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As 2022 comes to an end, you might be asking yourself, “How do I prepare my rentals for 2023?” With the latest short-term rental trends data and analysis, we can take a look forward at what to expect in the new year and how best to prepare.
In the ever-shifting climate we’re living in, where globally impacting financial, health, and political events make historical data harder and harder to rely upon, we know that macroeconomic analysis and forecasting is critical to driving the best revenue outcomes for our customers. Historical data will always be an element of what we utilize, but it’s table stakes when it comes to creating a competitive revenue management strategy for our customers.
At Beyond, we are able to utilize our extensive market data to make some predictions for 2023, and we can already see a few clear trends forming. Let’s take a look at the biggest short-term rental trends to monitor going into 2023, and how to prepare.
Higher ADRs, Maintained Occupancy, Better RevPAN
We are already beginning to see an influx of reservations come in for the entirety of next year and have done analysis on average daily rates (ADRs), occupancy, and overall revenue per available night (RevPAN) for the United States. Of course, projections may change due to unforeseen events (as we’ve learned from 2020); however, our data shows a very positive overall outlook for next year.
As you can see, ADRs in the US are pacing higher in 2023 than 2022, while seemingly skyrocketing for summer. Coupled with a similar occupancy pace, we can conclude at this moment that there will not be a slowdown in occupancy similar to what the industry experienced in early 2021.
Along with an increase of ADR, we will consequently see an uptick in RevPAN in 2023 as well. We are seeing a significant increase in US. RevPAN throughout the entirety of the year with these higher ADRs, which is another critical indicator of potential high profits.
Longer Booking Lead Times
In addition to this positive upcoming demand, we are also seeing longer booking lead times for 2023. As travelers regain confidence and begin to plan ahead once again, be sure to monitor your pricing well in advance to ensure you are not undercutting any part of the year, including any regional events.
Tips to Plan for Next Year:
- The biggest takeaway from our data is to monitor and stay very responsive to your performance going into Q1 as booking volume continues to grow. Keeping a close eye on your ideal occupancy rates, ADRs, and other indicators is key to competitively pricing your listings. Travel trends are continuing to shift as the world moves into a post-COVID-19 reality, and real-time data is of utmost importance to improve your performance.
- As ADRs and occupancy levels remain high in 2023, you’ll want to set your pricing to where it is meeting or exceeding prior year’s average monthly ADRs. Pay special attention to the pacing of your market’s high season, and be sure to not leave money on the table.
- While it can be beneficial to have calendars open as far out in advance to provide potential guests with plenty of options while booking, be cautious and make sure that your prices are not set too low. You should have a premium in place for far-future (nine-plus months) dates to ensure that guests are paying a premium to secure a booking that far in advance.
What are you keeping in mind for 2023? With Insights from Beyond, you can keep an eye on how trends are shaping up for your market and gain a deeper understanding of your market—plus, it’s free to all owners and property managers. Get started today!