Greetings from the busy Outer Banks!
It’s that time of year when the roads slow down and vacation rental websites are booming with bookings for the year ahead. In this market outlook, we’ll share real industry data and our view as local Property Managers on what we can expect from the year ahead. We’ll also share some quick recommendations on how to select your property management service.
A quick look back the past two years…
The following screenshot shows Paid Occupancy % from 2022 (red line) and 2023 (blue line) provided by Key Data Dashboard for the entire Outer Banks market (Corolla to Hatteras). This includes 84 property managers who submit their data to Key data and approximately 16,150 properties.
Paid occupancy % is the amount of paying customers. We use paid occupancy % as a key performance indicator because it shows true numbers and does not account for owner time, owner guests, occupancy blocks, or any other date blocks that can potentially inflate numbers. Additionally, some owners may choose to block off their home during non-peak months.
Overall, the 2023 market was about 2.8% behind 2022 numbers; however, if you were to drill down to weekly, the biggest changes are in shoulder weeks showing about a 5% to 7% difference year over year. You can see the large gaps in May-June and August-September. This information was confirmed by the Outer Banks Visitor’s Bureau during their annual Tourism Summit. PS, we highly recommend staying up to date using their industry updates newsletter.
Looking ahead at 2024…
Smart property managers understand that no two years are the same. We also know that in election years, pacing can be a little different. Throw in unrest in the middle east and inflation fears and there are a lot of unexpected data points in the economy. The year ahead is starting to shape up and most of the booking volume will happen in Quarter 1.
What we are seeing from our partner network is that short stays continue to be top of mind. We’re seeing shorter lead time (often called the booking window) and many properties changing their length of stay to capitalize on booking trends. According to Airbnb, 67% of searches on the Outer Banks are for stays shorter than 7 nights. 49% of searches on the Outer Banks are for stays shorter than 5 nights. Outside of the OBX, this number is even higher — 83% of searches in Charlottesville are for stays shorter than 5 nights. 91% of searches in Shenandoah National Park are for stays shorter than 5 nights.
On the Outer Banks last year, the average length of stay on Airbnb was around 4 nights – even for peak season – and we’re seeing the same numbers for 2024 to start the year as well. Being agile is where you can win.
It is possible that you can rent for less than 7 nights while still obtaining the same average daily rate (ADR) as a full week stay as long as your Property Manager is in tune with your market and revenue management. Say you take a 4-night stay and then add in another booking, or someone extends their stay with the gaps left available. You’re able to achieve higher-than-market returns.
Property Management
If you’re currently with a property manager, it is important to trust them and share your goals with them as much as possible. If you want a full calendar and want to rent on the books or are you more risk averse and want to achieve a top dollar revenue? Make sure your property manager doesn’t stick you in a ‘sweet spot’ so that the odds work best for their goals. And don’t forget to take your owner time now before someone else snatches that week you were looking for!
If you’re self-managing and searching for a vacation rental management company, it’s important to interview and ask key questions such as who is handling your revenue, how do your fees compare to other realtors. We highly recommend you go a step further and ask for historical data or information to back up the projection. Some companies rely heavily on algorithms and do not have a broker in charge with years of experience or much data other than a quick number.
We’re available 7 days a week to help when you have questions – give me a call or text me 252.489.4123
Jeremy Grogg, KEES Vacations