US economy

Cooped-up Americans race to book vacations in reopened states

Demand has soared this month for vacation rentals in pockets of the US, offering hope for booking companies such as Airbnb as well as state governments desperate for tourism tax revenues. 

In Florida, the home of Disney World and Miami Beach, vacation homes are opening up in some counties after the state’s governor relaxed lockdowns ahead of the Memorial Day weekend.

New rental bookings had already begun to recovery in early May and are now 90 per cent higher than they were 12 months ago, according to the state’s tourism website. In April, bookings were down more than 80 per cent year on year in the state, creating pent up demand that has exploded with the prospect of restrictions on travel

Other states, including Georgia and Alabama, have seen similar spikes in new bookings, according to Key Data Dashboard, a software provider of rental figures.

Though almost 40m Americans have begun to claim unemployment insurance in the past two months and the US jobless rate is expected to rise close to 20 per cent this month, the vacation rental demand indicates that people with financial security are eager to spend.

Booking activity for vacation rentals in Europe and North America  slows as coronavirus continues to spread

The Florida figures reveal bookings made but not when the stays would begin, suggesting a favourable leading economic indicator for the state.

There had been a particular surge in rentals commencing in the next 30 days, said Jason Sprenkle, chief executive of Key Data Dashboard, which collects data for Florida — an unusually tight timeframe because people usually book vacations further in advance.

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“Over the last week, the demand for vacation rentals across the US has seen a huge increase, now surpassing the demand for this same period last year,” he said.

Amid heightened uncertainty, cancellation policies, which typically require a portion of the stay to be paid upfront, have been loosened to the benefit of renters, Mr Sprenkle added.

GM230521_20X Florida new vacation rentals UPDATED

Taxes collected from vacation rentals can be a notable revenue source for states. In 2019, Airbnb collected $137m in taxes for Florida, up from $86m in 2018. San Francisco-based Airbnb said earlier this month that its revenues for the year could be less than half its 2019 tally as a result of the economic hit from coronavirus.

In 2018, Florida received $16.6bn in direct spending from vacation home rentals, about 1.6 per cent of state gross domestic product, according to a study published in December by the University of Central Florida. More than 14 million tourists stayed in vacation rental homes in 2018, about 11 per cent of total tourists, the report said.

Signs of an improving outlook for private home and condo rentals will be a hopeful sign for a state tourism industry still deep in the doldrums. Hotel revenues per available room, which bottomed in April, were still down 74 for the week ending May 16 compared to the same period last year, according to Bank of America. 

Florida hotel revenue Year-on-year change ($m)

Not all big states’ rental bookings have recovered, said Key Data, which collects bookings figures directly from rental property managers and also monitors websites such as HomeAway and Airbnb to gauge rental supply.

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Hawaii has not recovered from the April lows, as air travel to the islands remains subdued. New rental bookings per day in California have rebounded but are still below totals for May 2019, as that state remains significantly shut down.

“The guests are angry” about the lockdowns said Vince Perez, a property manager and rentals software provider in California. People are looking at stays months away, he said.

One change is that people are looking to vacation longer or decamp to work remotely after being cooped up through the pandemic, Mr Perez said. “The number one call we get right now is, ‘hey, I will take the house for 30 days’.”

For places that have eased lockdowns and that vacationers can travel to easily, “those drive-to markets are definitely already seeing a boom” in demand, said Blake MacKenzie, a board member with the Northwest Vacation Rental Professionals Association.

“If you are in a destination leisure market and you are outside the cities, you are going to see — and you are seeing — an uptick in bookings,” he said.


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