Vacation Rentals Blog

The New York Times reports that travelers took their Memorial Day Trips, but scrimped a bit. An article by Jeff Bailey says, “As the summer travel season began in earnest this past weekend, Americans were indulging their wanderlust, jamming highways, and filling airports, motels and eateries. But in some small ways, with possibly large consequences for the health of the economy, travelers interviewed across the country over the weekend said they were cutting their spending and downsizing their plans for summer trips. They're taking shorter, less expensive trips, as it sinks in that higher gasoline prices might be more than a temporary annoyance. Others are staying closer to home.�

It is easy to see that many vacationers will have to cut back this year, since higher gas and other energy prices wiped out almost a third of the collective raises consumers earned last year, according to the United States Conference of Mayors. Even though most people are loathe to give up their summer vacations, the increased cost of gas, hotel room rates and airfares will have an impact at some point. We think that the impact will be along the lines of what the New York Times reported for the Memorial Day break. People will look for ways to cut expenses such as taking shorter trips and staying closer to home.

For any first class vacation rentals in easy driving distance of major population centers, business will be good. However, the vacation rental must be perceived as a good value. Since vacation rentals, with their cooking facilities and more space, start off being a better value than hotels, vacation rentals start with an advantage as travelers seek to cut expenses this year.

Posted by VRO at 01:14 AM | Permalink

A recent cover story in Barron’s (Subscription Only) is devoted to the collapse of the second home market in many prime vacation areas. The article titled “The Big Glut--Trouble in Paradise� by Robin Goldwyn Blumenthal chronicles the decline in prices of prime properties in such posh areas as Naples, Florida, Cape Cod, and Barnstable, Mass.

Blumenthal reports that, “The Naples experience is being repeated, to one degree or another, in a variety of other vacation hot spots -- from Palm Desert, Calif., to Phoenix, Ariz., to Ocean City, N.J.� He quotes a Scottsdale realtor as saying that Phoenix in recent years has been overrun by property flippers from California “--- unit sales now are down by 40%-42%, and the city's inventory of unsold homes has shot up more than five-fold, to 39,000".

With second homes accounting for 40% of all home sales in 2005 and with the huge run-up in prices in recent years, the market is probably due for a correction. The article reports that, “Tucson, Prescott and Phoenix in Arizona are estimated to be as much as 52% overvalued based on income levels, population densities and historical prices. Also high on the list: Bend, Ore., and New Jersey's Ocean City and Atlantic City, where homes are deemed overvalued by 50% and 60%, respectively.�

The good news for someone in the real estate investment and vacation rental business is that these market corrections generally present a good opportunity for an investment when the market is in a downturn. The prudent vacation rental investor will carefully study the market for vacation rentals, study the competition, and determine how many weeks out of the year that a property can be rented and at what price. After doing so the investor can determine what price to offer for properties that will be on the market.

Posted by VRO at 01:44 AM | Permalink

An article by Oren Dorell of USA Today reports that, “Even with average gas prices 75 cents higher than last year, the number of travelers using cars, planes, trains and cruise lines will likely increase by 1% compared with last year, according to a survey by the AAA automobile club.� Dorell says that 37.5 million people plan a holiday trip.

The great majority of travelers, 84%, will travel by car, and 11% will fly, according to AAA. The most drivers, 7.5 million, will be on the West Coast, followed by the Southeast, the Midwest, the Northeast and the Great Lakes area. AAA predicts cities will be Americans’ top destination, favored by 23% of travelers, followed by small towns (22%), beaches (16%), lakes (13%), mountains (8%) and national parks (1%).

As we have commented all along, high gas prices have not yet slowed vacationers in what has been our best spring season ever. With the strong travel numbers reported for the Memorial Day holiday, the summer travel season is off to a good start. This is good news for the vacation rental industry, as well as the rest of the tourism industry. People may be more budget conscious because of high gas prices and much higher hotel room rates, but this should be a good development for reasonably priced and attractive vacation rentals

Posted by VRO at 01:26 AM | Permalink

In a year when travel costs are rising few people want to give up or curtail their summer vacations. There is another alternative, according to Tim Beyers, writing in The Motley Fool. Beyers points out most Americans don’t have the $3,600 laying around that a family of four might spend just for accommodations in Hawaii. He says, “But if you're like me, an average Fool with some disposable income, manageable debt, and big vacation ideas, then follow along. Here are my five steps to vacationing Foolishly.�

Beyers’ five tips include 1) Treat miles and points as income; 2) Learn the transfer game; 3) Book and pay in advance; 4) Track ever thing; and 5) Start early.

All of these tips are helpful if you have the time to play the game with maximizing your points. However, Our advice would be to start early and find the best possible deal on a vacation rental in a location where costs are reasonable. If you are flying to a distant location, then maximizing your points and learning how to work the system as suggested in this article can save you a lot of money. But, for the more than 80% of vacationers who take driving vacations, the vacation rental strategy suggested in our May 24 article is the best bet.

Posted by VRO at 12:40 PM | Permalink

The Monthly Lodging Report compiled by Smith Travel Research shows only flat occupancy gains for April over the same month a year ago, but average daily rates were up 6.7% and revenue per available rooms was up by 6.9%. The same trend was reflected in The Weekly Lodging Report for the week ending May 20.The year-to-date variance was up in all categories. Occupancy was up 2.3%, daily rates were up 6.5%, and revenue per available room was up a whopping 9%.

The flat occupancy rates for hotels in the last month and in the last two weeks of the current month may indicate that soaring room rates in many big-city and destination resort hotels is having an impact. Increasing gas prices get the most publicity, but many travelers we know are most shocked by high room prices in large cites and resorts. Also, anyone who flies regularly knows that air fares are increasing as seat availability gets tighter. It would appear that this is dampening the increase in business and leisure travel.

These trends also provide an opportunity for alternative lodging such as vacation rentals. Over 80% of vacation trips are driving trips. While gas prices have increased enough to make most vacationers a bit more budget conscious, they have not increased enough to make people forgo summer vacations.

Vacation rental owners who offer first class accommodations in desirable destinations are well positioned to increase occupancy rates this year. In our own experience, this has been the case, with significant increases in our occupancy this spring over a year ago. The principles that make this possible are available to VRO members in our Vacation Rentals Newsletter.

Posted by VRO at 09:01 PM | Permalink

"Good Morning America" real estate contributor Barbara Corcoran explained in a recent article how to save on summer vacations by booking a vacation rental. Her article explains how and where to find great rentals at affordable prices. She says, "Based on a one-week stay, you can save between 20 percent to 50 percent by renting a place rather than staying at a hotel."

We agree with most of Ms. Corcoran's conclusions, but not the one where she recommends waiting to get a great summer deal. Based on our own experience, the prime summer rental months are booked long in advance. Certainly, our own are. But she is correct in saying, "Midseason markdowns generally start after Aug. 15. Because many schools are starting earlier than ever, you can book these as early as the first two weeks in August."

The article also describes three of Ms. Corcoran’s favorite bargain locations. They are 1)Tybee Island, Georgia, just 20 miles from Savannah, Ga., 2)Jakes' Resort on Treasure Beach, Jamaica, and 3) Lake Ouachita, Ark.

Posted by VRO at 09:23 PM | Permalink

The Motley Fool has some good advice for anyone planning to take a trip to France. Moreover, many of the tips are applicable to trips to any vacation destination. It suggests five easy steps that include careful budgeting and how to save to cover your travel budget. It also tells you how to find the cheapest arfares.

The recommended step on lodging includes, "If you're going with friends, consider renting a house together. You'll save on both lodging and food." This is a good recommendation that applies to travel to many European locations as well as travel within the US. It has been true for some time, but with the large price increases imposed by hotels this year it is more true than ever.

Posted by VRO at 04:12 PM | Permalink

An article in the Arizona Republic reports some interesting things about the housing market. One of the conclusions of the article is that that the building trend for second homes will continue to be strong. The fastest growing segment of the housing market consists of people over 50. The National Association of Home Builders reports that people 55 or older bought nearly a fifth of the 1.1 million new homes sold in the country in 2003.

For the vacation rental market he most important finding of this article by Sue Doerfler and Susan Felt is that many of these homes will be second homes. Many are originally bought as investment properties and others as vacation properties. Our own conclusion is that a lot of these second homes bought for vacation properties will eventually find their way on to the vacation rental market. Our experience is that many people buy a second home, and eventually find that they spend a lot less time in it than they had planned. This factor, plus high carrying costs and the potential to cover their costs by renting them mean that these second homes eventually become vacation rentals.

In any event, it appears that the supply of second homes and thus, vacation rentals will continue to increase. The Arizona Republic Article reports "Second homes. Golf, sunshine, views or beaches are luring many of those 50-plus to buy second (or third or fourth) homes in increasing numbers. In 2005, 12.2 percent of the homes sold nationally were second homes, bought by their owners as vacation properties, according to the National Association of Realtors. An additional 27.7 percent were second homes purchased as investment properties. A 2006 NAR report noted that the typical 2005 vacation-home buyer was 52 years old, earned $82,800, and purchased a property that was a median of 197 miles from the primary residence. "

Posted by VRO at 02:26 PM | Permalink

Surprisingly, the Travel Industry Association of America (TIA) forecasts travel volume growth of less than 1 percent this year amid relatively soft travel intentions. According to TIA's Summer 2006 Forecast, Americans will take 325.6 million leisure person-trips during June, July and August 2006. A person-trip is one person traveling 50+ miles, one-way, away from home.

The Hotel News Resource quotes Dr. Suzanne Cook, senior vice president of Research for the Travel Industry Association of America as saying,�I am concerned about a number of economic indicators with gasoline prices and the pocket-book impact they're having leading the way. We've had gasoline prices jump up for the summer travel season before and weathered it but there are additional factors to be considered this year�

In spite of this gloomy forecast, The TIA predicts that, �Continuing past trends, air travel and hotel demand will rise even as hotel room rates and air fares go up.�

We do not agree with this gloomy forecast. The Weekly Lodging Report of Smith Travel Research has shown a very strong positive trend in lodging this spring. In addition our own experience in the vacation rental business shows much stronger bookings than last year. We are almost full through the mid-August. Anecdotal evidence from other vacation rental owners in prime areas indicates we are not alone.

Obviously, there is a point at which gas price increases could have an impact, but we have already seen a downturn in gas prices in our area. In our view there is much more to be optimistic about than pessimistic in the travel industry

Posted by VRO at 09:09 PM | Permalink

The Weekly Lodging Report published by Smith Travel Research for the week ending May 13 shows that occupancy is only up slightly over the same week a year ago. However, the Average Daily Rate (ADR) is up 7.2% and Revenue per Available Room (RevPAR) is up 7.3% over the same week a year ago.

This period of May is traditionally a rather slow travel period, just before millions of Americans will hit the highways and airlines for a Memorial Day break. Those with children are waiting for the kids to get out of school. The fact that the lodging numbers are this strong in May bodes well for the summer travel season. Our own experience has been that we have been almost completely booked in May, and we have reports of other vacation rentals with a similar experience.

Posted by VRO at 09:13 PM | Permalink

This summer vacation season, travelers are likely to face higher air fares, more-crowded flights and longer security lines at airports, reports Scott McCarthy of the Wall Street Journal. He indicates that airlines, airports, and Federal transportation officials are preparing for the busiest travel season in five years. With security staffing down at some big airports, this could mean longer lines at some security checkpoints.

McCarthy points out that there are some bright spots as well. Airlines have cut back on the number of flights, easing congestion at some airports. Therefore flight delays should be shorter and lees frequent this summer. However, flights will be more crowded. McCarthy says that full flights mean that travelers have a greater risk of being bumped, “The number of passengers involuntarily bumped from oversold flights is already climbing since planes are so full, up 27% in the first three months of this year, according to the Department of Transportation.�

The article also indicates that prices are also rising, with fares for summer trips already purchased are up about 10% over last summer, according to both Orbitz and Travelocity, two of the three big online ticket-sellers. However prices are not as high as they were in 2000 and 2001. While travelers cannot expect to see the bargain fares available last summer, vacationers are a resilient lot and the higher prices do not seem to slowing down vacation travel.

These findings are consistent with our own flying experience. Most of the flights around weekends seem to be oversold, with vouchers being offered as an incentive to take a later flight. We have found that if you wait too late, you risk being unable to book a flight at all. The best advice in McCarthy’s article is to book early, as prices will only go higher. Also you should make sure you have an assigned seat
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The situation in air travel is consistent with our own vacation rentals, which have booked up earlier this year than ever before. While most of our guests travel by automobile, our experience is consistent with the overall occupancy increases in the lodging industry.

Posted by VRO at 10:17 PM | Permalink

With gasoline prices soaring over the past few months, several destinations and travel organizations that depend on automobile travel to prosper have begun offering gasoline voucher programs to encourage visitors. Some of these initiatives are dusted-off versions of promotions from last year, when the travel industry was faced with a similar fuel scenario as the summer travel season loomed. Others are new�, reports Charles Leocha in an article in MSNBC.com. The article reports on ten places that do have free gas promotions.

However, the article reports that the interesting thing is how infrequently programs like this are offered. If history is any guide Americans can be expected to increase their travel, not curtail it. Certainly our weekly reports of occupancy rates and room rates confirm that the travel industry has experienced a boom thus far this year.

As to whether vacation rental owners should consider free gas promotions, your current occupancy and future bookings should determine whether you want to follow the lead of these 10 destinations that have chosen to offer such promotions. If you are sharing in the current strong performance of much of the lodging industry, there is no reason to do so. However, if occupancy is low, it may be worth a try.

Posted by VRO at 09:34 PM | Permalink

An article in the Miami Herald reports on the two books authored by Christine Karpinski, the foremost advocate of do-it- yourself vacation rental management. She has done a great job in showing ordinary people how they can afford to buy a second home and then more second homes if they are willing to spend the time it takes to handle all the details of vacation rental management themselves. She is a strong advocate of avoiding the high management fees of property management companies.

Ms Karpinski points out that you should plan to rent your second home for at least 17 weeks a year to pay the bills. I have read her first book, but not the second one. Her books tend to be a good manual for the beginning vacation rental owner, with lots of good tips on how to manage from afar.

We agree with most if not all of her advice. She recommends that vacation properties accept pets, a policy that will increase occupancy. While we are great pet lovers, we don’t agree that this is consistent with a luxury rental. All too often, you barely have time to get a property cleaned before the next guest is ready to check in. The odor of a pet cannot be eliminated in that period of time. Moreover many gests will tell you that they are allergic to pets, and this creates a real problem

Nevertheless, Ms. Karpinski’s first book was a good read and we plan to read her second book. She is a good evangelist of the vacation rental industry.

Posted by VRO at 11:00 PM | Permalink

An article in USA TODAY reports that after bouncing back a bit last year, the U.S. dollar has resumed its multi-year slide against the euro, just as the heavy summer vacation season kicks into gear. The greenback has dropped more than 6% in just the past three weeks — making everything from croissants in Paris to Vatican tickets in Rome that much more expensive for Americans
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The article by Gene Sloan reports that the decline has pushed the cost of a euro back up to $1.27, not far from its peak in 2005 and a dizzying 50% higher than five year years ago.

“You're dealing with $100-plus taxis, $50 per-person meals at a basic neighborhood cafe, $8 beers, and much higher rates than here on rental cars and gasoline," says Tim Leffel, author of The World's Cheapest Destinations.

As we have previously reported, hotel rates have risen sharply in major travel destinations in the US this year. While that USA Today article suggests other cheaper destinations, such as Eastern Europe, we suugest that this is a good year for vacationers to stay in North America and look for a reasonalby priced vacation rental on VRO or other directories

Posted by VRO at 07:29 PM | Permalink

The mass media is full of reports about soaring gas prices and how this will effect the public’s driving habits. As we scan the travel stories we often see speculation that vacationers will change their plans because of gas price increases. However, this speculation has not yet been borne out by the facts.

In Smith Travel Research’s Weekly Lodging Report for the week ending May 6, the lodging industry continues to enjoy a banner year. Compared with the same week a year ago, occupancy rates are up 6.2%, average daily rates (ADR) are up 8.5%, and revenue per available room (RevPAR) is up 15.2 %. While this data refers to hotels, it is very good news for the entire lodging industry, including vacation rentals.

Posted by VRO at 04:52 PM | Permalink

An article by David Batstone in USA Weekend Magazine examines some ethical questions involved in renting a vacation property. One of the questions examined involves a renter whose experience did not match what was advertised. The question is whether the renter was entitled to a partial refund. From the renter’s description, it does appear that the property owner exaggerated the property’s attractions and some of the advertised amenities were not in working order. Whether or not the renter got his refund, you can bet he will never rent this property again, and will advise his friends not to do so.

One of the requirements for being listed in VacationRental.org is that the owners never in engage in false advertising. In fact we always urge property owners to under promise and over deliver. In our experience with our own vacation rentals, we have found that the best advertising is to have satisfied customers. We have found that our need to advertise decreases each year and our occupancy rate increases as we provide customers with a good vacation experience, We are most delighted when guests reserve a place for the next year as they check out.

Posted by VRO at 09:25 PM | Permalink

The New York Times reports a reversal of what has been the trend in the Hamptons over recent years, more people are renting and fewer are buying this summer. The article by Valerie Cotsalas reports, “Potential vacation-home buyers seem to be hanging back amid rising interest rates and a slower appreciation of home values, with many houses currently for sale lingering on the market, according to interviews with about 15 real estate brokers over the last few weeks.�

Apparently a lot of rich people are renting and paying fabulous prices for the choicest properties. The overall strength of the vacation rental market in the Hampton reflects reports that we see from other prime summer vacation destinations, most of them without the kind of prices charged in the Hamptons. Vacationers in the Northeast might look for more reasonable locations, such as Providence, Rhode Island either on our VRO listings or on other sites.

Posted by VRO at 08:35 PM | Permalink

Many travelers are facing sticker shock as they plan their summer vacations this year. The price of a vacation is 5.4 percent higher this year than last according to the AAA. That means a family of four will average spending $261 a day for food and lodging. In the pricier destinations such as popular beaches and major cites the cost will be much, much higher.

However, the budget conscious family has many choices available that are quite reasonable. CNNMoney.com reports on 7 summer destinations—national parks in Canada to St. Lucia in the Caribbean---where prices are quite reasonable. The article reports that If you're looking for cooler climes and outdoor adventure, head north to one of Canada's 40 national parks, which are less crowded and less expensive than U.S. parks in the summer. For those looking for a quiet beach, the article recommends heading for the Caribbean where summer rates are half what they are in the winter. Heading to the Caribbean in the islands' off-season - when the weather is just 5 to 10 degrees warmer than winter - is one of the best ways to save on a summer vacation.

We at VRO could not agree more that there are a number of travel bargains to be enjoyed this summer from Canada to the Caribbean, as well as many American destinations in between. Some of our favorite choices are VRO listings in the Colorado Rockies , where high prices for the ski season have been greatly reduced for the summer season , the US Virgin Islands , and British Columbia

Posted by VRO at 07:52 PM | Permalink

For the week ending April 29, the Weekly Lodging Report compiled by Smith Travel Research shows strong gains in all three categories. Compared with the same week a year ago, occupancy was up 6.9%, the Average Daily Rate (ADR) was up 11.1%, and the revenue per available room (RevPAR) was up a whopping 18.7%.

While this is a survey of hotel accommodations, it is very helpful to vacation rentals. It shows that the travel industry is still booming in spite of high gas prices, and it demonstrates that vacation rentals are in a better position than ever to demonstrate that vacation rentals are a bargain compared to hotels.

Posted by VRO at 08:58 PM | Permalink

Recently, I came across an article about the importance of an attractive garden in the newsletter of PAII, the Professional Association of Innkeepers International, the trade association of B&B’s. The article stressed the importance of having your B&B stand out from the crowd by having a beautiful garden. From staying a quite a few B&B’s over the years, I know that many of the best ones do emphasize their gardens.

Once again, vacation rental owners can learn from B&B’s. While not every vacation rental owner can do much about their landscaping (such as those who own a condo), a great many can. It is quite surprising to look at the number of free standing vacation rentals that are advertised that have little or no landscaping. Those that pay no attention to landscaping and gardening are sacrificing a golden opportunity to increase rental in transitional months such as April and May.

Having a beautiful four season’s garden has always been an integral part of our marketing strategy. That is why we are almost completely booked in May. Take a look at your own property. If it is not beautiful in the month of May, you should rethink your landscaping. We will provide some tips on landscaping and gardening in a future edition of our Vacation Rentals Newsletter.

Posted by VRO at 02:26 PM | Permalink

Hospitality Trends reports that the March Travel Price Index rose 4.3 percent compared to March 2005 and 2.6 percent from February 2006. Gasoline prices increased 17.0 percent from one year ago. Lodging prices were up 1.1 percent compared to March 2005 and 5.6 percent from last month. Airfares increased 6.7 percent against twelve months earlier and 1.1 percent from the previous month.

These statistics were developed by the Travel Industry Association of America's (TIA). The Travel Price Index (TPI) measures the seasonally unadjusted inflation rate of the cost of travel away from home in the United States. The TPI is based on U.S. Department of Labor price data collected for the monthly Consumer Price Index (CPI). The TPI is released monthly and is directly comparable to the CPI.

Posted by VRO at 01:30 AM | Permalink

With nearly every trip expense going up, this is not the year for travelers to procrastinate about their summer vacations. According to a LA Times article by Jane Engle, “Even if you start planning now, surveys show, you're behind the curve: Many summer vacationers have been snapping up plane tickets and hotel rooms for months. That means fewer for you — and you may pay more.�

The article quotes an April Survey by Harris Interactive that says that nearly two-thirds of Americans this year are booking their summer trips at least two to three months ahead, according to an online survey of 2,327 adults; 8% started more than six months ago. Therefore even if you start planning now you are behind the curve.

As for costs the article says that, “a family of two adults and two children this summer can expect to spend an average of $261 per day for food and lodging, based on prices at more than 55,000 hotels and restaurants in AAA TourBook guides. Hotels will average $141 per night, up 9% from last year�. Of course such popular destinations as Hawaii and New York will be substantially more expensive.

The article offers some budget tips to travelers seeking the best fares and room rates, including reserving well ahead of time and being flexible on travel dates; midweek prices are usually cheaper.

For vacation rental owners this is good news, for it presents any opportunity to attain a higher level of occupancy for this season. This report is also consistent with our own experience, for we have filled most vacancies in our rentals through the middle of August, except for some midweek vacancies.

Posted by VRO at 08:25 AM | Permalink