The week of July 4th is traditionally a peak time for vacation rentals in summer markets. Since the Fourth falls on a Saturday this year, which is a primary turnover day, there is the potential for rentals to experience two strong weeks. However, with regulations and policies still in place due to the COVID-19 pandemic, indicators of vacation rental performance forecast mixed results.
Most states are expected to have higher occupancy rates for the weeks before and after July 4th than in 2019, with some notable exceptions. In Colorado, the week before the holiday is pacing almost 15% below 2019, but the week after is only pacing 1% below 2019. Florida is pacing behind 2019 as well, however, because 52% of their June arrivals occurred within 30 days from the booking date, they still have a chance to catch up. The Fourth is North Carolina’s time to shine - their occupancy rates are the highest of the markets analyzed - and this year is outpacing 2019, especially for the following week. Much of this is driven by bookings in the Outer Banks, where rentals are pacing 14% ahead of 2019.
Booking windows, the average time between a reservation being made and the guest’s arrival, have decreased substantially from 2019 to 2020 since reservation activity was all but stopped while U.S. travelers were quarantined for two months. Of the 6 states we analyzed, Colorado saw the largest decrease in the booking window of 72 days shorter than 2019 for check-ins June 13th. This could be contributed to its seasonality - Colorado is typically a winter destination. North Carolina is typically a destination with a longer than average booking window (100+ days out from booking), but they saw a substantial decrease of 50 days in their booking window for the week prior to July 4th. The other states hovered between decreases of 37 and 18 days for the weeks before and after the Independence Day holiday.
Finally, we looked at the average daily rate for a few areas in both the Southeast and Western U.S. Every market had a higher ADR for the week after July 4th than in 2019. In the Southeast, ADR largely mirrored 2019 rates except for the week of July 4th, where the average daily rate increased by $23. Along the West Coast, ADR for 2020 was lower than in 2019 for the two weeks prior to July 4th but increased by $28 for the week after. Of these markets, Los Angeles had the largest increase in ADR (+$115) but the area’s occupancy rate for the week fell by 22%.
The story of the Coronavirus pandemic on travel destinations in the United States continues to develop, but it seems as though many destinations will experience a July 4th week with similar occupancy rates, shorter booking windows, and higher average daily rates. This is great news for many property owners and managers who were not sure what would happen and are hoping to save their summer season.
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