Traveler Demand Trends
We saw tremendous spikes in demand for vacation rentals in the post-pandemic years 2021 and 2022. Going into 2023 reports from AirDNA show a slowdown in demand growth to 5.5% in 2023 - down from spikes of 21.1% in 2022 and 20.5% in 2021. The maturing market recovery, changes in economy and people being called back to working in an office are all contributing to this slowdown in demand growth.
While demand is still up there has also been a sharp rise in supply of available short-term rental listings. According to Jamie Lane, AirDNA’s vice president of research, the U.S. STR supply is up 23.3% in October 2022 compared with October 2021. This resulted in each short-term rental property getting an average of 6% fewer nights booked in October 2022.
STR Supply YoY
hile demand is still up there has also been a sharp rise in supply of available short-term rental listings. According to Jamie Lane, AirDNA’s vice president of research, the U.S. STR supply is up 23.3% in October 2022 compared with October 2021. This resulted in each short-term rental property getting an average of 6% fewer nights booked in October 2022.
Supply growth in Santa Cruz is 20%, Capitola 39%, and Aptos 11%.
OVR is Dedicated to Outperforming the Market
To capture the most bookings, at the highest price, we are constantly optimizing around each booking platform's algorithm. Ultimately, the most important variables are Reach, Conversion and Guest Experience. This results in 33% higher Occupancy Rates coupled with higher Nightly Rates than the competition.
Step #1 Get in front of the travelers (Reach)
- Market on the platforms where travelers are looking most
- Understand the marketing platform algorithms and how to rank high
Step #2 Turn those views into bookings (Conversion)
- Continuous review of all data points in the conversion funnel
- Ongoing competitive analysis
- High touch optimizations to maximize booking conversion
Step #3 Earn 5 star reviews (Guest Experience)
- Critical for the long term success of the rental
- Ensuring alignment between offering and target guests
- Listening to the customer and constantly striving to improve their experience
Q1 in Santa Cruz
Q1 has been significantly impacted by rainy weather and relentless storms hitting the area. We have seen a large decrease in last minute bookings fewer people from nearby towns are seeking beach vacations during the storms.
The national news around the ocean swells, destroyed wharfs and building destruction in February also led to decreased vacation demand for this area. There have been many road closures, including the main Highway 17, flooding, down trees and power outages.
To counterbalance the impact of weather and overall sentiment of the economy, OVR has been focusing on outperforming the market. We are making optimizations to confirm your properties are listed at the top of search engines so that we can capture those people that are still traveling to the area.
Q1 in Tahoe
The Sierra Mountains are reaching record snowfall. This has led to many people flocking to Tahoe area and an increasing in occupancy and nightly rates.
The challenge is road closures are making it difficult for both guests and cleaners to get to the properties.
It's been a game of shuffle with some guests getting snowed in and needing to extend their stay while expected arrivals are unable to make it to the homes.
Overall, we are seeing high booking demand expand out to Q2.
Q1 in Arizona
It's peak season and Super Bowl was in Arizona this year. The demand and high nightly rates for Super Bowl weekend did not disappoint!
From a weather perspective, we are seeing colder than normal temperatures and this is impacting last minute booking demand. Most calendars are full but those one off open days are harder to capture bookings for.