It’s tough out there and you need to discount your rental prices.
Vacation rentals will thrive in a recession.
People are staying close to home
Discounted package holidays will keep the industry afloat in 2009
It’s hard to know what to believe. There’s reports; patterns; trends, positively focused articles telling us how we’ll experience an upsurge in bookings, and gloom’n'doom reporting about the downturn in the industry.
Here’s some of what I’ve been reading:
Australia: Reporting falls in rates of 20% – 50% in some luxury properties with a trend for people to stay closer to home.
Property managers have reported full occupancy and waiting lists of at least two years for beachfront rentals… The tourism industry has urged Australians to take advantage of some of the lowest domestic air fares on record and holiday at home.
United Kingdom
In the UK, travel giants Thomson and self catering specialists Hoseasons have signed up with Direct Holidays listing site to add another 50,000 properties to their database.
"Last week the site reported a 15% increase in bookings. It claimed this was in response to holidaymakers looking to book rental properties direct with owners to save money on holiday costs."
South Africa
"A shift in the holiday rental market has been relaxing the policies on the minimum number of days for a booking…local holiday market demand is at its slowest in years."
USA
Tough times open doors for bargain hunters -"Even if a site or rental agency doesn’t feature deals and discounts, don’t be too timid to negotiate. Almost everyone is feeling the pinch these days, and a property owner or rental agent might be really happy to get $1,000 for a nominal $2,000 rental rather than see it go empty."
"Widely considered to be the new hotels in 2009, vacation rental properties offer prices that are more competitive or lower than hotel rates, making them a highly attractive option for cash-strapped travelers and vacationers during these tough times."
I couldn’t find any media comment giving predictions for the Ontario market in 2009. My feelings are, there will be a rise in available properties, meaning owners must find ways of being more competitive. Late booking may become the norm; there’ll be more discount hungry renters looking for deals, and we should all become media savvy in our attempt to capture the market.
Whatever 2009 brings, it’ll be an interesting year!
{ 3 comments… read them below or add one }
This is going to be a tough year and I think the best way to have success is to ramp up marketing for your vacation rentals and cut costs in other areas…such as property management fees. I would say now is the time to do the all of the booking and leasing yourself. I recently started using a site called http://www.rentalspacenetwork.com that lets you advertise your properties but also gives you a vast amount of leasing tools with your account. I am now doing all my booking using their electronic signature based lease agreement system and it is working out great.
Another way to keep properties rented is offering “pay three nights get the fourth free.” Even though the economy is bad still people have booked houses for the next year, because no matter what, families still go on vacation at least once a year, and renting a home rather than staying at a hotel is cheaper. I agree with Teresa, doing the booking and leasing yourself helps a lot in times like this, even cleaning the property afterwards puts more dollars in your pocket.
Nevertheless, vacation renting your property is and will be a great business! regardless of the ups and downs in the market, real estate is always a smart investment!
2009 may proove challenging to keep rental occupancies healthy so pricing will be critical…be willing to negotiate but don’t give it away. Enlisting the services of a local vacation rental manager could really help occupancy rates and even help keep nightly rates higher. A local management company not only helps market and promote your property, they also take care of important administrative duties. Using an online “owner direct” website can produce prospects, but does not address administrative duties such as credit card processing, check-in proceedures, emergency contact information, housekeeping, maintenance, and other guest needs during their vacation. If owners choose to promote their properties on their own, negotiate a lower commission rate with your manager as qualified leads are provided. Many managers encourage this owner participation. Doing this spreads out marketing in many different areas and leaves guest administration up to a professional manager.