidays like Memorial Day and July Fourth coming up, along with Comic-Con in San Diego, California, and Lollapalooza in Chicago, Illinois, these events will draw millions of people to your destination. Are you leaving money on the table? The goal is to optimize RevPAR, not just achieve high occupancy or increase your rates.
Understand where your guests are coming from, and which guests to target
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.
Use your distribution channels wisely
In the United States, bookings made directly constitute the majority of guest bookings. Additionally, bookings made Directly and through Vrbo command higher rates, have longer stay lengths, and longer booking windows than the other channels. However, to fill last-minute, unoccupied units or orphan nights, bookings made through Airbnb have shorter booking windows. Utilize your booking source information to create an effective rate strategy for your properties.
Push prices during high-demand periods
During Super Bowl 2024, Property Managers in Las Vegas, Nevada were able to increase their RevPAR by 95% over the same period the previous year. During high-demand periods, rates should be increased to help drive RevPAR, especially during off-season periods.