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    What Lies Ahead? Fall Pacing for the Top US Travel Regions

    Sponsored by Key Data

    Conversations about future vacation rental performance have been dominated by uncertainty since March 2020. Since then, we’ve collectively worried about if and when industry recovery would occur, how long pent-up demand would last, and, most recently, how the changing economic environment would affect travel.

    In most of the top leisure destinations in the US, recovery came quickly, and 2021 was one of the most profitable years ever for many homeowners, destinations, and managers. 2022 has been an incredible year so far, although slightly disappointing compared to 2021 for some markets. However, the next few months are starting to shift as demand softens, rates continue to increase, and traveler behaviors return to normal. As is generally the case, there are similarities and differences among the regions to consider. Let’s dive in.

    Key Data 1.png

    How to read these charts: Each chart shows a key performance indicator (KPI) by region by month for August, September, and October 2022 and the percent change between 2019 and 2021. For each year, only reservations on the books by July 19 are included. The green bars mark increases, and the red bars mark decreases. The darker the color, the larger the change.

    Adjusted Paid Occupancy Rate:

     = Guest Nights / (Total Nights - Owner Nights - Hold Nights)

    Many leisure destinations had exceptional fall occupancy rates during 2020 and 2021 as pent-up demand continued through the shoulder season. Pacing data for 2022 indicates that most regions are seeing fall occupancy rates that are higher than before the pandemic but lower than last year. August occupancy is slightly higher than in 2019 for many regions, but September and October (when occupancy usually drops and there’s more room for growth) are significantly higher. Hawaii rentals continue to be popular, with some of the highest occupancy rates for the next few months and large increases over 2019. Occupancy on the books for the Rocky Mountain states is quite low, but October in the Rockies is the only month and region currently pacing ahead of 2021. The Southwest is the only region with lower occupancy rates than at this time in 2019. Slightly lower demand than last year and a return to normal seasonal fluctuations in occupancy are consistent across the top leisure destinations that recovered quickly from the pandemic.

    Key Data 2.png

    Average Daily Rate:
    = Unit Revenue / Guest Nights

    As occupancy and demand soften, rates continue to leap upward. The US average daily rate is currently $419 for August, a 30 percent increase from 2019 and a 9 percent increase over last year. Hawaii currently has the highest average daily rate in each of the next few months and the largest increases from last year. In the Southwest, where occupancy has fallen since 2019, rates have more than doubled since 2019. ADR for the Western US is 1 percent lower than last year in both August and October. Deciding how to adjust this fall’s prices in the face of lower occupancy and shifting economic conditions will be challenging for managers and hosts.

    Key Data 3.png

    Adjusted Revenue Per Available Rental:
    = Unit Revenue / (Total Nights - Owner Nights - Hold Nights)

    Using RevPAR as a KPI is more critical than ever because it measures the impact of changing occupancy and rate patterns on revenue. In some cases, slightly higher rates will help to offset the impacts of lower occupancy. However, as consumers become more price sensitive due to inflation and a slower economy, prices that are too high will deter would-be travelers. Monitoring RevPAR is the best way to balance rates and demand.

    As with occupancy, RevPAR is well ahead of 2019 but slightly below 2022 in most markets. For the US overall, RevPAR is pacing 2-10 percent behind 2021 but 37-89 percent ahead of 2019. Hawaii and the Rocky Mountains are the only regions with higher RevPARs than last year.


    Key Data 4.png

    Average Booking Window:
    = The average days between a guest making a reservation and checking in.

    Booking windows were much shorter than in 2019 for most of 2020 and 2021 as guests planned their vacations closer to arrival. Now they are beginning to return to pre-pandemic length like occupancy and RevPAR: The average booking window is hovering between 2019 and 2021 in most markets. For the US overall, guests are making their August reservation an average of 113 days in advance of arrival, an 8 percent decrease from 2019 and a 3 percent increase from 2021.

    The average booking window is the shortest and the most changed from 2019 in the Southwest and Western regions. By October, only moderate differences from 2019 can be seen. A more stable booking window will make it easier for managers and hosts to plan and set rates. If the booking window begins to exceed 2019, that will be one of the earliest signs that booking activity is slowing.

    Discerning whether the industry is slowing due to the economic downturn or simply returning to a pre-pandemic normal is not easy and depends on the market. Paying careful attention to these four KPIs over the next three months will enlighten us all.

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