Vacation Rental Industry Trends:
Spring 2023
If your property stands out from the crowd, there may be a ray of sunshine on the horizon.
We’ve said it before, and we’ll say it again — vacation rental industry trends are always changing, and this spring has been no exception.
Supply and demand growth is pressing on thanks to the continued rise in popularity for both guests and investors hoping to provide an experience that meets the needs of travelers wanting to stay in a short-term rental.
But that growth is still happening at an unbalanced rate (like we reported last summer, fall, and winter). It’s making the market more competitive than it’s ever been, and economic instability infuses an extra layer of unpredictability.
It all ladders up to the fact that, if your rental was available for bookings at this time last year, it’s unlikely to see the same performance as it did then.
And if you want to earn as much as possible in today’s market, you need fresh revenue optimization strategies — including strategic thought into the amenities offered — to make sure you win guest bookings over nearby competitors.
This is why now is the time to have a team of tuned-in experts on your side. As summer starts, it’s important to have industry pros and advanced technology available to help you proactively adapt to changing trends, level up your hospitality, and keep your home competitive — so you don’t get left behind.
Your Seasonal Snapshot
Here’s a performance overview for the spring 2023 season:
Current Market Supply
(available listings)
Spring Market Demand
(total nights booked)
Evolve's Total Spring Revenue
per Property
*Get more details on how and why we evaluate market data here.
As far as market supply and demand go, both are still growing, and by quite a lot compared to 2019. In fact, demand is still hitting all-time highs, as more and more guests look to book a five-star vacation rental experience.
But, market supply growth is happening at a faster clip than market demand growth, causing total revenue per property to be down year over year (YoY).
Continued economic strain — like interest rates getting yet another increase — means unpredictability is also still at play. But there are some glimmering rays of sunshine pointing us to a potentially brighter summer: inflation dropped from 6% in February to 4.9% this April, and domestic flight prices are down 19% from last year.
More good news: while the supply and demand growth gap seen in winter still remains, it could be melting thanks to a more stable supply growth rate juxtaposed against an increasing demand growth rate.
And, while total revenue per property is down YoY, it’s still up compared to 2019 — quite a feat in this more competitive landscape.
Don’t forget, 2019 is the most stable baseline travel businesses have to monitor performance against in order to avoid a skewed perspective thanks to 2020 and 2021’s breaks from the norm. So when comparing to 2019, you can see total revenue growth still remains strong at the per-property level, and investing in vacation rentals has provided valuable benefits for owners.
Now, here’s a closer look at what’s happening with supply and demand.
Supply & Demand
Since August 2022, each month there has been YoY supply growth at a rate that continues to hover in the 20s, averaging right around 22% per month. This signals a stabilization trend in supply growth — more properties are being added to the vacation rental industry each month, but at a steady pace.
Meanwhile, YoY demand growth has been slower, coming in at low teens or single digits each month. While this is still the case, in January 2023 a more steady increase began — with demand growth bumping up about 2-3% each month compared to the one prior.
This means the gap between supply and demand may be shrinking a bit. April bucked the trend and took another dip in demand growth, but early signs of summer performance show another upswing may be on the horizon.
These quick changes in demand growth are one of the main reasons it’s so important to be smart with your revenue optimization tactics, making sure they work in the market as it is right now — rather than the way it was last month or last year. This includes how you set your rates, as it’s important to constantly shift to (and influence) buyer behavior. More on this in the next section — along with other tactics you can use to boost earnings.
How Owners Can Pivot in Today’s Market
With vacation rental industry trends changing so quickly, you simply can’t take a one-size-fits-all approach and need to remain nimble when trying to outperform in the current climate. Here’s what our experts recommend doing with how the market is performing today.
1. Set Competitive Daily Rates
This is one of the best ways to lock in harder-to-win bookings in a changing market. When demand is strong somewhere — meaning your vacation rental is more likely to compete for bookings at higher rates without being priced out — you want to set high daily rates.
But when demand is lighter, it’s key that you appeal to guests with lower pricing if you want to compete for what’s available.
Depending on your region’s activity (more on this below), this could mean average daily rates (ADRs) should be different from last month, last year, or even years past. It’s all about adapting to today’s market, and continuously monitoring both large and small market shifts that influence ADRs at any given time.
Evolve’s revenue experts do this daily to help owners outperform the competition. This spring, for example, ADRs in the overall market continued to pace behind what was seen at this time last year (again, indicating the market is different). Keeping a close eye on region-by-region trends, fast pivots helped capture bookings at higher rates in areas where supply growth was balancing out and demand growth was on the rise. In areas where supply growth continued to pace well ahead of demand — giving guests more homes to choose from — Evolve set lower, but still competitive rates to stand out in the crowd and lock in bookings.
Overall, this tactic works: as many traveled for spring break in destinations across the U.S., Evolve secured bookings at ADRs that were, on average, nearly 8% higher than the market this March and April.
2. Capitalize on Booking Window Changes
Watching for pivots in booking behavior — and referencing historical data for additional guidance — is another big way to influence just how much revenue you earn. Seasonal trend shifts can inform where you set your rates, how long you hold them there, and when you should lower to capture interest from last-minute bookers so you can avoid having an empty property.
Take spring, for example. While winter showed many guests were planning ahead and not taking last-minute trips, the spring break holiday — and softening of both inflation and domestic airfare costs — meant more travelers would book trips within 14 days of arrival when they had the flexibility to wait for last-minute deals.
So, it was all about capturing as many bookings as possible from those who didn’t have the flexibility to wait — or who simply felt more comfortable getting their plans in place — and setting competitive prices that would appeal to them and maximize earnings for owners.
As we crept closer to prime spring break travel dates, properties that remained unbooked were up for grabs by those waiting to make a last-minute booking. That signaled when it was time to start incrementally lowering rates, appealing more and more to that group of travelers and securing more bookings along the way.
Utilizing this knowledge as one piece of a rate-setting approach is something Evolve does daily. And it works time and time again: here, it allowed Evolve to truly maximize earnings both leading up to and during that spring break surge, resulting in nearly 5% more base revenue per property than the market.
3. Offer Flexible Policies and Guest Support
Adjusting daily rates to market changes isn’t the only thing you can do to maximize revenue. Providing flexible cancellation policies, requesting guest reviews for better property listing performance, and strategically designing listing content to show up in guest searches are all ways to tip the scales in your favor — and convince potential guests to book your home over someone else’s.
It also means you don’t have to rely solely on lowering rates if your region is getting more competitive. This is exactly why Evolve keeps each of these tactics in our playbook when customizing holistic revenue strategies for owners.
4. Level Up Your Hospitality
With the vacation rental industry becoming more and more popular for guests, investment-minded owners who want to take advantage of that growing demand should elevate their offerings to make sure guests have nothing but a five-star experience in their home.
That means not only doing the basics — like fully stocking your kitchen and providing reliable WiFi — but also offering amenities that guests are looking for when booking a stay in that specific region at that particular time of year.
Once guests are in-home, it’s all about providing next-level touches that help guests sink into vacation mode. Leaving a thoughtful welcome gift, providing entertainment options for the whole fam, and accommodating pet-friendly travelers can all help you lock in five-star reviews that encourage those guests to book again and tell future potential guests that your home is worth their valuable PTO.
U.S. Regional Trends
Vacation rental industry trends are not only changing at a national level, they’re also changing in different ways across regions. Some are seeing growth happen quickly, while others are moving at a slower pace, changing the degree of competition in one area versus another.
This translates into varying amounts of revenue growth seen across regions this spring when compared to 2019.
Let’s take a deep dive into the details.
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.
March and April tend to be more shoulder-season months for the Northeast, with little-to-no spring break demand. The guest interest that does exist this time of year is usually from those who don’t live far from popular ski resorts, taking quick trips to squeeze in a few extra runs before hanging up their gear for the season. But with poor weather conditions this winter, that interest waned and many resorts closed early.
With that, it’s not too surprising that most guests — and owners — have their eyes set on summer travel. Right now, it’s an average of 38 days between when a trip is booked and planned travel dates. This is a bit further out from what owners saw at this time in 2022 (35 days), though it’s not quite as big of a booking window as was seen in 2019 (48 days).
While it’s quiet, owners should focus on routine maintenance work. Air conditioning problems were the biggest complaint from summer guests last year, followed by water pressure and temperature issues — so you want to make sure yours are all in tip-top shape to avoid a bad review.
It’s also good to focus on what matters most to guests traveling during the brighter days ahead. They’re looking to fire up the grill and sit by a campfire, so make sure they’re cleaned out and ready for use before check-in. And because guests visiting the Northeast love water activities, offering complimentary outdoor gear — like fishing equipment or paddleboards — could increase your home’s booking potential.
Locations seeing strong success:
- Lancaster, PA
- Dover, VT
- Londonderry, VT
Locations trailing behind:
- Poconos, PA
- Catskills, NY
- Bethany Beach, DE
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.
Aside from coastal markets (think Myrtle Beach and Hilton Head), many areas in the Southeast see their off-season in spring as ski markets wind down from winter and mud season takes its reign before summer. This was felt even more this year due to the lack of snowfall and, similar to the Northeast, led to many early ski resort closures.
Bigger cities in the region were still able to capture weekend demand, though — especially when homes had shorter minimum lengths of stay (think two days instead of three or more) and prices were set competitively throughout the week (not just on weekdays).
Looking ahead, the Southeast usually sees most of its demand in summer months — again primarily in beach markets or in more mountainous areas (like the Carolinas) where guests can hit the hiking trails. Many are traveling within 42 days of their booking, giving owners time to create the perfect vacation rental experience.
That looks like a whole lot of peace and quiet, as guests rave about easy access to the beach or having a place to unwind at the property — like in a hot tub or around a fire pit. Owners who go the extra mile often earn starry-eyed reviews when visitors are made to feel at home, too, so look for ways to give that extra warm welcome.
Of course, a busy summer season also means more foot traffic — which can lead to more complaints around cleanliness. Last summer, guests in the Southeast were frustrated most often when they arrived to dirty floors and dishes, a lack of toiletries, and bug problems. So take the time to plan pest control treatments, consistently tick all the boxes on your cleaning checklists, and keep inventory updated so you and your service providers know when it’s time to re-stock.
Locations seeing strong success:
- Massanutten, VA
- Raleigh, NC
- Charlotte, NC
Locations trailing behind:
- Hilton Head, SC
- Blue Ridge Mountains, NC
- Wintergreen, VA
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.
Spring saw mixed performance across the Central region, as some locations — like Lake of the Ozarks and Austin — get lots of spring break travelers thanks to warmer weather and special events. Homes in these areas did particularly well when lower (but still competitive) rates were offered further out, or when they leveraged proximity and amenities connected to events and attractions (like the South by Southwest film festival in Austin).
Other places, like Branson and Broken Bow, didn’t see as much demand as previous years. It’s also not quite as heavy of a travel season as the weather starts to warm up, so owners may have seen fewer bookings come through. In these areas especially, it’s important to offer slightly discounted rates during lower-than-expected demand periods, and lower length of stay requirements to give yourself a leg up on competing homes.
As we move into summer, guests are booking in this region roughly 33 days in advance (right around what we saw last year at 32 days). Owners should showcase any scenic views their home can offer — and pair it with all the amenities that make guests feel cozy and comfy (think: top-notch coffee or tea to enjoy on the porch).
Many traveling here do so in larger groups, too, so it’s important to make sure the basics are there for everyone. Always offer enough clean towels, have plenty of toilet paper and trash bags on hand and, if needed, replace any worn-out bedding to guarantee all guests get a good night’s rest.
Locations seeing strong success:
Locations trailing behind:
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.
Compared to other regions this spring, the Northwest had a decent March due to late-season snowfall in ski destinations, and a boost in April thanks to outdoorsy travelers visiting near national parks (think the Mighty 5 in Utah). This meant daily rates could be held a bit higher in these areas, particularly on weekends or during spring break.
But in quieter places with fewer outdoor attractions and where mud season began to take hold, demand declined a bit — so those are the areas that have needed more drastic pricing reductions to encourage interested bookers to make that click.
Across locations in the Northwest, owners should prep for summer travelers, since most are booking around 43 days in advance — an increase from the 37 days seen at this time last year. These guests are looking to cram as much adventure into their stay as possible, so they appreciate features that make their thrill-seeking days easier. This could look like providing complimentary gear — think hiking poles or trail maps — but it could also be simply making daily tasks easier. Responding quickly to questions, stocking the kitchen to avoid time-consuming grocery store trips, and making sure showerheads work for a post-adventure rinse can all earn rave reviews.
Visitors also really value being able to unwind after a hustle-and-bustle day — especially if they can do it outdoors. Investing in a hot tub can go a long way for those staying here, as can freshening up your patio and outdoor space with comfy seating, hammocks, and lawn games
Locations seeing strong success:
Locations trailing behind:
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.
Spring is very much a transition period for many areas within the Southwest. While there were small pockets of success — see Palm Springs as it played host to multiple festivals like Coachella and Stagecoach — overall the region struggled this season, with revenue growth in March dipping slightly below 2019’s performance before bouncing back in April.
Snowbird markets, like those in Arizona, performed well this winter — but there was a significant decrease in check-ins through spring, and there wasn’t as much demand for spring break travel here as there was in more coastal areas. (Though, it’s worth noting this trend falls in line with more traditional snowbird demand seen before 2020.)
This required a quick pivot to relax both length of stay requirements and ADRs that would keep homes competitive in the current market and appeal to those interested in shorter stays.
Now, the average booking window sits at around 38 days — right on track with booking windows seen last year (39 days). As they prep for guests, owners should make sure their pools and hot tubs are clean and ready for frequent use, given guests love to unwind in the water as they turn their vacation status on.
It’s also important to make sure the home feels like theirs. So housekeeping teams should aim to remove any trace of previous guests, spiffing up the space and flagging any signs of damage. And it should be easy for guests to access the property without struggling with locks or keyless entry codes.
Locations seeing strong success:
Locations trailing behind:
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.
March was a good month for homes in the South, thanks to peak snowbird travel and a month of spring break demand that makes for one of the busiest months of the year in this region. And while April brought slightly less demand as a shoulder month, adjusting revenue optimization strategies to remain competitive amidst the supply increase — and capture the guest interest that was available — ultimately resulted in higher total revenue growth per property than in the month prior.
Things don’t slow down in the South as summer starts, with people traveling from across the U.S. to enjoy beach vacations, watch sporting events, and have fun at festivals and theme parks. Guests are booking about 33 days before check-in (same as last year, but significantly below the 69-day average in 2019).
Family-friendly homes do well in this area, so owners should aim to make life easier for those traveling in a large group. Confirm the pool is clean and ready for splash-time, maintain the washer and dryer so it’s simple to run a cycle, and always make sure there are enough towels and toiletries (ideally two to three times your maximum occupancy) for both adults and kiddos staying in the home.
To really take it to the next level, remember why guests are traveling to this area. If they’re taking advantage of the beaches nearby, think about providing beach-friendly amenities like chairs, umbrellas, and coolers. Consider on-property offerings, too, like a clean grill that’s ready to be lit, or a high-powered blender so adults can whip up frozen drinks on the fly.
Locations seeing strong success:
Locations trailing behind:
- Kailua-Kona, HI
- Northwest High Country, GA
- Miami, FL
| *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. |