Vacation Rental Industry Trends:
Winter 2022-2023
No market looks the same as last year — and with unpredictable patterns, it’s more important than ever to stand out from the crowd.
It’s no surprise that, like many in the travel and hospitality space, vacation rental industry trends are constantly changing. But now more than ever before, the market is different.
Not only is it harder for properties to win bookings thanks to a continued imbalance in supply and demand growth (a trend we reported in fall and summer), but additional factors like economic strain and drastic, abnormal weather patterns have introduced an element of unpredictability.
And yes, it’s natural to ask, “Why isn’t my vacation rental performing the same way it did last year?” But the reality is, with the market really being so markedly different, it’s unlikely owners will see comparable performance (nor will it be the same as winter 2021-2022).
So where does that leave us? In need of a fresh picture of what performance can look like in today’s market — as well as different revenue optimization strategies — so owners can see top-tier success.
As we head into peak travel seasons for many regions across the U.S., it also means now is the time for owners to make sure they have a team of tuned-in experts who can proactively adapt to industry trends, keep their home competitive, and help earn as much revenue as possible.
Your Seasonal Snapshot
Here’s a performance overview for the winter 2022-2023 season:
Current Market Supply
(available listings)
Winter Market Demand
(total nights booked)
Evolve Total Revenue
per Property
*Get more details on how and why we evaluate market data here.
Let’s start with some great news: market supply and demand are both still growing, and by really hefty amounts compared to 2019. What’s more, demand is at an all-time high — meaning more guests are booking than ever before.
But the fact is, market supply growth is continuing to outpace market demand growth, causing total revenue per property to be down year over year (YoY). With more rentals vying for bookings, it simply makes things more competitive — and it requires owners to get more aggressive with their optimization strategies if they want to convince guests to choose their home over the many options available.
That’s not all, though: those unpredictable factors at play — like sky-high inflation, more interest rate hikes, expensive airfare, and abnormal weather patterns from coast-to-coast — are shifting both booking behavior and the destinations people are interested in visiting.
Still, there’s more good news: while total revenue per property is down YoY, it’s still up compared to 2019 — the most stable baseline travel businesses have to monitor performance holistically.
Remember, years like 2020 and 2021 were such anomalies that businesses evaluate vacation rental industry trends and statistics against pre-pandemic times to avoid a skewed look at performance. So when comparing to 2019, you can see total revenue growth still remains strong at the per-property level. It’s also following expected growth rates that likely would have been present had the pandemic — and subsequent rebound from — not caused the extremes that it did. This means a vacation rental investment has been a smart move for owners.
Now, let’s take a closer look at what’s happening with supply and demand.
Supply & Demand
As more people realize the benefits of a vacation rental investment, market supply growth continues to climb. And while YoY growth rate was in the teens each month in the first half of 2022, since August that rate has jumped into the low 20s. For the winter season (December 2022 through February 2023), the average supply growth rate was 22% higher than the same period last year.
Demand also continues to climb, but again, at a slower rate. Over the last six months, growth rate has been in the upper single digits or, at most, in the low double digits each month. Zooming in on winter specifically, the average demand growth rate was 9% higher than the same timeframe in the year prior.
As this growth imbalance goes on, there’s stiffer competition in the market and it’s simply harder to win a booking than it was in years prior.
That’s why it’s key to reset that picture of your home’s performance to the current market conditions. It also means smart moves are critical when it comes to which revenue optimization tactics you put into play (and when).
This includes how average daily rates (ADRs) are set, as many industry players are shifting strategies here in an effort to drive buyer behavior. More on this in the next section — along with other tactics you can try to boost your revenue.
How Owners Can Pivot in Today’s Market
With vacation rental industry trends changing as quickly as they are — and in different ways across the U.S. — one thing is crystal clear: owners cannot take a one-size-fits-all approach to their revenue strategies. What’s more, relying on the exact same tactics used last year could be a recipe for less revenue. Here’s what our experts recommend keeping in mind to align with how the market is performing today.
1. Setting Competitive ADRs
This is one of the biggest ways to capture harder-to-win bookings in a changing market. In areas where demand is strong — and your vacation rental can compete for bookings at higher rates that don’t price you out — you want to set high ADRs.
But in areas where demand is lagging, it’s crucial that you appeal to guests with lower ADRs if you want to compete for what is available.
Depending on the cards your region is dealt (more on this below), this could mean ADRs should be set differently from last year, or even from what you’re used to in years past. It’s all about remaining nimble and adapting to today’s market.
Now, that doesn’t mean you can’t use historical trends as a guiding factor — in fact, you should if that data is available to you. But it should be just that: a guiding factor, rather than a deciding one.
Evolve’s revenue experts do this day in and out, continuously adapting to market shifts that influence where ADRs should be set — and regularly referencing years of historical trends that inform decision-making — to help soften any volatility and guide owners to more sustained performance.
Take the winter season, for example. In prior winter months, when per-property demand was less competitive, Evolve was able to lock in bookings at ADRs that were, on average, nearly 21% higher than the market. As the competition has increased this season, Evolve has adapted — but still used historical guidance and of-the-moment changes to stay ahead with ADRs that are, on average, 10% above market this winter.
Ultimately, this has helped Evolve owners outperform the market this winter, bringing in an average of 17% more base revenue per property. So even though the market is moving, Evolve moves with it — and puts more money in owners’ pockets.
But that’s not all you want to evaluate as a vacation rental owner: the lowest rate you’re willing to charge in today’s market should also be in question. If you’re not seeing revenue where you want it — and are watching ADRs drop all around you — it may feel like the best next step is to increase that bottom floor. But it’s a balancing act: while raising your minimum rate may get you more money per booking, you risk pricing yourself out of getting more bookings altogether. In the end, this could lead to less overall revenue.
That’s why Evolve takes a collaborative approach to setting absolute minimum rates and lengths of stay with our owners. (Watch this video for more details.) They get final say on where that bottom floor for dynamic adjustments lies, though we may proactively reach out to walk through data analysis together and discuss adjustments that could help our owners’ homes beat the competition.
2. Adapting to Booking Window Changes
Right now, booking windows continue to show guests are planning ahead. With airfare expected to rise through spring and summer, and inflation at a high 6% (which, while down from this time in 2022, is still quite high compared to 1.5% in 2019), guests who may have historically taken last-minute trips may avoid impulse moves this year to allow themselves to budget and save for a trip amidst financial uncertainty.
This contributes to when you should lower ADRs to get bookings at the best price. Starting around November 2022, for example, Evolve saw last-minute travel (inside 14 days) quickly decline — a trend that carried into early 2023.
This motivated us to incrementally lower ADRs earlier in order to encourage upfront bookings (60+ days out from travel), when we could capture more revenue for owners. Competitors, on the other hand, may have waited too long, forcing a more drastic drop in ADRs at the last minute in an effort to grab anything — or else go unbooked. The result: in February 2023, Evolve captured bookings at ADRs that were, on average, nearly 11% higher than the market — earning 24% more base revenue per property, too.
3. Investing in Revenue-Driving Amenities
Offering highly-sought-after amenities can be the difference between your home being chosen over someone else’s in such a competitive market. From tricking out your outdoor living space with features like a hot tub, fire pit, or fully-furnished deck to adding indoor must-haves like high-speed internet, AC, and in-home laundry, it’s worth investing in the exact items guests are looking for when booking trips.
That’s why Evolve provides guidance on what amenities work best across regions. That way, you can financially plan and make an investment in ways that can directly (and positively) impact your bottom line.
4. Offering Flexible Policies and Guest Support
While ADRs are a strategic lever you should pull regularly, there are others available — including flexible cancellation policies, providing five-star guest support (and soliciting guest reviews), and strategically designing property listing content to show up in guest searches so they know your home is a solid option.
Not only do these efforts add value in guests’ eyes — making them more likely to book your home — but elevating your star power in these areas means you don’t have to rely solely on lower, lower, lower ADRs if your region is getting more competitive.
This is exactly what Evolve does for owners. While we dynamically adjust rates to stay on guests’ radars, we always pursue other tactics (including each of the above options) to make sure your revenue optimization strategy is a holistic one.
U.S. Regional Trends
As seen above, market supply is on a strong, upward trend across the U.S. But that doesn’t mean growth happens equally in each region.
It’s a mixed bag right now — some regions are seeing supply growth happen quickly, and that contributes to the increased competition per-property that can oftentimes necessitate lower ADRs in order to balance demand.
Other regions are more suppressed, with supply growth happening at a slower pace. Oftentimes this is due to local regulations, and it means there’s less competition all at once — so ADRS may be able to remain higher as demand growth catches up.
This translates into varying amounts of revenue growth seen across regions this winter when compared to 2019.
Remember, homes in different parts of the country can also perform similarly to those outside of their geographic region. For example, while a home in Utah is geographically in the Southwest, it can perform like a home in Washington that’s geographically in the Northwest. This is because the two locations have similar activities and interests for guests, so demand — and ultimately revenue — may look similar.
Now, let’s take a deep dive into the specifics.
Northeast Trends
Your home’s in the Northeast (or may perform like a Northeast home) if: Seasonal demand is focused heavily on water activities where guests are likely catching trout from the surrounding wooded lakes and streams, or hooking a shark in the rougher waters of the open ocean.
Many Northeastern homes can perform well in winter, thanks to proximity to popular ski resorts and being able to offer access to fun snow-filled activities. But with unusually warm weather and a severe lack of snowfall in January and February — enough so that some ski resorts were forced to temporarily close — guest demand dried up.
As a result, lower ADRs have been necessary — as are flexible minimum night stay restrictions — to help win bookings from the guests still interested in visiting homes in these areas.
With that, it’s not too surprising that most guests are planning trips through spring, as it’s an average of 43 days between when their trip is booked and planned travel dates. This is a bit further out from what owners saw at this time in 2022 (39 days), though it’s not quite as big of a booking window as was seen in 2019 (56 days).
So, owners should focus on what matters most to guests traveling in the warmer days ahead. They’re heavily looking for the ability to unwind in a hot tub — especially if there are great views — before heading inside for some family fun in a game room.
Locations seeing strong success:
- Dover, VT
- Londonderry, VT
- White Mountains, NH
Locations trailing behind:
- Poconos, PA
- Catskills, NY
- Adirondacks, NY
Southeast Trends
Your home’s in the Southeast (or may perform like a Southeast home) if: Guests book most often to enjoy seasonal outdoor comforts connected with sweeping mountain views, crashing coastline waves, or serene placid lakes.
A market supply and demand growth imbalance has been felt more in this region as demand continues to slow from record-highs in 2021 — particularly in remote, mountainous destinations that travelers seem to be less interested in visiting in favor of closer, more well-known areas.
A lack of snowfall played a role in many traditionally popular ski markets, too, with some ski resorts never fully opening.
To help drive bookings, ADRs have been set very competitively, especially in more saturated spots. Some have been able to get bookings at slightly higher rates though; typically this is in beach and coastal markets (think Hilton Head and Myrtle Beach), where guests already expect to pay a premium as they plan spring break and early summer vacations.
Right now, many traveling to this region are doing so within 45 days of their booking. This is smack in the middle of 2022 and 2019 trends, which sat at 40 and 50 days, respectively.
If owners don’t have them already, a hot tub and fire pit are key amenities to consider investing in to grab guests’ attention. Travelers are also eager to enjoy the natural beauty surrounding the area, so offering amenities that help guests enjoy their outdoor adventures (perhaps providing hiking poles and guide books; beach towels and chairs) can go a long way.
Locations seeing strong success:
- Waynesville, NC
- Charlotte, NC
- Upcountry, SC
Locations trailing behind:
- Pigeon Forge, TN
- Blue Ridge Mountains, NC
- Smoky Mountains, NC
Central Trends
Your home’s in the Central U.S. (or may perform like a home in the Central U.S.) if: Guests crave a long drive with the windows down to get away from the day to day, stopping at a cozy cabin, lakefront home, or beachfront condo for a nature-driven experience.
Inflation and high gas prices are likely a driving force behind the reduced demand this region has seen, on top of the standard lower levels in winter, as many areas in the Central U.S. are road trip destinations rather than those easily accessible by air travel. An increase in supply growth has also made it a more competitive region for properties, so owners have needed to take advantage of every opportunity to eliminate booking barriers and increase their home’s value in guests’ eyes.
That means competitive pricing and flexible minimum stay policies — both of which have helped, particularly during holiday periods when guests have wanted kitchen space for families to come together over a tasty meal.
Lower ADRs have also been useful when offered further out, as guests have become less interested in last-minute trips and instead are planning at least one month in advance. On average, booking windows are at 38 days, which is more than what was seen last year (30 days) but less than 2019 (46 days).
To nab the bookings up for grabs, owners want to showcase any scenic views their home can offer — bonus points if they can be enjoyed from a comfy outdoor deck or hot tub. Guests also appreciate any features and amenities that make it easy for them to enjoy time together, so make sure the kitchen is well-stocked, there’s plenty of seating in living spaces, and maybe offer board games and movies for laid-back entertainment.
Locations seeing strong success:
- Branson, MO
- South Padre Island, TX
- Brainerd Lakes, MN
Locations trailing behind:
- Galveston, TX
- Hill Country, TX
- Oklahoma City, OK
Northwest Trends
Your home’s in the Northwest (or may perform like a Northwest home) if: Year-round adventure is available for guests to tap into extreme activities like skiing and ice climbing in winter, plus hiking and biking in summer.
While the Northeast has struggled due to a lack of snowfall in some of their prime ski markets, the Northwest — particularly homes in Colorado — has maintained a fairly successful winter thanks to above-average snowfall.
Mountain homes in this region also tend to have one of their two peak seasons in winter, with many families taking advantage of outdoor opportunities around winter holidays, be it Christmas, New Year’s, Martin Luther King, Jr. Day, or President’s Day.
That guest demand has helped some owners with their seasonal occupancy goals, however bookings may be locked in at lower ADRs compared to last year as the competition increases at the per-property level.
Coastal markets in this region have expectedly suffered a bit more than their mountainous counterparts, as they typically don’t see high demand in winter and have experienced decline in guest demand compared to last year’s heightened interest.
Regardless of having a beach or mountain home, owners want to prep for spring and summer travelers — especially those looking to stay for extended weekends or longer. Short weekend trips haven’t been in as high of demand as guests start to plan further out, with booking windows lengthening to 47 days — a slight two-day increase compared to last year, though a whopping 21 days less than the 68-day average seen in 2019.
Investing in a hot tub is a big way to draw bookings, with the amenity being the second most-mentioned phrase among guest reviews. Visitors also really value being able to enjoy outdoor activities, so providing opportunities for fresh-air fun — like with an updated patio and entertainment space — can be the key to netting five-star reviews that help bring in both repeat visitors and fresh faces.
Locations seeing strong success:
Locations trailing behind:
- Denver, CO
- Bend, OR
- Puget Sound, WA
Southwest Trends
Your home’s in the Southwest (or may perform like a Southwest home) if: Year-round warmth gives guests the chance to unwind with a cup of coffee or glass of wine. And the views — there’s always great beach, vineyard, mountain, or desert views to soak in.
The Southwest saw record performance last winter, and while the same height of occupancy at high ADRs hasn’t quite been met due to economic considerations (high gas prices) and increased competition at the per-property level (large supply growth in snowbird markets), this region has performed strongly and is beating out both 2019 and 2021 seasons.
Guests have been most interested in snowbird locations they can stay in for a while (28+ days), though ski destinations are also performing well on winter holidays and weekends as snow bunnies hop over to enjoy more-than-expected snowfall. So while weekend rates have been held at a premium, ADRs may be lowered on weekdays to help encourage guests to stay a bit longer.
And though some are planning trips well in advance (typically those wanting to stay longer-term), the average booking window is actually a bit lower in the Southwest at 41 days (two days less than the national average). This is right on track with booking windows seen last year, but significantly lower than the 62-day average seen in 2019.
Now, owners want to start prepping for incoming guests for big spring events (like Coachella and Stagecoach in Palm Springs), with luxury amenities like pools and hot tubs working hard to win bookings. Guests traveling to this region also value beautiful homes that offer a clean and comfy stay, so investing in large, comfortable beds and sprucing up your outdoor space for privacy and scenery can be a major win.
Locations seeing strong success:
Locations trailing behind:
- Sedona, AZ
- Los Angeles, CA
- San Francisco, CA
South Trends
Your home’s in the South (or may perform like a home in the South) if: There’s heat and humidity, all day every day. Guests escape here to feel like they’re enjoying the tropics.
Similar to the Southwest, the South region has been experiencing strong performance this winter, with occupancy nearly at last year’s records thanks to high interest in snowbird markets and spring break destinations.
However, a fast-growing market supply has increased competition for guest demand, and homes with flexible minimum stay restrictions and competitive rates have seen more success than those without.
Booking windows have also lengthened by a single day compared to last year, averaging 42 days between booking and check-in. This is right on par with the national average (43 days), but it’s a whopping 38 days less than the average this region saw in 2019 (80 days) — so it’s worth noting guests are planning significantly less in advance than they may have in the past.
Properties in the South see strong performance in the summer, too, so owners should start to prep for those visitors. Many travelers bring the whole fam, so homes with lots of space and sleeping options are appealing, as are those offering supplies for a heartwarming cup of coffee in the morning or any other gesture of Southern hospitality. For those looking to make a next-level investment, private pools and hot tubs are often in high demand.
Locations seeing strong success:
Locations trailing behind:
- Orlando, FL
- Panama City Beach, FL
- Cleveland, GA
| *When evaluating vacation rental market data, Evolve looks at a subset of the U.S. market to compare against properties that are most similar to those Evolve manages. This is in an effort to remove any data bias and avoid misrepresentation of trend and performance comparisons that could be created by comparing properties that are not “like-for-like” with Evolve’s. “The Market” includes those in counties Evolve properties are located in. Within each county, the properties must be of similar types and bedroom counts, have similar minimum night stay policies, and have the entire home available to rent privately. Vacation rentals with dissimilar features — like those only offering shared rooms or any with 30-night minimum stay requirements — are not included in this data set. |