Lake Tahoe prides itself on being a year-round outdoor destination, with skiing in the winter and hiking, biking, and watersports in the summer. Property managers in the area have seen benefits and drawbacks of record snowfalls this year. Many ski resorts in the area extended their seasons, which kept occupancy rates high throughout the spring. May was a great month for vacation rentals, but the long winter and slow start to summer are starting to affect performance in the second half off 2019.
January was a great month, with higher Average Daily Rates (ADR), Available Occupancy, and Revenues Per Available Rental (RevPAR) than last year. February, March, and April saw higher Available Occupancy but lower ADR, and lower RevPAR as a result, than last year. The late snow turned the season around and May was an outstanding month – ADR was 6% higher, Available Occupancy was 16% higher, and RevPAR was 17% than last year. All three indicators dropped in July, which does not bode well for the summer season at Tahoe.
Available Occupancy was substantially higher from February through May as compared to last year. This trend turned around in July and Available Occupancy Rates dropped below the same time last year.
The increased visitation was likely driven by last-minute bookings; on average, guests booked one to two weeks closer to arrival from January through April. This could be in response to higher-than-expected snowfall. About 80% of Lake Tahoe visitors are from California, allowing these guests to book last-minute trips. The booking activity quickly slowed and the average window for May through July was one to two weeks further from arrival.
Average Daily Rates were lower than last year for most of the spring, meaning property managers were not able to fully capitalize on the higher occupancy rates. The late snow and short booking windows potentially caught property managers by surprise.
Revenue Per Available Rental (RevPAR) is perhaps the best indicator of a vacation rental company’s performance, and concisely shows the seasonal trends in the Lake Tahoe market this year. RevPAR was higher than last year from April through May as guests continued to book trips for the late snow. In June and July, RevPAR dropped far below last year.
Overall, the data shows an interesting season at Lake Tahoe. The disconnect between ADR and Occupancy during the spring implies that rate-setting was not easy. There’s no question that the record levels of snow were a boon for vacation rental property managers in May but as winter weather continued into June, the destination’s summer got off to a slow start. The summer season may end on a high note – August ADR and RevPAR are trending higher than last year. And, while odd weather patterns certainly contributed, we’ve seen similar trends elsewhere in the country for 2019.
The industry and weather may always be unpredictable, but Key Data’s key performance indicators provide analytical capabilities so you can be prepared for everything from unexpected snows to shorter booking windows.