Market Outlook: Labor Day on the North Carolina Coast

August 27, 2019

The peak season for the North Carolina Coast ends in mid-August as the school year begins. Occupancy rates drop significantly over the following two weeks, and the week before Labor Day is the last strong week before the number of guest stays decrease for many property managers in the region. Occupancy drops to around 3% from November through March, with a slight jump for Thanksgiving. For a market without shoulder seasons, the last few weeks of the summer season are very important for the North Carolina Coast. The region as a whole is right on track with last year. But that’s not true for every vacation area. Key Data looked at year-over-year performance for popular beaches along the North Carolina coast for the week of August 24 - August 30.

The Average Daily Rate (ADR) for vacation rentals along the coast rose over the same week last year. Topsail Island and the Kitty Hawk, Kill Devil Hills, Nags Head areas of the Outer Banks had the biggest increases in ADR. The New Hanover County Beaches were the only in this set to experience a drop in ADR. However, that drop was very moderate.

The higher ADR didn’t deter guests and Available Occupancy (which excludes owner stays and blocks from nights available to book) was higher than last year for most of these beaches. The northern part of the Outer Banks saw the biggest increase. Topsail Island had the biggest decrease, down 4% over the same week last year.

Despite the higher ADR and relatively on-track Available Occupancy, the Revenue per Available Rental (RevPAR) was lower for many of these beaches. This was driven down by the Ocuppancy rate, which was substantially lower due to an increase of owner nights and holds. Topsail Island experienced the largest drop in RevPAR (-$28 YOY). 

We’ve heard many in the industry express concerns about the average booking window becoming shorter. Hatteras Island is the only beach in this set where that was evident - on average, guests booked their stays 10 days closer to arrival. The Wilmington area beaches and Topsail Island all had average booking windows that were five days further from arrival. 

Overall, beaches along the coast of North Carolina had a similar week before Labor Day to last year. Notable exceptions were Topsail Island and Hatteras Island, where ADR was up but RevPAR was down. As visitation to the region slows down, property management companies will begin planning for next year and Key Data Dashboard will be an integral part of that process for all of our partners.

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