For many destinations across the United States, Memorial Day weekend signals the start of the peak travel season. However, this year has introduced economic uncertainty as expenses have increased and disposable income has decreased. Nearly two-thirds (59%) of American travelers surveyed by the U.S. Travel Association in May said that rising gas prices will impact their decision to travel in the next six months (Source). The economic situation has led to uncertainty about whether the vacation rental industry will keep booming and Memorial Day was one of the first tests. How did this year’s Memorial Day travel weekend fare in the face of the economic slowdown?
Adjusted Paid Occupancy performance varied: Some markets, like the Outer Banks of North Carolina; 30A, FL; Myrtle Beach, SC; and the Oregon Coast did see a decrease in occupancy compared to last year, but an increase over 2019. Other markets, like Ocean City, MD; Gulf Shores and Orange Beach, AL; and Galveston TX saw decreases over both 2019 and 2021.
Average Daily Rates increased: Across the United States, nightly rates during Memorial Day weekend increased roughly $75 (26%) from 2019 to 2021, and $48 (13%) from 2021 to 2022. Most of the markets above kept within a small margin of that average, except 30A where the ADR increased $138 per night.
RevPAR increases for all markets over 2019: Even in markets that saw a drop in occupancy from 2019 to 2022 RevPAR still increased. For example, Galveston, TX saw a 24% occupancy decrease from 2019 to 2022. However, with a nightly rate that increased almost $190 over 2019, property managers still saw an increase in RevPAR of $59.
Adjusted Paid Occupancy performance varied: Markets that are historically favored during winter months, like Jackson Hole, WY (+11%); Lake Tahoe, CA (+11%); and Park City, UT (+2%) all saw increases in paid occupancy over Memorial Day weekend 2019. Asheville, NC saw a decrease compared to the 2019 and 2021 holiday weekend; which may signal that travelers are no longer only interested in retreating to the mountains.
Average Daily Rates varied: Unlike in Beach markets, ADR has not consistently risen across mountain markets. Asheville, NC; Lake Tahoe, CA; and Park City, UT have all increased or stayed the same over 2019 and 2021. The Tennessee Smokies decreased $14 over 2021 but increased over 2019, where Jackson Hole, WY nightly rates have decreased $99 over 2019 and $211 over 2021.
RevPAR increased for all markets over 2019: Though the nightly rates in Jackson Hole decreased substantially over 2019, their occupancy increased enough to still see an increase in RevPAR. This trend is consistent across the United States; RevPAR increased substantially from 2019 to 2021, but dropped slightly in 2022.
Adjusted Paid Occupancy performance was down: Urban markets are still recovering from covid-related dips in occupancy. Almost all of the markets above saw decreases in occupancy over 2019 and 2021, with the exception of Washington D.C.; 2022 occupancy increased 2% over 2019 and 16% over 2021.
Average Daily Rates varied: Atlanta, GA and Phoenix, AZ saw minor decreases in nightly rates over 2021, but still increased over 2019. Austin, TX; Los Angeles, CA; and Palm Springs, CA have all steadily increased rates since 2019. Washington D.C., with an increase in occupancy over both 2019 and 2021, slightly lowered nightly rates over 2019.
RevPAR varied: Atlanta, GA (-$22, -$46); Washington D.C. (-$12, -$50); and Los Angeles, CA (-$9) saw decreases in RevPAR over both 2019 and 2021. Both Phoenix, AZ and Palm Springs, CA saw increases over 2019, but not 2021. Austin, TX has seen an increase in RevPAR of $20 over 2021; bucking the overall US trend.
Overall for Memorial Day weekend, the United States saw Adjusted Paid Occupancy drop 10% from 2021 to 2022 to 63%. Average Daily Rates increased from $290 in 2019, to $365 in 2021, to $413 in 2022. Though nightly rates increased over last year’s holiday weekend, it still wasn’t quite enough to increase RevPAR over 2021 (-$7). 30A, FL; the Oregon Coast, and Austin, TX, were three markets that mirrored these occupancy and rate trends, but actually outperformed the two previous years’ RevPAR. 30A increased their RevPAR over 2021 by 12%, and the Oregon Coast and Austin by 8% each. Our best advice during this economic slowdown? Keep a close eye on your pricing by reviewing ADR and RevPAR compared to Occupancy. Key Data can also help you compare your inventory to others in the market. Reach out to us at email@example.com if you’d like to review your performance!