As the 2024 Summer Olympics in Paris approaches, vacation rental property managers in the city are facing a unique challenge that exemplifies broader industry trends. While visitors have booked more total nights in the region over the course of the Summer Games, property managers are seeing lower occupancy rates due to a surge in short-term rental inventory for peak Summer dates. This dip in occupancy amid rising supply reflects a larger pattern that property managers must learn to navigate as the rental market becomes more saturated across destinations worldwide.
One of the biggest obstacles in a crowded short-term rental marketplace is maintaining healthy occupancy rates because when supply increases in a saturated market it can be difficult to fill the extra units available.
Let’s take a look at the Paris occupancy rates for the dates of the 2024 Olympics and see what it can tell us about market trends. The first day of the Paris Olympics, July 26th, 2024 had 12,295 nights sold, compared to 9,144 in 2023.* However, the 2024 occupancy rate for that day was only 15% in 2024, compared to 21% the previous year. With just 15% occupancy in 2024 compared to 21%, it’s clear that the number of available properties in Paris is increasing substantially. This trend of lower occupancy and higher nights sold continues similarly through August 11th, the final day of the Summer Olympics, where occupancy is pacing at only 11%, compared to 15% the previous year.
So, what can savvy managers do to boost their business when competition is fierce? Here are three key strategies exemplified in Paris that can resonate globally for those facing high levels of competition in their market:
1. Benchmark Against Competitors
To remain competitive, it's crucial to keep a close eye on your local market and how your properties measure up to the competition. With tools that provide multi-market competitor benchmarking, you can see exactly how your occupancy rates, pricing, reviews, marketing impact, and other metrics stack up against nearby rentals. This data allows you to make informed decisions to outperform the area's averages. By creating a customized dashboard with key metrics like your daily rates, occupancy, RevPAR, and booking window, you can identify where you stand against competitors and adapt as needed.
In Paris, monitoring the averages across the city's rentals can illuminate whether your properties are achieving maximum occupancy and revenue. If you're underperforming, you can adjust rates, update listings, or enhance marketing to better align with top-performing units.
2. Evaluate and Adjust Rates
An influx of rental supply can create a more competitive landscape on rates as property managers undercut each other. It's essential to monitor your pricing against the overall market and identify strategic windows to discount rates and increase bookings. By understanding your booking lead times, you can see when occupancy begins to dip and apply promotions or discounts to capture renters before they look elsewhere. An accurate picture of supply in your area will also assist with this.
For example, data may reveal rentals in Paris are being booked 6 months in advance for summer travel. If your bookings for August are lagging behind competitors' successful rates, a limited-time discount could be an effective tactic to fill the remaining vacancies.
Be sure to segment your analysis by property type so you can tailor and optimize pricing for different bedroom counts, amenities, and other factors to maximize revenue.
3. Optimize Minimum Stay Requirements
Travel trends and guest preferences are constantly shifting based on seasonal patterns, holidays, large events like the Olympics, and other variables. To maximize occupancy, property managers must keep a pulse on how their target demographics want to travel and stay flexible on booking requirements like minimum night stays.
For example, if your data shows many guests are seeking long weekends or 5-night stays in Paris around the Olympics, but your minimums requires week-long bookings, you may miss out on significant revenue. Being able to ease minimums during need periods while increasing them for peak demand can improve occupancy rates.
Continually analyzing booking lead times, guest origins, and preferences, and adjusting minimums accordingly can help capture renters you'd otherwise turn away.
While the competitive rental landscape in Paris may seem daunting approaching the 2024 Olympics, proactive managers can leverage data and strategic thinking to stay ahead of the market. Those who maintain rigorous benchmarking, nimbly optimize rates and policies, and cater to evolving traveler demands will be well-positioned to capitalize on temporary surges in guest arrivals.
The challenges unfolding in Paris exemplify the type of occupancy obstacles property managers worldwide should prepare to navigate. As accommodation options grow in many markets worldwide, employing sophisticated yield management tactics will be critical to avoiding empty nights on the calendar. By heeding the lessons and strategies emerging from the Paris rental ecosystem, property managers in other destinations can get ahead of the competitive curve and help ensure their businesses thrive.
*Scraped data as of 5/25/24