Short term rental property managers routinely leverage enormous amounts of data on nightly rental rates, occupancy, and booking windows to adjust their business and marketing strategies. These insights into country and global-level data provide a fantastic overview of the macroeconomic trends affecting the worldwide travel market.
However, in order to create a successful vacation rental business, you’ve got to get a bit closer. While global, national, regional, and state-level data can help to gauge whether it’s the right time to enter the short term rental market for the first time, expand a portfolio or take on more properties as a property manager, it is still relatively high level. If you want to make informed decisions about adjusting nightly rates to boost occupancy, alter booking windows or improve a vacation home, the data you need is much more granular.
This is because even those areas that are very close together can see remarkably different levels of demand, creating drastic distinctions in short term rental performance data. When it comes to making informed decisions about investing in and managing a vacation rental, only localized data will do.
What That Looks Like In Practice
To illustrate this point, we’ve pulled together data from one of the most competitive short term rental markets on Earth. The UK is not just high up on international travellers’ wish lists, it is, in many areas, a melting pot of densely-packed towns and cities with very different personalities. Despite their proximity, you don’t have to travel far before the characteristics of their short term rental markets begin to change dramatically. Let’s see what that looks like, taking the month of April 2023 as an example…
Bristol and Bath lie in the beautiful, south west of England centered around the historic county of Somerset. Earlier this year Bath’s revenue per available rental (RevPAR) was a staggering 88.4% higher than its neighbor’s. Indeed, Bath’s performance was stronger across the board, with occupancy at 42% vs 36% and average daily rates (ADRs) 62.9% higher. That’s a terrific margin of difference for two places that are only 5km apart.
On Merseyside, halfway up the UK’s west coast, it’s a similar story. Vacation rentals in the former industrial heartland of Liverpool notched up RevPAR that was 29.4% higher than the nearby town of Warrington, even though they’re only 6km apart.
Similarly, Manchester achieved a vastly superior RevPAR (93.7%) on significantly lower occupancy (-20.7%) when compared to Rochdale — just 4km away.
Birmingham, for over a century considered by many to be the UK’s second city — lies only 10km from Coventry and yet was delivering occupancy that was 25.2% higher alongside RevPAR that was 27.4% greater.
Finally, Portsmouth and Southampton — two cities central to Britain’s naval and maritime history (and sat on each other’s doorsteps) — also experienced surprisingly different fortunes. Despite very similar nightly rates, Southampton achieved better occupancy (12.7%) and RevPAR (9.8%).
All the subtlety in this data would be lost if looking at it from a regional perspective. And these findings hint at the even greater insights that are available to property managers who look at the local competition in even more detail. Ignoring the local picture would make it almost impossible for property managers to respond effectively to the strengthening or weakening performance of those short term rentals that constituted their true local competition. And remember, property prices vary a lot too so, when making an investment, you will have to take account of all these factors to make an informed decision.
We’ve used distinct places to illustrate how localized data is extremely important — but large variations can also exist within smaller communities. Only by using ProData to benchmark your short term rental portfolio alongside custom comp sets will you understand what’s truly going on in your local vacation rental market.
- High-level data covering regions, states, counties and countries is valuable to macroeconomic analysis and creating an investment shortlist
- However, vacation rental performance can vary dramatically over small distances so it’s important to use granular, localized data to adjust business strategies
- Not only will it allow you to maximize occupancy and revenue, it will also help you to manage owner expectations too.
Want to see Key Data in action and learn how custom comp sets could supercharge your short term rental strategy? Book a demo with a member of our team today.