Welcome back to Rev Up with the Brett/Robinson Revenue Management team!
We hope you were able to join us last week at the August Rental Update meeting! If you were not able to join (or if you’d like a quick refresher on what we covered), we did record the presentation, which you can find at this link.
Today, we want to spend a little time reviewing a recent article posted on KeyData, one of the better data companies in the vacation rental industry. The article can be found here, but if you don’t have time to review, we’ll summarize it here today in this week’s post.
The title “U.S. July Overview 2023: Declining Demand And Stubborn Rates impact RevPAR” can give us a little insight on what we’re going to be breaking down: declining revenue across the entire country in July. If you’re new to the blog (first of all, welcome!), we have covered some basic Revenue Management terms in our first post, but we’ll quickly review on of those terms here today: RevPAR. RevPAR is revenue per available night, and is the backbone of how we measure our performance in the vacation rental industry. Simply put, RevPAR is measuring how well we rent the nights that are available to rent excluding nights blocked for maintenance or owner stays.
The article notes a nationwide decline in occupancy of 4% vs. 2022 and 9% vs. 2021, and the Southeast region saw about 5% decline vs. 2022 occupancy. At Brett/Robinson, we saw closer to a 2% occupancy decline in 2023 vs. 2022, and a 4% decline vs. 2021 due to our early actions to get competitive rates into our system. The article details that the country and Southeast region specifically saw fairly significant declines in occupancy and RevPAR. Interestingly, the Southeast region did not see significant declines in ADR, which helps explain how Brett/Robinson was able to outperform the market in occupancy and rental revenue this July!
Gasoline costs across the country increased, airline prices decreased, and inflation increased in July. The result was that traveling to bigger cities by plane became less expensive, leading to increases in occupancy for cities like New York, Las Vegas, and Los Angeles, and decreases across smaller vacation markets like Gulf Shores and Orange Beach. American travelers decreased their travel budgets by over $1,100 (or over 25%) from January to July, per research done by Destination Analysts. Another alarming number is that over 46% of travelers surveyed in July felt that prices were too high, which had deterred their traveling for the Summer, and more travelers felt like it was a bad time to travel this Summer than thought it was a good time to travel.
The main takeaway from the article, and what we’ve seen here at Brett/Robinson this Summer is that demand is still down vs. the past couple of years, and our best path to maximizing your rental revenue for the remainder of 2023 is to have competitive prices on your amazing vacation rental properties!
If you have any questions or suggestions on what you’d like to see us discuss here in the future, please shoot an email to us at revenuemanagement@brettrobinson.com and we’d be happy to dive in and discuss!