Revenue Trends

Market Performance: Last year, in Q2 of 2023, market revenue per listing decreased by 28% compared to 2022. In 2024, revenue per available room has dropped an additional 10%, according to AirDNA, based on data from 1,600 active listings in Santa Cruz County.

OVR Performance: OVR has felt the impact of market conditions but has successfully mitigated the downturn, outperforming the market in both occupancy and revenue. Despite a 5% drop in our baseline listings with multiple years of history, we have maintained strong performance.

What Does This Mean?

We are still coming down from the post-pandemic “boom.” Listings are generating 38% less annual revenue compared to the peak years of 2021 and 2022, and 10% less compared to last year. We need to set realistic expectations for payouts if we compare them to the same months in previous years.

For example, if you received $16,000 in July 2022, you likely saw around $11,500 in July 2023. If the 2024 trend continues, we might expect a payout of approximately $10,400 this July.

Comparing Monthly Rents Year over year

Below are examples of payout comparisons for the same month in each year given the general market conditions from 2022 to 2023 to 2024.

Booking Trends

Occupancy - Average market occupancy has declined as the number of listings peaked in 2023 while demand decreased. In January, the market occupancy was just 34% and only increased to 53% for March, April, and May.

Rates - As occupancy declines, rates naturally decrease as listings compete for bookings. However, our dynamic pricing has helped mitigate this impact by adjusting daily to match fluctuations in demand.

On The Bright Side

OVR continues to massively outperform the market - Despite the market declining further year-to-date in 2024 following a significant drop in 2023, our listings have outperformed the market with an increasing margin.

Focused on Outcomes - OVR diligently monitors guest reviews, promptly addresses repairs and maintenance issues, responds to guest needs, and consistently offers a superior level of service to ensure sustained performance.

The graph below demonstrates that OVR listings, on average, have 32% higher occupancy compared to the rest of the market and earn an additional $50 per night. This includes our new listings, which initially start with lower rates and zero occupancy until they gain momentum and achieve performance levels comparable to our established listings.

Maximizing Occupancy + Revenue

Using AirDNA revenue rankings, we've observed that OVR boasts a high concentration of top-performing rentals across all sizes and cities within the county with many listings ranked in the top 99th percentile. The longevity of each property has steadily improved its ranking amidst growing market competitiveness. This provides compelling evidence that our strategies effectively maximize returns for the listings under our management.

In order to continue to outperform the market OVR must continue to adapt and improve the following:

Pricing Strategies

dynamic with constant evolution given the changing market

Marketing Techniques

reach guests where they are, how they want to be marketed to

Guest Experience Enhancements

create differentiated experiences that are multi-dimensional

Hospitality Services

continue to adapt to guest demands and resolve issues to keep ratings high for long term financial performance

Property Management

swiftly identify and execute on maintenance and repairs

Regulatory Considerations

As the county continues to tighten regulations we expect a reduction in available rentals. Consequently, this natural scarcity is likely to drive up listing revenues.