The smart pricing tool Beyond Pricing, one of our integration partners, has released their 2022-End-of-Year-Report with a look back, as well as predictions and trends for the upcoming year. In this blogpost we sum up the trends for the US market in 2023. In addition to this, we discuss the findings and advice for European vacation rental hosts and property managers that have taken part in Beyond’s recent webinar.
2022 has been a difficult year, and the past two years living with the COVID-19 pandemic have shown that predictions cannot be made based on historical data only. Climate change, inflation, the Russian invasion in the Ukraine – we have endured a lot at the same time.
So how to make predictions in uncertain times like this?
Beyond has made predictions based on the following data and experts:
- Aggregated, internal data from the 340,000+ accounts using Beyond globally
- External, publicly available data from Airbnb
- Insights from the experience of three short-term rental owners and managers based in the US.
What to expect in the U.S. for 2023?
There are two major trends that can be predicted for the upcoming year:
1. Higher average daily rates (ADRs), Maintained Occupancy, Better revenue per available night (RevPAN)
2. Longer booking lead times (guests planning and booking ahead)
Tip: Keep an eye on your occupancy rate, set pricing based on last year’s average monthly ADRs, open your calendars in advance while making sure not to set the prices too low.
2022’s hottest markets for short-term rental investments
Beyond also measures short-term rentals based on their profitability. The following areas have reached the highest RevPAN and occupancy rates from 2021 to 2022:
- Orlando, FL: 46%
- New Orleans, LA: 38%
- Los Angeles, CA: 24%
- Chicago, IL: 27%
- Miami, FL: 16%
- Houston, TX: 14%
- Austin, TX: 35%
- Boston, MA: 33%
- Nashville, TN: 20%
- Savanna, GA: 17%
See the full End-of-Year-Report and download it here.
What property managers predict and advice
Beyond also recently hosted a webinar and asked European short-term rental experts to share their experiences and learnings from the last years. Here is a short summary:
Learnings
- Be flexible with prices and confident in setting premium prices if your market allows it.
- Get help and hire employees, when your occupancy grows.
- Finding the ideal rates for weekdays is impossible without the help of a smart pricing tool.
- Don’t forget about short stays to avoid gaps in your calendar.
Predictions for 2023
- During the side and low season, bookings will remain low.
- More US visitors in Europe due to the strong dollar.
- Digital nomads: Many people work during the week and enjoy their holidays on the weekend. That even affects family vacations.
- Prices have increased (e. g. energy prices), so prices (even on the low end) will be higher as well.
- Hosts and property managers often have to beg for suppliers instead of choosing them.
- During the COVID-19 pandemic, there was something of a gold rush in vacation rentals. This has led to the current oversupply of vacation homes. It will not be easy for all of them to plan financially after these uncharacteristic two years. There are also many new regulations that need to be followed.
Strategy ideas 2023
- Off-season: During the low season, focus on the tranquility of the area offering an escape of sorts for potential guests.
- Flexibility: Always keep an eye on the numbers, stay flexible and react fast.
- Pricing: Adjust properties to price, not the other way around.
- Respond fast: Be fast in responding to guest messages and needs -> this leads to good reviews -> which leads to more bookings.
- Stay personal: Surprise your guests with sweets, small notes, messages etc. Check out our blog for more ideas for welcome gifts.
- Embrace technology: PMS, pricing software or agencies can help you optimize your business.
Hosts and property managers value Beyond Pricing for increasing their revenue because using a smart pricing tool takes the emotion out of pricing.
Conclusion
In uncertain times like ours, you cannot rely on historical data alone. If you stay flexible and rely on good revenue management, you can still be successful. So keep an eye on your occupancy rate and adjust the prices if needed. Smart pricing tools like Beyond Pricing, Weelhouse or PriceLabs and channel managers like Smoobu can help you with that.
Try Smoobu free for 14 days and try all our features like you would have on our pro plan! There is no obligation or credit card required!
