Summer 2021 Review: Leisure Vacation Rentals Exceed Expectations

Summer 2021 Review: Leisure Vacation Rentals Exceed Expectations


For many vacation rental owners and managers in the United States, the 2021 summer season has likely been the most profitable they have ever seen. Although the summer performance of 2020 varied considerably from destination to destination – the luxury and leisure in-car markets flourished as urban areas continued to struggle – summer 2021 brought growth to almost all of them. American destinations.

In 2021, pricing power increased as demand increased, and prices increased accordingly. In the most popular leisure destinations, every canceled reservation was quickly replaced by a new one.

As is always the case, the magnitude of growth varied across regions and cities. While some key performance indicators (KPIs) – like occupancy and average daily rate (ADR) – followed similar trends in most countries, other KPIs – like the average booking window – differed.

Let’s recap the 2021 summer season using data from professional property managers nationwide. The following datasets represent approximately 391,000 properties managed by 2,360 vacation rental management companies.

Adjusted paid occupancy: June 1 to August 31

The adjusted paid occupancy rate (occupancy) measures the number of guest nights among the nights not used by owners or held back.

In the United States, the national average increased 22% between 2019 and 2021, and the summer 2021 occupancy rate was 72%.

Among the regions presented here, California saw the largest increase with 43%. Even more exciting is the recovery and growth in rentals in Hawaii, where occupancy was extremely low last summer (2020).

Mountain destinations like Colorado (+ 27%) and the Southern Appalachian (+ 26%), a region that includes northern Georgia, western North Carolina, and the Tennessee Smokies, also scored good results.

The coastal Gulf and South Atlantic markets have experienced slightly lower growth year over year, but this is most likely a factor as summer occupancy is generally quite high in these areas.

The growth in the overall occupancy rate reflects the increased demand for vacation rentals that has occurred over the past year and a half.

Average daily rate (TQM): June 1 – August 31

The increase in the Average Daily Rate (ADR), which is the average rental income generated per night, has been one of the most amazing trends of the summer.

A variation of +/- 5 percent of ADR nationally can be considered normal. For example, between 2018 and 2019, summer ADR increased by 2%. Amid the recovery of COVID, summer ADR fell 2% from 2019 to 2020. But from summer 2019 – which we use as our last ‘normal’ year until summer 2021, the national ADR increased by 16%.

Although the rates were almost uniformly higher than in 2019, the extent to which they increased has varied.

The southern Appalachians saw the largest year-over-year increase of 36% from 2019.

Their beach counterparts on the South Atlantic coast, which stretches from the Florida Keys to the Outer Banks of North Carolina, saw a more moderate increase of 13%.

Across much of the country, vacation rental managers and hosts have been able to take advantage of increased demand and significantly increase their rates.

R adjustedevBY: June 1 – August 31

Due to the increase in both occupancy and rates, the average rental in the United States generated 41% more revenue this summer than in 2019. Adjusted revenue per available rental (RevPAR) combines occupancy and ADR to measure the average income generated per night not taken. by owners or holds.

California was the region with the strongest growth in occupation, while the Southern Appalachians saw the largest increase in ADR; both ended the summer with an adjusted RevPAR 71% higher than 2019.

The south Atlantic coast was the worst performer, despite an impressive 35% increase. RevPAR increases should signal a positive future for markets like Hawaii and cities, where the recovery has been delayed.

Average booking window: June 1 to August 31

Although rental performance indicators for most destinations across the country have moved in similar directions, booking behavior has been less consistent.

The average reservation window, or the time between a traveler making a reservation and arriving, has increased from 86 days in 2019 to 77 days in 2021. However, this is much closer to normal than the average reservation window of 56. days in 2020.

California and Oregon saw the largest drops in the average booking window, at -21% and -17%, respectively.

Interestingly, the Gulf Coast and Southern Appalachians had longer average reservation windows in 2021, despite sharp declines in 2020.

The shorter reservation window has allowed revenue managers to keep prices high until the travel date, but the average reservation window is slowly returning to normal for most markets. Vacation rental managers will need to continue to keep abreast of demand and reservation data and adjust their strategies accordingly.

Average length of stay: June 1 to August 31

Nationally, the average length of stay increased from 5.1 days in 2019 to 5.0 in 2020.

With the exception of Hawaii, where length of stay nearly doubled in 2020 due to travel restrictions, most markets haven’t seen significant changes in average length of stay over the past two summers.

Colorado saw the biggest change from 2019 at + 21%, but it was still only a 0.7-day increase. These numbers imply that the average customer is taking the same trip time as they always have, although the average can smooth out outliers.

Taken together, these trends underscore just how remarkable the 2021 summer season has been for rentals across the country. Hosts, owners and property managers probably went through some very uncertain times last year dreaming of the light at the end of the tunnel. The 41 percent national increase in income was an even brighter light than most of us expected.

However, the market is still on the move. As the pandemic continues, regulatory battles intensify and other accommodation industries recover, staying on top of trends continues to be crucial for everyone involved in the rental industry. holidays.

About Michael B. Billingsley

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