U.S. August Overview

September 20, 2022

State of the U.S. Economy

The inflation rate in the United States decreased for the second consecutive month to the lowest rate in four months. In August 2022, inflation stood at 8.3%, down from 8.5% in July and the year-to-date peak of 9.1% in June. In short, Americans are paying an average of 8.3% more for goods and services than they were last year at this time. 

Gasoline costs, at 25.6% more than in August 2021, are down 12.2% compared to July 2022. 1

Airfare has increased 33.4% over this point last year, which is higher than 27.7% in July. However, this figure is down 4.4% from its YTD peak in May. 2

1 Bureau of Labor Statistics; U.S. Department of Labor. “Consumer Price Index - August 2022”

2 Bureau of Labor Statistics; U.S. Department of Labor. “Airline fares in U.S. city average, all urban consumers, not seasonally adjusted”

U.S. Vacation Rental Performance - August 2022

Occupancy
Adjusted Paid Occupancy Rate = Guest Nights / (Total Nights - Owner Nights - Hold Nights)

The United States Adjusted Paid Occupancy Rate for August ended at 54%, which was 4% higher than in 2019, and 8% lower than in 2021. The decrease over last year was somewhat expected as pent-up demand from pandemic shutdowns declined. The Hawaiian Islands continued to have increased popularity over 2019; August was up 10% over 2019. In mid-July, pacing data for the Southwest was showing a 10% decrease in occupancy from 2019. However, final occupancy figures show a 2% increase over 2019 and a 9% decrease over 2021 for the region. The Southeast U.S., one of the quickest to recover from the pandemic and a region with large growth last year, saw a 10% decrease in its occupancy from last year to this year. The decline from last year and growth from 2019 suggests that traditional demand patterns are returning. 

Rates
Average Daily Rate = Unit Revenue / Guest Nights

As occupancy returns to normal, rates are declining in some regions. For the United States, the average daily rate was $370, a 24% increase over 2019 and a 4% increase over last year. Hawaii, with an ADR of $469, had the highest rates and also the largest increases from prior years at 57% over 2019 and 18% over 2021. The Southeast U.S., with an average daily rate of $379, saw increases over both 2019 (+13%) and 2021 (7%). The Southwest U.S. and Western U.S. regions, which were pacing behind 2021 in July, ended August with 7% and 6% decreases from 2021 (-4% and -5% behind anticipated decreases). 

Revenue
Revenue Per Available Rental = Unit Revenue / Total Nights

Across the U.S., RevPAR for August 2022 was $158, which was a 26% increase over 2019 but a 9% decrease over last year. Hawaii was the only region above that had a higher RevPAR than last year. A substantial 72% increase over 2019, and a 15% increase over 2021 leaves their August 2022 revenue per available rental at $222. All other regions saw increases over 2019, ranging from 17% in the Mid-Atlantic States to 31% in the Southeast. However, due to decreased occupancy rates and lower nightly rates than in 2021, RevPAR fell from last year’s peak. The Southwest was impacted most; due to a 9% decrease in occupancy and a 7% decrease in rates, RevPAR fell 20% compared to August 2021. 

Average Length of Stay
Average Length of Stay = Total Nights Sold / # Guest Checkins

Across the United States, the average length of stay did not vary significantly from previous years. In August 2022, the average length of stay of 4.7 days was only 0.2 days shorter than in both 2019 and 2021. The Rocky Mountain States, where the average stay was roughly half a day longer, was the only region that saw an increase in ALOS over 2021.  

Average Booking Window
Average Booking Window = The average number of days between a guest making a reservation and checking in

Booking windows were significantly shorter during 2020 and 2021 than in 2019 as guests planned their trips closer to the date of their arrival. The U.S. average of 75 days was 10% shorter than it was in 2019 (- 8 days), and 3% shorter than the average in 2021 (-2 days). The Rocky Mountain states was the only region with an increase in booking windows from both 2019 and 2021 (+3 days and +2 days, respectively).

Booking Windows by Arrival Period

In the United States, reservations with check-ins within 60 days of booking are still dominant; in fact, 68% of the reservations made in August had check-ins within 60 days of booking. In August, the U.S. saw an increase of 34% in reservations per active property over 2019 and an increase of 3% over last year. Reservations made during August with check-ins less than 30 days from booking have decreased slightly (-2%) over 2021 but increased slightly (+2%) over 2019. However, reservations made with check-ins more than 60 days from booking have remained consistent with 2021, decreased by 5% over 2019, but still account for a third of the reservations made. Though the 30-60 day window increased most in August 2022 compared to both previous years, most reservations (45%) in the United States were still made within 30 days of check-in. The Mid-Atlantic is the only region where stays within 30 days of booking increased over both 2019 (+8%) and 2021 (+4%), and Hawaii is the only region where check-ins more than 60 days from booking made up the majority of their August reservations (59%). The strong demand for arrivals within 30 days of booking implies that shoulder-season occupancy will remain strong.

A Look Ahead

  • Adjusted Paid Occupancy for holiday stays is pacing only slightly below 2021, but 11% ahead of 2019 for Columbus Day Weekend, 5% ahead for the week of Thanksgiving, and 2% ahead for the Christmas Holiday.
  • Nightly Rates are averaging roughly $23 ahead of 2021 and $100 ahead of 2019 through the rest of 2022.
  • On-the-books RevPAR is averaging roughly $1 behind 2021, but still $23 ahead of 2019.

Overall, property managers will need to carefully monitor changes in occupancy and rates over the next few months. Economic conditions and softening demand will be tricky to navigate, along with the continuing return of pre-pandemic trends.

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