Vacation Rental Industry Trends:
Summer 2022
What short-term rental owners need to know to maximize their home's performance.
Last year the U.S. vacation rental industry was record-breaking for many, so much so that there was a 33% surge in demand from 2019 to 2021.
That set the bar pretty high for a lot of short-term rental owners as we head into a peak season in 2022. And while summer is shaping up to deliver a much stronger performance than it did prior to the coronavirus pandemic (COVID-19), the market is different.
Inflation is on the rise, the national average gas price is nearly $5 per gallon, and airline fares are up 25%. These are all things that contribute to a supply growth that’s currently outpacing demand in many markets, giving owners a fresh set of challenges this season.
With that in mind, here’s an in-depth look at the vacation rental industry trends you need to know about — and how having Evolve as your teammate keeps you tuned in at the exact right moment to maximize your summer 2022 performance.
| Want to know more about what happened in 2021? Find more in-depth details at the bottom of this report. |
What’s Happening in 2022
Here’s a performance snapshot of what we’ve seen in the comparable vacation rental market* through May 2022:
- Market Supply (available listings): Up +12% YoY (+45% vs. 2019)
- Market Demand (total nights booked): Up +21% YoY (+47% vs. 2019)
- Evolve Total Revenue per Property: Up +6% YoY (+62% vs. 2019)
Why do we look at 2019 data?
COVID-19 put the travel industry through the wringer in 2020. Because that was such a unique and unpredictable time, it makes the data from 2020 pretty unreliable. That’s why companies within the industry often lean on data from more stable years (2019 and 2021) to help predict future trends.
Now, let’s break this down a little further.
As COVID-19 pushed people to find new ways to earn passive income, many owners entered the vacation rental industry and, in 2020, the comparable market saw a 13% surge in supply (available listings) year-over-year (YoY) compared to 2019.
Supply continued to grow at a healthy, sustainable pace through 2021 and into 2022, especially as guests began traveling again and owners saw more and more revenue opportunities in front of them.
On the guest side, demand really shot through the roof in 2021 as travel opened back up and vacation rental became the preferred form of accommodation. (In late 2021, 86% of surveyed travelers told Evolve they planned to book a vacation home in the next year.)
The second half of 2021 saw this growth settle into a more sustainable pace as well, which carried into the early months of 2022. But once inflation started showing up in the news around March (think: financial impacts of the Russo-Ukrainian war and record-high gas prices), the growth in demand started to slow — though it still sustained YoY progress — and that deceleration continued through May.
This means the economic environment is beginning to impact summer travel demand, and there will be more vacation homes vying for fewer guest bookings overall. So if owners want to remain competitive and maximize their earnings, the time to act is now — and that requires implementing forward-thinking strategies that help make sure homes get booked prior to the full effects of this trend hitting the vacation rental market.
How Evolve Is Responding to the Market
As always, Evolve is working day in and out to optimize performance and keep owners ahead of the competition. This is done in a variety of ways, including strong marketing, broad listing distribution, and dynamic revenue management.
Right now, in order to continue driving demand in slower areas, we’re providing lower average daily rates than what owners may have seen during peak summer season last year (though rates are still held high enough to capture a home’s maximum earning potential in this market). A few ways we do this:
- Lowering daily rates when and where demand has slowed in comparison to last year, indicating there’s a low likelihood of bookings coming in at certain times (i.e. we may discount weekdays to incentivize guests to stay longer)
- Raising daily rates when and where demand remains strong, indicating there’s a high chance of bookings coming in at certain times (i.e. we may hold higher rates on popular weekends and holidays)
- Relaxing length of stay restrictions sooner in areas with slower demand to provide guests the flexibility they want and owners the bookings they need
These adjustments are already driving positive performance, with Evolve seeing a 25% increase in total nights booked since this holistic strategy shift started being implemented in late May.
This is why it’s important to remember today’s vacation rental market is quite different from what it was 12 months ago. It’s also different from what it was six months ago. And it’s different from what it’s going to be a few months from today.
That’s simply a natural part of being in the vacation rental industry: it’s always going to be dynamic. And despite the headwinds currently facing the economy, Evolve works hard day in and out to quickly see what’s happening, expertly predict what’s going to happen, and adjust course as needed to set owners up for maximum success.
When looking at performance from January 2021 to May 2022 (as seen in the chart below), you can see this hard work come to fruition with growth in booking revenue per listing trending up when compared to 2019’s performance.
This showcases why Evolve never applies a “set it and forget it” approach — and why we help owners operate their vacation rental businesses differently from others in the market.
Our take is that if you behave like the market, you’re only going to match the market. But we want to help you beat the market.
So you won’t see us mimicking what others in the industry are doing. From the rates we set to the way we work with owners, Evolve’s success strategies are unique — and that’s why our owners perform better. In fact, they’ve seen over 20% more growth in vacation rental income than the market average since 2019.
Regional Considerations
With all that said, vacation rental industry trends can still vary from location to location — and homes in different parts of the country can even 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 these two locations have similar activities and interests for guests, so demand — and ultimately revenue — may look similar.
Now, let’s take a closer look at how the economic changes discussed above are impacting summer performance — and the strategies being implemented — from region to region.
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.
This area of the U.S. is currently seeing strong levels of demand, with summer guests booking, on average, 63 days ahead of check-in. This is a bit further out, so by strategically lowering rates now, owners can lock in more bookings while demand is high. If we were to hold on lowering rates until next month — when demand trends are signaling deceleration will continue — it could make it even more difficult to grab bookings at that time.
Success is already being seen with this approach. Properties that typically see a lot of weekend-heavy bookings (think: homes in the Poconos, PA and White Mountains, NH) are experiencing higher performance when lowering rates on more quiet weekdays. This strategy incentivizes guests to extend what may have started as a weekend getaway into a slightly longer trip, keeping an owner’s calendar full while still providing enough time for teams to prepare for the next guest’s stay.
Locations seeing strong success:
- Poconos, PA
- Catskills, NY
- White Mountains, NH
Locations trailing behind:
- Bethany Beach, DE
- Cape Cod, MA
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 waves on the coastline, or serene placid lakes.
Overall, homes in the Southeast have seen slower demand this year compared to other regions. This is largely due to lesser-known, more rural destinations capturing less attention than last year now that many travel restrictions have been removed.
That said, guests who are traveling to this area of the U.S. — mostly popular spots like Gatlinburg, TN and Hilton Head, SC — are booking, on average, 47 days prior to their trip. While those traveling in larger groups (like on family reunions) tend to book further out in advance, this region in general tends to see shorter booking windows, so owners can rely more on last-minute bookings coming through than others.
Locations seeing strong success:
Locations trailing behind:
- Blue Ridge Mountains
- Smoky Mountains
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.
For this area of the U.S. — a year-round destination that typically sees strong performance in January and February thanks to ski resorts and other winter activities — signs of unbalanced supply and demand appeared earlier than in other regions. This meant Evolve strategically lowered rates sooner, and brought the growth of demand up to meet the supply rate in many locations. Our revenue optimization saw direct success, with some areas now projecting to meet the same performance — or higher — compared to last year, with most guests booking an average 61 days ahead of their trip.
That said, not all locations in this region are pacing ahead of 2021’s success story — some are achieving equal or slightly above pre-pandemic levels of performance. For those, Evolve continues to price homes aggressively against the competition to vie for coveted bookings.
Locations seeing strong success:
Locations trailing behind:
- Park City, UT
- Yellowstone, MT
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.
Out of all Evolve homes, the Southwest is the region with the shortest booking window, with the average guest making reservations about 40 days ahead of their trip. (Travelers heading here really value the flexibility to make last-minute plans.)
Many properties are currently seeing strong summer demand, though setting lower rates — particularly on weekdays and after major holidays — can help fill an owner’s calendar. What’s more: if an owner is in an area with a strong mix of in- and out-of-state guests (like Lake Tahoe, CA and Galveston, TX), they are more likely to see higher resilience — and can therefore hold higher rates — against the slowing economy, as they’re less dependent on guests who have rising travel costs (gas, airfare) to consider.
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.
With fewer travel restrictions in place, popular family tourism destinations (like Hawaii and Disney World) are seeing the highest levels of demand in the South, and some are even able to book at rates slightly above 2021’s prices. Booking windows are also a bit shorter in these locations, with guests making reservations an average 42 days before heading out of office.
That said, right now this region overall requires lower rates in order to try to meet or exceed the performance that owners saw in 2021. This is largely because southwestern Florida (the area’s second largest subset) is not usually a summer destination thanks to 100+ daily temperatures and the beginning of hurricane season. Instead, most bookings happen in fall (around October and November) in anticipation of winter travel — so now is the time to price aggressively, allowing homes to grab last-minute trips despite demand being low. Owners can then expect bookings — and rates — to rise as snowbirds start to take flight.
Locations seeing strong success:
Locations trailing behind:
From the Archives: A Look at What Happened in 2021
Here’s a deeper dive into the various factors influencing the record-breaking year in vacation rental that many owners experienced in 2021.
This was the year the world was getting glimpses of a new reality thanks to the coronavirus pandemic (COVID-19), vaccinations rolling out, and an unprecedented desire to return to travel.
For many working in the travel space — including airlines and hotels — this was welcome news. Demand for these services all but vanished in 2020, decreasing 60% for airlines compared to 2019, and 33% for hotels as COVID-19 halted each in its tracks (making it the worst year on record for both).
Of all the industries within the travel sphere bouncing back, the U.S. vacation rental industry saw unprecedented demand growth in 2021.
It makes sense if you really think about it. While people started to feel more comfortable getting on planes, international travel was still largely out of the question and many re-embraced the joy of a road trip.
And while people could stay in a hotel, if they did there were still amenity and restaurant closures, riding elevators with strangers, and wearing masks in public indoor spaces. None of these things really added up to a relaxing vacation experience.
But you know what did? Staying in a vacation rental.
People wanted private access to backyards, kitchens, and space where they could reunite with friends and family in a way that felt clean, safe, and fun. And with the rise of remote work opportunities, people realized they could work from a more comfortable space than a corporate office or a desk crammed into the corner of a hotel room.
All of that helped turn the industry into a $13.3 billion market.
That’s the story of nationwide short-term rental as a whole. The Evolve story? Even better.
As part of revenge travel, guests wanted to escape to destinations known for their peace, quiet, and access to the outdoors. Vacation demand for large, urban areas was down 46% in 2021, and when Evolve surveyed more than 5,000 travelers, consumers were most interested in exploring the outdoors, with secluded rural escapes and waterfront getaways at the top of people’s wish lists.
Evolve specializes in these types of vacations. With tens of thousands of homes across the U.S., in 2021 69% of inventory was in a smaller, quieter location (be it a tiny mountain town, quaint beach spot, or woodsy hideaway). Add in our constantly evolving revenue strategies — which covers everything from flexible cancellation policies and minimum stay requirements to dynamic rate setting — and Evolve owners saw an average of 13% more nights booked at rates that were 25% higher — netting out to an average of 38% more annual revenue than others in the industry.
Curious to dig into the “how” of it all? See if you qualify for our services and get looped in with our vacation rental experts today.
*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.