Vacation Rentals Blog

July 31, 2006. An article in the Orlando Sentinel reports that tourism officials are preparing fresh offensives to combat slumping hotel occupancy rates and decreasing interest in Central Florida as a vacation destination. “Demand for Orlando-area hotel rooms declined 2.8 percent this year and a pair of recent market studies show potential travelers aren't as interested in Central Florida as they had been�, the Sentinel reports.

Tourism officials are preparing fresh offensives to combat slumping hotel occupancy rates and decreasing interest in Central Florida as a vacation destination. State and local tourism officials told a gathering of hotel industry representatives recently that stepped-up advertising campaigns are needed to reinvigorate traveler interest in Central Florida.

However, the article by Christopher Boyd and Beth Kassab goes on to say, “Even as the tourism agencies prepare to unleash advertising, it is unclear whether travel to Central Florida is really suffering. Traffic at Orlando International Airport is up this year, and Peeper said part of the reason for declining hotel occupancy could be the growing number of time-share units, many of which are rented to nonowners…… the region now has about 21,000 time-share apartments, a 49 percent increase from 2000. About 50 percent of the time-share units are sold as hotel rooms on any given night,"

Another factor that the article does not mention is the number of luxury vacation rental homes that are available at modest prices in the Orlando area. These vacation rental units, many with their own private swimming pools, are a bargain for families or groups of friends when compared to comparable luxury hotels.

Posted by VRO at 01:29 AM | Permalink

July 30, 2006. The Great Smoky Mountains National Park is the #1 most visited national park. It is rich with history you can touch and beauty you can see. It is within easy driving distance of major population centers in the Eastern United States. It is not surprising 9-10 million visitors arrive annually.

The park is also rich with many luxury vacation rentals, several which can be found on VacationRentals.org. A mountain vacation rental is the best way to see and experience the unique beauty and nature of the Great Smokies.

An Article by Donna Vissing, the Auto Channel Travel editor, does a good job of describing the attractions of the Great Smoky Mountains National Park. She points out that, “The Park personnel do an excellent job making it visitor and senior-friendly. Personalizing your time in the Great Smoky Mountains can easily be planned by starting at the Visitors Center. The Center hosts a historical film presentation, Park Rangers are available to answer questions, and there are numerous self-tour and trail guides available for you to utilize in planning your exploration�

Among the attractions are the waterfalls and hiking. Also, the mountains offer many other natural activities such as rafting, trout fishing, wildflower exploration, night bat walking, nature walking, and a treasure chest of photographic opportunities.

It is hard to go wrong in picking the Great Smokies as a travel destination in any season. The Park is open year round and admission is free. Vacation rentals are abundant and reasonably priced for families. For more information you can visit www.SmokiesInformation.org.

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June 27, 2006. The Wall Street Journal (subscription only) reports on the "friend-trip," in which people join up with friends, relatives or other families. It can be a memorable way to bond and cut vacation expenses at the same time. It's a niche the travel industry is increasingly targeting, especially with hotel and other vacation costs up sharply this summer. It is a market where the vacation rentals industry has the advantage. In fact some hotels are now building cottages to tap that market.

The Journal article quotes a spokeswoman for Jekyll Island Club Hotel in Jekyll Island, Ga., who says that multifamily trips are "a big part of our market now. The Jekyll Island Club recently spent $5.5 million renovating two cottages, one with 10 rooms and one with 13, that groups can book in part or whole.

Another example is Paradise Point Resort & Spa in San Diego, with several two-unit bungalows and buildings, where small groups now account for about 25% of its summer business. The Kiawah Island Golf Resort in Kiawah Island, S.C. has two small-group specialists, who often plan golf, fishing and biking outings. The hotel added a family- reunion specialist in the past year.

A survey by travel consultants Yesawich, Pepperdine, Brown & Russell, which calls the trend “togethering�, reports that eight out of 10 Americans will take at least one trip this year with friends or relatives, up by more than a third since 2001. "People want to reconnect by spending more time with friends and family," says the company's chief marketing officer.

At our own vacation rental development, we have long gotten a substantial amount of our business from family reunions and from groups of friends. With a number of individual cabins, there is the opportunity for groups to bond and engage in group activities while having their own individual space. It is nice to see that the luxury hotels have discovered that this business is large enough to commpete for. However, it means that vacation rentals must provide an acceptable level of luxury and amenities to maintain this business.

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July 26, 2006. An article in the Concord Monitor Online reports that high-end vacation rentals are the hottest thing on Winnipesaukee this year. It quotes realtors as saying "People want the luxury homes.�

Such homes, which rent for $5,000 to $15,000 for a week, feature amenities ranging from sandy beaches to big-screen TVs. They have as many as six or seven bedrooms - some brokers have noticed more people traveling in big, family-reunion-sized groups and many have "preferred exposure," facing west or southwest for a good view of the sunset.

One realtor is quoted as saying, “houses renting for less than $3,000 per week have not done as well this year. But the high-end sector is very strong�, he said, with almost no availability left even as they are renting for the "highest rates ever."

We have heard this experience in New Hampshire repeated in some other areas. We have consistently encouraged members of VacationRental.org to provide luxuries and extra amenities to make their properties stand out for the competition. The luxury properties seem to do the best, even when the area as a whole might see a downturn in occupancy.

Posted by VRO at 10:45 AM | Permalink

July 25, 2006 Hotel industry occupancy reached 66.8 percent in the second quarter of 2006, up 1.2 percent compared with the same quarter last year, according to Smith Travel Research, who announced second quarter and first half 2006 results for the U.S. lodging industry today. Second quarter average room rate gained 7.0 percent to $97.02 and revenue per available room (REVPAR) --- the combination of occupancy and average room rate and a key industry productivity measure --- increased 8.3 percent to $64.79.

In the first half of 2006, industry occupancy improved 2.1 percent to 63.5 percent versus same period prior year. Average room rate was up 6.8 percent to $96.56 and REVPAR gained 9.0 percent to $61.30.

When we consider the increase in room rates and the concern about high gas prices, these are encouraging numbers for the travel industry in general, and for vacation rentals. The increase in room rates for hotels of 7 percent is a substantial one. However, this is an industry average which includes budget motels. It understates the increase in rates in major cities and destination resorts, especially the increase in luxury hotels.

Vacation rentals do not tend to raise rates as fast as hotels, and they should be in a good position to benefit with higher occupancy rates because of the higher rates charged by luxury hotels. However, this is true only if they are able to offer an acceptable level of amenities and luxuries.

Posted by VRO at 11:28 AM | Permalink

July 23, 2006. As vacationers plan to increase their travel in the fall, vacation rental owners should prepare to capture their share of the market. An article in USA TODAY reports that airline bookings are increasing as travelers look for better rates and try to beat the summer crowds

According to a number of sources in the travel industry, a growing number of Americans believe that vacation season no longer ends with Labor Day. Travel agents across the USA are seeing more Americans building travel plans around the advantages of autumn, mainly smaller crowds and better bargains.

USA TODAY quotes a spokesman of AAA travel agency as saying that airline bookings for September-November travel are up 23% this year over last year. “Boomers, singles, even honeymooners are changing their dates (from summer) because of the better fares, better values, better hotels and more choices for their money," says Linda Criswell, a manager for Dillard's Travel.

This trend is particularly important for vacation rental owners who want to maximize revenues. Any vacation rental property that is luxurious, well-maintained and located in a prime vacation destination should be fully booked in the peak season. The thing that often makes the difference between a profit and a loss is rate of occupancy in the shoulder seasons.

For our own vacation property, we used to consider September a slow transition month between summer and the fall leaf season that begins in October. However, we have noticed in recent years that September has become one of our better months. Wise vacation rental owners will make a special effort to market the advantages of their vacation destination in the fall months.

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July 21, 2006. We are always eager to read the annual World’s Best Awards by Travel + Leisure Magazine, an American Express publication, each year. Although the magazine’s evaluation of the 100 best hotels in the world and in several continents does not deal with vacation rentals, there are many lessons to be from gained by vacation rental owners in examining what made these few hotels the best.

When last year’s list came out, we commented that there was one thing common in the winners where we had stayed—their uniqueness. This seems to be the case again this year. Anyone who has visited Vancouver Island knows that it is a unique environment. This small island leads the list of Top 100 Hotels in Continental U.S. and Canada, winning three of the top five rankings. The Aerie, which made its World’s Best debut, only last year, is No. 1; Sooke Harbour House follows just behind in second place; and Wickaninnish Inn is No. 5. It is significant that none of these three properties is larger than 50 rooms. In fact, small, intimate hotels with fewer than 100 rooms occupy all but one of the top 10 spots and make up 48 percent of the entire list of 100.

Ritz-Carlton leads the list of the larger hotel chains, with nine hotels in the top 100. This luxury brand of the Marriott Corporation again displayed why Marriott’s management is so good. As we discussed in the June edition of the Vacation Rentals Newsletter, Marriott’s core values and superior service enables it to be a leader in whatever category it competes in.

We at VacationRentals.org have always stressed the importance of going the extra mile to make your vacation rental unique. The latest Travel + Leisure awards demonstrate that uniqueness pays off in the hotel industry. We believe it pays off in all kinds of lodging, especially vacation rentals

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July 20, 2006. Vacationers who fly to their destinations will face storms and record crowding that could make their trip to and from their destinations a miserable experience. The careful vacation traveler will need to take every possible precaution to avoid the worst times to travel. Those of us who travel regularly on business have noticed that the already crowded airlines are even worse during the summer vacation season. This already difficult traveling situation is compounded by frequent afternoon thunderstorms, especially on heavily traveled routes on the east coast.

An article in yesterday’s Wall Street Journal (subscription only) recites how bad the situation has become. But the most helpful information is several tips on how to mitigate the delays and discomfort. Some of the most helpful are advice to fly Tuesdays or other slower days. However, “airlines say there really are no slow days anymore. Thursdays are getting nearly as busy as Fridays, the peak travel day, and Sunday nights and Monday mornings are crowded with both business and leisure travelers. But Tuesdays and Wednesdays tend to be less popular. Also, the first flight of the day is least likely to be delayed because the aircraft is in place.�

I have found these suggestions to be helpful in my own experience. I also make a conscious effort to take morning flights, which are much less likely to be disrupted by thunderstorms during the summer. The vacation traveler generally has more latitude in scheduling flights that the business traveler, who often is on a tight schedule. The wise vacationer will take advantage of every opportunity to schedule air travel so as to avoid the peak travel days and afternoon and evening flights through thunderstorm –prone areas.

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July 19, 2006. Marriott announced today that all of the Company’s lodging brands in the United States and Canada will become 100 percent smoke-free, beginning in September. This represents the lodging industry’s largest move to a non-smoking environment, with more than 2,300 hotels and corporate apartments and nearly 400,000 guest rooms under the Marriott, JW Marriott, The Ritz-Carlton, Renaissance, Courtyard, Residence Inn, SpringHill Suites, Fairfield Inn, TownePlace Suites and Marriott ExecuStay brands.

Marriott is not the first hotel group to announce a no smoking policy, but as the largest hotel company inn the world, measured by revenue, its non-smoking policy is certainly the most significant. The company said, “The new policy includes all guest rooms, restaurants, lounges, meeting rooms, public space and employee work areas. Currently more than 90 percent of Marriott guest rooms are already non-smoking and smoking is prohibited in many public spaces due to local laws. Demand for non-smoking rooms continues to rise with new information from the Surgeon General on the hazards of secondary smoke.�

You can be sure that Marriott, the most successful of all the hotel companies, (see the June Vacation Rentals Newsletter) did not adopt its sweeping non-smoking policy lightly. They finally decided that the costs of accommodating the minority of guests that smoke do not justify the costs of making their hotel acceptable to non-smokers. The lingering scent of smoke in a room that has been smoked in is very hard to remove, and some guests are especially sensitive to the slightest smell of smoke. Most vacation rentals, like our own, have had to institute a non-smoking policy years ago. However, in our own case it is easy for smoking guests to indulge their habit on our decks and porches without breaking our rules. This convenience is not available in the confined spaces of hotels.

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July 18, 2006. Please be aware that several members have reported an email scam they have received recently. It is just another variation of an old scam that has been worked on vacation rental owners and B&B owners before. The trick is to send a bogus money order and then get a refund of all or part of it before you discover that the money order was bogus. Any time you receive an urgent request for lodging to be accompanied by a money order, your alarm system should go off.

The emails seem to be working in pairs and are usually from yahoo accounts. They are always in an extreme hurry to get a place to rent for the same time period. They assure the money is in route with one claiming to be a missionary and that UNICEF is paying for the lodging. The other says he had to leave in a hurry for active duty on a ship and wants to rent for a full two weeks as a gift to his friends for their honeymoon. The following are examples of their emails to some of our customers:

I will take your place. I will not hesitate to tell you that I am currently stationed on active duty on a U.S Aircraft carrier,we have limited use of telephones for now because of the disruptions it causes on the Radar on the ship so I get an opportunity to use the phone once in 3 or 4 days,we even take turns using the computers here on board.So I think the internet is the best way to communicate with me .I will like you to give me a discounted bill covering the number of days,14 days in all that my people(honeymoon couple) will be staying in your accomodation that way we will know how best to approach the matter and get this all settled in good time.please assist in making the booking and their stay possible.how do I get to pay you ?I have a cashiers check made out for this purpose before I left, will that be good to pay with. its a suprise for them and I will have to rely on your Judgement to get them a nice place as I am not on ground. I want 14 complete days. I was recalled to duty and left in a hurry so I could not finalize their trip arrangements.I think they will meet all your criteria,no pets no smoking if such restrictions exists in your place. regards

William Cohen

Good Day,
I am Rev. Blessing Opoko, A Preist and Doctor and I render missionary services here in Ghana. I will be coming over to Oregon U.S.A. on holiday from the 12th of july on to the 26th of July 2006 for a two weeks Vacation with my wife, Could you please send me a more detailed description of your accomodation and What's the cost of per week?My Sponsors will be paying you in advance of our visit so that we can
be assured of an Accomodations during our stay, because this is our first visit to the State and Unicef is also taking care of all our vacation expenses.An early reply will be appreciated. Please acknowledge if you can offer this accomodation service and give me a call on my direct line +233276858568. anytime as soon as you receive this email, so we can conclude on all other arrangements ASAP, as time is not really on our side.

Most Respectful,
Rev.Blessing opoko
Missions Cordinator,
Unicef Plaza,
10 Nkuruma Avenue,Community 6,
Accra,Ghana.

Posted by VRO at 12:39 PM | Permalink

July 15, 2006. Orlando's condominium-hotel market is rapidly becoming overbuilt, with at least 17,300 competitive condo-hotel rooms in the pipeline, a study by a national group has concluded, according to a report by Bob Mervine in the Orlando Business Journal.

The study, conducted by the national Association of Condo Hotel Owners, suggests the market is ripe for serious financial difficulties for buyers looking for a quick buck. The study calls Orlando "the seasoned host" in the condo-hotel market, with more development projects embracing this form of ownership format than any other U.S. city.

Abe Pizam, dean of the Rosen College of Hotel Management at the University of Central Florida, says the study confirms his hypothesis. "I've said for a while that this is a bubble that will burst, and people are taking a great risk." Pizam believes many condo-hotel buyers have had unrealistic expectations, and it appears they are making a prestige buy for bragging rights instead of making a rational investment decision.

We at VRO have long cautioned about buying condo-hotel units or any other kind of vacation rental property where most of the decisions that determine profitability are not completely in the hands of the individual property owner. When there is a market situation where supply outstrips demand, the owner of individual vacation rentals is better able to make marketing and management changes to cope with changing conditions than are owners of units in condo-hotels. In the case of down markets the condo-hotel management may be more interested in raising their own fees to maintain profits than in making sure that their individual owners are protected.

Posted by VRO at 01:09 AM | Permalink

July 13, 2006. There can no longer be any doubt that high-speed internet access is essential to vacation rentals. Notebook computers are becoming popular summer vacation accessories as travelers pack their bags to get away from it all, according to Intel's latest survey, which was released last week. Stanley Miller II reports in the Journal Sentinel that the recent survey of adult computer users - commissioned by Intel - found that 38% of those responding (or their families) have taken a laptop on vacation, and 53% are likely to take a laptop on a future vacation.

The survey also found:

• 68% of computer users said laptops are a good resource for solving problems while on vacation, while 25% between the ages of 18 and 34 said wireless laptops are their primary travel resource while on vacation.

• 66% said laptops are good for personalizing entertainment while on vacation, including 23% using it for music, 21% for watching movies and 29% for games.

We have been writing for the last two years that high-speed internet access is becoming a necessity for luxury vacation rentals. While it was considered a luxury two years ago, it is now considered a necessity. With a majority of vacationers planning to take their laptops with them, any vacation rental without high-speed internet access is at a distinct market disadvantage.

Posted by VRO at 10:11 PM | Permalink

July 12, 2006. Smith Travel Research’s Weekly Lodging Report for the week ending July 8, 2006 shows a drop in the occupancy rate of 5% compared with the same week year ago. However, a close look at the Weekly Lodging Report does not reflect any thing other than the fact that the Fourth of July fell on Tuesday this year, thus greatly reducing business travel during the week.

According to the AAA, motorist travel reached an all time high this Fourth of July. Also, anyone who traveled by air during the week of the Fourth noticed that the airports were jammed. Our reports are that vacation rentals and other vacation lodging were full for the week. Certainly this was true in our vacation cabin resort. With the Fourth falling in midweek, many families chose to take the entire week off. Others took off the long weekend, Friday through Tuesday. Also very few business scheduled businesses conferences that week

Smith Travel research has separately projected that U.S. hotel occupancy will be 71.5% this year, the highest since 72.5% in 2000. The hotel supply has increased by 7.7% since 2000. Our survey of reports in vacation areas around the country indicates good occupancy rates in most vacation destinations, with the exception of a few where second homes have been overbuilt.

Posted by VRO at 03:26 PM | Permalink

July 11, 2006. The New York Times has teamed up with Google Maps to provide a very valuable vacation guide for travelers to the 50 States in the US, as well as some destinations in Canada and the Caribbean. Its weekly “36 Hours� column offers a weekend-long itinerary for a different North American city each week. It now makes the last 247 of these columns, going back to 2002, available on an interactive Google map.

These columns have always been very enjoyable reading for those who love to travel. They are particularly interesting because they cover quaint little towns off the beaten path as well as major travel destinations. They are very good at giving the reader the true flavor of a town, and pointing out some of the attractions that vacation travelers will not want to miss. However, they have never been easily accessible in one place until now.

This New York Times feature, “36 Hours: City by City� is easy to use. You can click on the icons of the Google map to browse the 36 Hours columns from the past three years. The only thing the columns generally don’t include is where you can find a good vacation rental. However, this can easily be done by using VacationRental.org and other vacation rental directories.

Posted by VRO at 04:43 PM | Permalink

July 10, 2006. A Wall Street Journal article titled, “Latest sign in summer-home markets: Vacancy� indicates that in some summer-rental spots around the country, a number of houses sit vacant and owners may be ready to make a deal.

The article by Christina S.N. Lewis, which is reprinted in AzCentral.com gives several examples where this is the case. She reports that prices have dropped by as much as 25 percent in Cape Cod, Mass. and that in New Jersey's oceanside-resort towns, rental volume has fallen about 15 percent since 2003. It’s a renter's market in the Outer Banks, N.C., a family-oriented destination

In some areas, oversupply seems to be the problem. For example, in Aspen, Colo., Five Star Destinations added 30 properties this summer, for a total of 100. Occupancy is about 80 percent this year compared with full last year. Michael Sarka, executive director of the Vacation Rental Managers Association Nationwide, is quoted as saying that rental inventory is up 12 percent nationwide, this year, mostly due to new second-home construction. The Travel Industry Association of America, of Washington, D.C., expects leisure travel to increase by less than 1 percent this year.

The article also points out that this downturn in rentals of vacation homes is not the case in other areas. Realtors in the Hamptons, New York report that the desirable water front properties have already been booked. Two other areas where rentals are very strong are Berrien County Michigan and Orange County California, where vacation rental owners have raised rental rates 5 percent this year while occupancy rates are up 8 percent.

This has been our own experience in our North Carolina mountain cabin vacation rentals. This spring and summer have been the strongest market we have ever experienced. That has also been reflected in reports we get from some other areas of the country. Also, we believe that conditions vary widely within every market. Those vacation rental owners who build their brand by astute marketing and by supplying superior services, amenities, and value will do well even when their competitors do not. We practice these features in our own vacation rental property, which is almost fully booked except for a few vacancies in the last week of August. Also, we explain these principles regularly in our Vacation Rentals Newsletter, which is available to members only.

Posted by VRO at 12:34 PM | Permalink

July 7, 2006. An informal survey of businesses in the Mount Washington Valley of New Hampshire finds that neither high gasoline prices nor the threat of rainy weather are keeping visitors away, according to an article in the Union Leader.Many, although not all, businesses are reporting increases in visitors and revenues over 2005.

There are many desirable accommodations in New Hampshire, such as the vacation rentals we have in VacationRental.org for the White Mountain Area.

The article quotes many small inns, guest houses, vacation rentals, and hotels as saying that they have experienced a significant increase in business, as much as 35%, over a year ago. This is an encouraging trend for a very attraction vacation area. We like to get these reports. We report regularly on the national findings of Smith Travel Research on weekly and monthly lodging reports, but we also check the local reports of vacation areas such as this in giving our readers an ongoing assessment of trends in the vacation rental business. This article is additional evidence that it has been good year thus for for those of us in the business of renting mountain cabins, beach houses, rental cottages and luxury vacation villas.

Posted by VRO at 01:31 AM | Permalink

July 6, 2006. An article by Glenn Haussman in Hotel Interactive reports that “as the hotel industry continues to accelerate to record profitability, it also appears there will plenty of ‘no vacancy’ signs hanging in front of many hotels this summer.� It quotes PricewaterhouseCoopers, who predicts that last summer’s record of 3.136 million occupied room nights will be crushed. According to a PricewaterhouseCoopers forecast, total occupied rooms this summer will rise by 2.9 percent, accounting for 3.277 million occupied room nights

While this forecast equates to a 71.5 percent occupancy level, it won’t be enough to beat the previous summer occupancy record of 72.1 percent set in 2000. However, there are significantly more rooms in the marketplace now as the number of hotels has jumped by 7.7 percent since 2000.

A report issued last week by Priceline.com indicates this summer’s busiest destinations will be Boston, San Francisco, Los Angeles, Seattle and New York City. The report says that prices are soaring for rooms in certain markets. For example, the report says the average price for a four star hotel room in Boston will be up 34.6 percent to $253 this summer from $188 last summer. Three star level properties in Boston, San Francisco and Seattle will all see double digit price increases of 20.5 percent, 19.3 percent and 12.9 percent respectively

These reports of high occupancy rates and even higher hotel price increases create a great opportunity for all kinds of alternative lodging. Owners of vacation homes in desirable destinations who can assure the traveler of an acceptable level of quality and luxury should benefit, whether the property is a beach house, a mountain cabin, a vacation cottage in a quaint village, or just a vacation condo in a major city. Now is a good time for vacation rental owners to show that they offer better value and more space than hotels

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Seniors, with more money and leisure time than other age groups, are traveling to experience the world, according to an article by Robert N. Jenkins in the St. Petersburg Times. Jenkins reviews the statistics on recent trends:

“* At the start of the 1900s, the average life expectancy in the United States was 47. One century later, life expectancy is about 80.�

“* Already, almost 10 percent of our population is at least 65 years old. Every day, almost 5,600 more Americans reach that birthday. By 2030, roughly one of every five of us will be at least 65.�

“* People 50 and older control more than 70 percent of Americans' net worth.�

“* People at least 50 years old travel more than any other age group, averaging at least three leisure trips a year.�

“And being the most highly educated generation in our nation's history, this group also has the inclination to see how the rest of the world lives.�

As vacation rental owners, we have noted that an increasing number of our visitors are seniors, particularly during mid-week stays. For seniors who no longer have child care responsibilities and who are retired, the opportunity to travel in off- peak times is inviting.

We have found that senior guests are extremely important in keeping our vacation cabins occupied during the week, when rates are lower than weekend rates. They are also a key to keeping occupancy high during the “shoulder months�, such as September, when families with children must return for school.

A well-considered vacation rental marketing plan for seniors will include packages during the off-peak season. Romance packages, spa packages, and packages that include meals at gourmet restaurants tend to be popular with senior vacation rental guests.

Posted by VRO at 11:39 AM | Permalink

Vacation rental owners who need flood insurance can expect to pay more under a bill passed this week in the US House of Representatives. As reported in the Washington Post, this legislation would phase out subsidies on some vacation homes and raise premiums at a faster rate. The bill would also increase the amount of coverage a property owner can buy and boosts fines for mortgage lenders who don't tell customers they have to buy flood insurance.

The article by Jill Abrams describes the history of the National Flood insurance Program, a part of the Federal Emergency Management Agency, which was established by Congress in 1968 to help homeowners, particularly those living in flood plains, obtain flood insurance that private insurers were unwilling to offer. Under the program, private insurers sell the government-subsidized policies.

The Flood Insurance Program was self-supporting for its first 37 years, but last year it was hit by claims from some 225,000 property owners for $22 billion arising from hurricanes Katrina, Rita and others.

Currently, a homeowner living outside a flood plain with the maximum coverage and a $500 deductible pays a premium of about $1,100 annually. The premium for the same coverage inside a flood plain is about $2,000. The bill adds to basic policies a nominal amount for living expenses following a flood.

For more information about the flood insurance program, check this FEMA website. More information about the House passed bill, H.R. 4973, is available on the Congressional website.

For vacation home owners who live in areas that are flood-prone, this legislation is more bad news about their insurance rates. Home insurance has become increasingly more difficult to get and more expensive for second-home owners who live with 50 miles or even 100 miles of a coast. This legislation to phase out the subsidy for flood insurance for second homes will exacerbate this problem for beach houses and many other vacations rentals.

© 2006 The

Posted by VRO at 11:18 AM | Permalink