2022 Summer Rental Season: What to Expect

We had a phenomenal year in 2021, setting gross rent and advance booking records like never before. On average, rental rates were increased by 30 - 35% over 2020 rates, which is a tough act to follow. And while 2022 started off steady, things have changed since the first quarter. In early 2022 we saw a slight decrease in demand vs 2021. However, we are seeing a significant decrease in demand for beach vacations for the second half of 2022.

Our Chamber and Visitors Bureau recently sent an email to local businesses with the 'current state of booking trends' so to speak. Their message to all of us is that booking trends and rates are going back to the last 'normal' year along the Gulf Coast, which was 2019. At that time, rates were lower, the majority of visitors came to our area for shorter visits, and vacations were booked closer to the time of their arrival. Simply put: Don't expect another 2021.

Here are some things to consider that are affecting travelers currently:

• There is no more stimulus money. We saw a huge increase in travel when consumers had extra money in their pockets.

• Previously remote workers are returning to the office and can no longer work from anywhere.

• Beach fatigue. After coming to the beach the last few years, travelers are now going to other destinations that were not open in 2020 and 2021.

• In 2022 there were only three prime weeks of Spring Break, as many schools took their break at the same time. This resulted in less occupancy and less revenue during that rental season.

• Fuel prices

• World events

There are two aspects that we need to be mindful of going into this rental season: Rates and length of stay.

• Rates: An intelligent and proactive rate strategy is critical in a market such as this. Keep in mind that higher rates don’t equal higher occupancy or higher revenue for the year. When increasing nightly rates results in a decrease in occupancy, you have priced yourself out of the market. In order to maximize year-long revenue, we must stay vigilant and flexible as we adjust rates and determine what is appropriate to achieve the highest occupancy.

• Length of stay: As mentioned earlier, travelers are going back to shorter vacations. It's important that any properties with weeklong restrictions reach out to us and discuss lifting those restrictions.

There is some good news. The data we received from the Chamber and Visitors Bureau shows that itripvacations Alabama Beaches APO (Adjusted Paid Occupancy), when compared to the Florida-Alabama Panhandle market, is trending higher than the market in occupancy for peak season and producing more revenue than the market on most days. While there are still a lot of unknowns in the world today, the beach is a place that makes us feel safe, improves our overall well-being, and lifts our mood. We're confident that people will continue to find their way back to the beach this year, but it is crucial that we maintain realistic expectations about this upcoming 2022 rental season.

** Florida-Alabama Panhandle: 136 property management companies, +/- 20,500 properties.