Austin, Texas // Sept. 20, 2012
Vacation Rental Resurgence: Summer Occupancy and Rental Rates Ticked Upward for the Vacation Rental Industry this Year
Vacation rental owners reported year-over-year increases in occupancy rates and average weekly rental rates during this year’s key summer travel season, signaling a continually strengthening travel and tourism industry, according to a new report from HomeAway
, Inc. – the world’s largest online marketplace for vacation rentals.
The latest “HomeAway Vacation Rental Marketplace Report” finds nearly three quarters of owners (72 percent) who consider summer to be their peak season reported occupancy rates of 76 percent or higher
, up from 68 percent last summer. These owners also reported an average weekly rental rate of $1,493
or $213.29 per night.
By comparison, Smith Travel Research, Inc. – a hotel industry research firm – reported the average occupancy rate for U.S. hotels between June and August was approximately 70 percent (versus 68 percent for the same time period last year) with an average room rate of $106.97 per night, representing just a 5 percent increase over the same time period in 2011.
Overall, nearly nine in 10 vacation rental owners (87 percent) say their summer business was about the same or better than last summer.
“We’re pleased with the feedback we’re getting from our vacation rental owners. Even owners with properties in destinations where summer is typically a shoulder season or an off-season have reported a good season in terms of occupancy,” says Brian Sharples, chief executive officer of HomeAway®. “It’s clear that owners who invest just a minimal amount of time marketing their vacation rental can generate valuable income.” A Little Effort Goes a Long Way
According to the report, vacation rental owners spend an average of 8.6 hours per week marketing and managing their vacation rental properties, and that time is well spent, considering owners generate an average of about $26,000 per year in rental income. “That’s about $58 HomeAway vacation rental owners are making an hour, which is a nice supplemental salary,” says Sharples.
In fact, about 43 percent of owners use the income generated from their vacation rental almost like they would a salary – for everyday living expenses, discretionary spending, and savings for the future.
About 59 percent use the income to maintain or make upgrades to their rental property. New linens, furniture, electronics, exterior maintenance, and interior painting/wallpapering are among the most common improvements made by vacation rental owners in the past 12 months.
According to the report, 47 percent of owners also report using their rental income to help pay the mortgage on the property. Among those owners who have a mortgage on their vacation rental home, nearly half (49 percent) are able to cover at least three quarters of their mortgage payment.
Leisurely Retreats Become Profit-Generating Assets
Most vacation rental owners say they originally purchased their second home for personal use (33 percent) or as a long-term investment (31 percent), and half of all owners (50 percent) say they spent between one and 28 days in their vacation rental within the past 12 months. Another 27 percent stayed for one month or longer.
While many owners say work and family obligations, along with limited vacation time, prevent them from using their vacation home more frequently, they also say they’re able to rent out their homes when they’re not using them to generate extra money. More than six in 10 owners (65 percent) say they decided to rent their homes to travelers to cover some or all of their expenses and another 23 percent started renting with the intent to turn a profit.
According to the HomeAway report, vacation home owners along the Jersey Shore were among the most inclined to list their vacation homes for rent in the most recent quarter. In fact, three of the top five markets with the largest increase in new vacation rental listings were along the Garden State’s coast. Sea Isle City, N.J., had the largest increase in people listing their vacation home for rent on HomeAway.com during the second quarter of 2012, followed by Lavallette, N.J.; Balboa Peninsula, Calif.; Angel Fire, N.M.; and Long Beach Island, N.J.
For those who may not currently own a vacation property but are thinking about buying with the intent to rent it to travelers may want to consider the Balboa Peninsula in California, which saw a 222 percent increase in inquires from travelers looking to rent a vacation home on HomeAway.com during the second quarter of 2012.
The top 10 markets where traveler demand is on the rise, based on a year-over-year analysis (Q2 2011 vs. Q2 2012) of inquiries from travelers looking to rent a vacation home, include:
| 1. Balboa Peninsula, Calif. (up 222%) || 6. Honolulu (up 115%) |
| 2. Reunion, Fla. (up 137%) || 7. Kissimmee, Fla. (up 114%) |
| 3. Aspen, Colo. (up 127%) || 8. New Orleans (up 114%) |
| 4. San Diego (up 124%) || 9. Vail, Colo. (up 111%) |
| 5. Folly Field, S.C. (up 116%) || 10. Gulf Shores, Ala. (up 108%) |
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