From demoralizing federal employees to causing many to suffer financially, the 35-day government shutdown also had large impacts on the economy, including that of the local vacation rental business in the region surrounding Washington D.C., according to recent data pulled from the newest tool for VRMA members, VRMA Insights.
The tool, launched in late 2018, is powered by LSI Tools and provides members with valuable information by tracking industry trends to inform pricing strategies and even create a marketing plan. Last week, a VRMA Insights user in the Outer Banks region reached out to Scott Leggat, CEO of LSI Tools, asking if he had noticed a downturn in the reservations in the area due to the government shutdown.
“While nobody else had suggested that this might be happening, it piqued my curiosity to dig deeper,” Scott says.
Scott continues, “Using VRMA Insights, I randomly compared six OBX companies' year-over-year booking performance for the month of January. Of the six companies, five were down between 5 and 7 percent. The other was even. The typical booking window — one of the metrics measured by VRMA Insights — for the summer peak season for OBX rentals is approximately 180 days on average. January is one of the highest volume months for bookings, so being down in that month can have a significant impact on summer occupancy.”
Digging deeper, Scott looked at specific zip codes with high concentrations of government workers and contractors, including Maryland, Washington D.C., Northern Virginia and Hampton Roads, Virginia, to see if reservations originating from those areas were also down. The results mirrored the year-over-year booking performance results that he noticed earlier.
“While it is not conclusive that the government shutdown was responsible for the data we were seeing, it may be the most evident hypothesis,” Scott says.
Though the government shutdown ended on January 25, the funding bill will only cover the government for 21 days. If lawmakers cannot come to a compromise by February 15, the government will go unfunded once again.
“Consumer confidence is a fickle thing, and it may take a little time for it to be restored,” Scott explains. “As the possibility of a second shutdown looms, we may see some hesitation for consumers directly impacted to make long-term commitments.”
By using VRMA Insights, you will be able to spot anomalies and trends, test your theories early on and possibly avoid some of the pitfalls of — in this case — a government shutdown.
“If you notice your business was impacted by the shutdown, you could explore the idea of flexible payment programs for summer vacations for government employees and contractors impacted by the shutdown,” Scott shares. “Deferred payments with a lower than usual deposit is also another option to explore. It may persuade cash-strapped consumers to follow their traditional vacation booking patterns.”
By making slight adjustments in your business’s marketing and policies to adjust to consumer behavior, you may be able to better serve your guests and ultimately help your business thrive.
If you’re interested in learning more and signing up for VRMA Insights, check out the video below.