Regional differences are always evident in the vacation rental industry; booking windows, rates, occupancy, and renter demographics all vary by destination. These variations have been magnified by the Coronavirus pandemic. The timing and magnitude of both the virus and government response have impacted travelers’ decisions to maintain reservations, book new ones, or stay at home. As the San Francisco Bay Area went into lockdown, Spring Breakers were still partying on Florida beaches. The Southeast and West Coast of the United States highlight these variations in the response of the industry to the crisis.
The first case of COVID-19 in the United States occurred in Washington state and was confirmed on January 21, 2020. Over the next few weeks, the virus spread slowly in Washington and California. In early March, the first cases in the Southeast were identified in Florida and Georgia. By mid-March, cases on both the West Coast and in the Southeast were growing exponentially. The five-week period between the case in Oregon and the case in Florida led to dramatically different responses from both the government and travelers.
As the timing of the coronavirus spread differed by region, so did the state-level responses. California’s governor was the first to issue a statewide stay-at-home order, which began on March 20th. Washington and Oregon soon followed suit, on March 23rd and March 25th, respectively. Louisiana was the first state in the Southeast to enact a statewide stay-at-home order on March 23rd as the virus spread rapidly in New Orleans. The governors of North Carolina, Virginia, and Tennessee issued orders a week later on March 30th. After attempting to maintain business as usual for as long as possible, the governors of Florida and Georgia made declarations on April 3rd, two weeks after California.
A decline in booking activity was an early sign of the Coronavirus’s impact in all vacation areas. On the West Coast, booking activity fell below last year on February 24th. In the Southeast, booking activity reached the same milestone a week later on March 1st. Both regions saw dramatic drops in reservations made per day between March 13th and 16th, as the President declared a national emergency, limited travel to Europe, and called for social distancing. By the end of March, booking activity was down approximately 85% for both regions.
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Unlike booking activity, which declined at a slower rate in the Southeast, the two regions experienced similar trends in cancellations. On March 9th, cancellations per day began to increase as the pandemic loomed. Cancellations spiked between March 11th and 13th as Disney World and Disney Land closed, the W.H.O declared a pandemic, and President Trump declared a national emergency. In both regions, cancellations peaked around March 18th and 19th when the number of cases in the U.S. passed 10,000 and California ordered a statewide lockdown. Cancellations continued to come in waves as other states announced closures and the virus spread. Renters have seemed to be very responsive to federal guidelines, even in the absence of state-level orders.
When looking at cancellations by dates of stay, there are similarities in the timelines for both regions. As of 4/3, cancellations will peak during the week of April 4th, which was many travelers’ spring break. The rate of nights canceled recovers in mid-June, but that may change as we approach those stays and learn more about the duration of social distancing and stay-at-home orders.
Cancellations and bookings have lagging and large effects on the occupancy rates. Like booking activity, occupancy dropped below 2019 a week later in the Southeast than it did on the West Coast. Renters took advantage of Florida beaches remaining open and traveled for spring break as planned. The Southeast occupancy rate is set to recover almost two weeks before the West Coast, even though the region has been a week or two behind the West Coast in almost every other respect. The longevity of the crisis and travelers’ eagerness to book last-minute trips will determine at what point destinations see occupancy rates on track with 2019.
The West Coast and the Southeast United States have decidedly different cultures, destinations, seasons, and attractions. Though these regional variations are apparent every year, the coronavirus pandemic has shown just how pronounced they can be. Trends in cancellations by date cancelled are similar between the two regions, while booking activity, cancelled nights by dates of stay, and occupancy pacing are a week or two apart. This reflects the coronavirus first affecting the West Coast and governors of those states being quicker to declare stay-at-home orders. Despite the differences, property managers and destinations in the regions are still facing the same challenges and should learn from each other, and their data, to prepare both for the crisis and the comeback.