It seems safe to say that the vacation rental industry has been permanently changed by the coronavirus pandemic and renter booking behavior may have been the most impacted element. However, it remains to be seen whether these changes in booking trends will be permanent or just a temporary response to the pandemic. The Southeast United States served as a case study for the reopening of rental markets as restrictions were lifted last spring and can play that role again now, due to its diversity of markets and generally year-round travel season.
Guest Booking Activity, % change last year to this year
Let’s start by looking at the year-over-year change in guest bookings per active property across the Southeast. Reservation activity increased in June to 250% of 2019 bookings as destinations reopened, dropped during July, and remained strong during the late summer and fall. Reservation activity declined slightly (but stayed 50% higher than 2019) during November and December when it’s more difficult to plan last-minute vacations due to the holidays. Since then, booking activity has begun to increase even more. Keep in mind that during the entire period, the Southeast as a whole saw more bookings per property every month than during the previous year.
Of course, there are always exceptions to large regional trends. Nashville, Tennessee, saw a slight increase in reservations during the fall but remained 20-30% below last year from November through February. Orlando rentals, after bouncing between +4% and -26% for June through January, had a 22% year-over-year increase in reservations during February. The Florida Keys are the stand-out performers and received 60% more bookings than 2020 in January and 80% more bookings than in 2020 in February.
Houses vs. Condos
Throughout the pandemic, renters have seemed to lean toward single-family homes instead of condos and apartments. In many markets, revenue for houses increased during 2020 while revenue for condos and apartments decreased. The chart above shows the same year-over-year change in bookings, but segmented by unit type. Booking activity for both types of units is higher than the prior year, but reservations for houses increased more. This gap widened during the winter months.
Looking at houses vs. condos for the entire Southeast doesn’t tell the whole story, since some condo-dominated markets such as Myrtle Beach and Panama City Beach have not recovered to the same extent as destinations dominated by houses. In Southeast Florida, reservation activity was lower for condos than houses from July through January, but higher in February. In Northeast Florida, condos and apartments saw bigger year-over-year increases in reservations than houses, but now all unit types are booking similarly. Analyzing smaller regions such as these shows that consumers’ preference for single-family houses may be lessening.
Despite it being a hot-button topic, the average stay length during the summer and fall was relatively close to 2019 at a regional level. However, a significant variation occurred during the winter. Stays with January arrivals were, on average, 2.5 days shorter in 2021 than 2020.
Once again, there’s a fair amount of variation between major Southeast markets. For the Charleston, South Carolina area, January arrivals stayed for 2.7 days longer than in 2020 (the inverse of the overall regional difference). Nashville’s average stay length has consistently been 1-2 days longer than in the previous year. January arrivals in Gulf Shores averaged 6 days shorter than in 2020. For this indicator, it’s especially important to have more localized data.
Travelers used to be fairly confident when planning a vacation three to four months away. The pandemic has eroded that confidence and, paired with other reasons, has led to a shorter booking window for vacation rentals. For Southeast vacation rentals, the average booking window was 20 days shorter than in 2019 for June through December. The gap between years widened further for winter stays: the average January stay was booked 32 days closer to arrival in January and 41 days closer in February.
The majority of destinations have experienced shorter booking windows, but the extent varies. On Hilton Head Island, January stays were booked 66 days closer to arrival. On the Florida Keys, February stays were booked 83 days closer to arrival. Myrtle Beach’s booking window has changed less dramatically and has been only about 9 days shorter every month between October and February. On the other hand, the booking window has changed very little for the Tennessee Smokies and North Georgia Mountains.
Finally, let’s take a look at when new reservations will be arriving. During the summer and fall, most reservations were for arrivals within 30 days as travelers were planning last-minute vacations. During the past two months, more reservations have been booked for 60 or more days away as people begin to plan their spring and summer trips. As always, the booking period will vary by season.
While we’ve covered high-level booking trends for the entire Southeast region, we’ve also addressed the variation between specific markets. As traveler booking behavior continues to evolve, make sure you’re staying on top of trends and changes in your local market with Key Data.