2024 Q2 REPORT Performance Overview
Greetings , Realtor Partner ,
Over the past eight consecutive quarters , the vacation rental market in Northwest Florida has seen a slow but steady decline in the three leading KPIs of Occupancy , Average Daily Rate ( ADR ), and RevPAR . The decline has been attributed to a number of circumstances and events — from the world opening up to travel in the aftermath of COVID to inflation and rising interest rates .
However , the most notable driver of the decline in our local market has been the dramatic increase in the supply of vacation rentals . This surge has resulted in downward pressure on Occupancy and therefore on rates . It ’ s the law of supply and demand : Supply goes up , demand goes down .
After two years , however , some of you may be asking , When will it end ? When will Occupancy improve ? When will rates begin to tick up again ? It ’ s impossible to predict exactly when this will happen . That said , I believe we are finally seeing some signs of improvement . How can I say this ? What evidence do I have to back it up ?
At long last , we are seeing a deceleration of vacation rentals entering our local marketplace . And this isn ’ t just a guess on my part . For the first time in five years , our market data-sharing software is showing more property management participants in our market offering fewer properties . And this is profound . Since 2019 , we have seen a steady year-over-year increase in both property managers and the supply of vacation rentals — until now . After eight consecutive quarters , we could be reaching an equilibrium between supply and demand . We could eventually see demand start to outstrip supply , which would translate into an increase in Occupancy and rates .
What other evidence is indicative of an end to the slide ? Compared to same time last year , we are pacing ahead by 2 % in Occupancy . That said , we are pacing behind compared to the same time last year in ADR and RevPAR . When we compare the reservations we currently have on the books for the second half of 2024 to the reservations we had on the books at this time last year for the second half of 2023 , the picture is encouraging , as we are up 4 % in occupancy . Again , we are currently down in ADR and RevPAR for the same timeframe , but the uptick in Occupancy suggests a rebound may be on the way . Rates , we can reasonably hope , will soon follow .
Does all this data indicate that we are leaving a period of year-over-year declines and entering a period of year-over-year increases ? Again , I can ’ t say with any certainty . However , the data suggests that the decline is nearing its end , and we may soon transition into better days ahead .
As you know , we choose to operate from a position grounded in data . Moreover , we will always share what we are seeing in the marketplace at any given time with you , our Realtor partners . As always , thank you . Should you have any questions , feel free to reach out .
Kindest regards ,
Alex Curry Director of Business Development
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