Things are definitely heating up this month, and we’re not just talking about the weather. July has brought good news for Florida and U.K. readers, positive market trends in the U.S., an innovative new AI tool, and a new cancellation policy from Vrbo—not to mention more peak-season bookings for many of our hosts.
Let’s dive in so we can have you back to watching the Olympics—we mean work—in no time.
The Paris Olympics: not a win for hosts after all?
First, a quick look at the event on everyone’s minds right now: the Summer Olympics. The vacation rental industry had high expectations for the Paris Olympics, but it seems that, thus far, they haven’t lived up to the hype.
According to AirDNA data reported by Le Parisien, only 12% of the 87,000 online listings are fully booked for the Olympics, leaving many hosts disappointed. Despite a 129% increase in supply and a 128% rise in bookings compared to the previous year, the occupancy rate has dropped to just 54%.
Owners have had to lower their nightly rates to cope with the intense competition, and many properties remain unbooked, especially in the central districts of Paris. The notable absence of foreign travelers exacerbates the situation, with a limited increase in international air arrivals compared to the previous Rio Games in 2016.
This situation surprises many Parisian hosts who expected to rent out their apartments easily and at premium prices during the Olympics, and is a good reminder of the importance of an effective dynamic pricing tool.
Vrbo’s new Extenuating Circumstances Policy
We recently saw Airbnb update its cancellation policy with a new Major Disruptive Events Policy, and now Vrbo is following suit.
Vrbo’s new Extenuating Circumstances Policy, when activated, will require that you refund guests regardless of your own cancellation policies. This marks a significant change for Vrbo, which didn’t even require refunds during the pandemic.
So, what qualifies as an “extenuating circumstance”?
- Natural disasters and abnormal weather events (excluding foreseeable weather disasters)
- Declared health emergencies (excluding COVID-19, as it’s now considered a known event)
- Wars, terrorist attacks, and other hostilities
- Government travel restrictions
- Infrastructure travel restrictions
- Government changes to passport or visa requirements
In any of these circumstances, Vrbo reserves the right to activate its new Extenuating Circumstances Policy and require refunds, in which case hosts will bear the full financial impact of cancellations. At all other times, hosts’ regular cancellation policies will remain in effect.
Your monthly rules and regulations roundup
New vacation rental legislation? Not in Florida
Florida Senate Bill 280, which proposed to turn local governments’ authority in regulating vacation rentals over to the state, has been in the news since the beginning of the year. It seemed that the matter was settled when both the Florida Senate and House passed the bill in early spring, but now there’s more news: Florida Governor Ron DeSantis has issued a veto.
The Florida vacation rental industry is thrilled at this news, as the bill would have implemented new regulations such as occupancy limits and registration fees.
In his veto letter, DeSantis explained that the bill would have prevented “virtually all local regulation of vacation rentals even though the vacation rental markets are far from uniform across the various regions of the state.” He went on to say, “Going forward, I encourage the Florida Legislature and all key stakeholders to work together, with the understanding that vacation rentals should not be approached as a one-size-fits-all issue.”
For Florida vacation rental owners who have been kept on their toes all year, this news means no changes are coming your way—for now.
The U.K.’s solution: more housing, not legislation
At the beginning of July, the Labour Party secured a majority in the U.K. General Election. Since then, we’ve already seen the first new proposal affecting the vacation rental industry. And, in keeping with Florida’s update, it doesn’t involve new legislation.
Instead, new Chancellor Rachel Reeves has announced new measures to accelerate house-building in the U.K.
For those in the country’s vacation rental industry, this move is a sign that the new government is prepared to address the real factors affecting the housing market.
In a statement to Short Term Rentalz, CEO of the U.K. Short Term Accommodation Association (STAA) Andy Fenner said: “It’s reassuring that Labour recognises the only way out of the housing crisis is to accelerate housebuilding, not lay the blame at the door of the holiday let sector…The holiday let sector is frequently scapegoated as a cause of Britain’s housing crisis. In reality, holiday lets play a critical role in supporting the UK’s tourism industry, bringing money into local businesses, creating tens of thousands of much needed jobs and supporting local communities often in areas with no other industry.”
A new study recently found that empty homes outnumber vacation rentals in the majority of U.K. destinations, reinforcing the idea that vacation rentals are unfairly blamed for the country’s housing shortages.
What will Chancellor Reeves’ new measures entail? Only time will tell. But for now, we can safely assume that vacation rental legislation will not be high on the new government’s agenda.
The world’s first AI sales agent?
The list of vacation rental management business needs that artificial intelligence (AI) can help you with is constantly growing. The latest addition: sales.
Boom, an AI platform for the short-term rental industry, recently launched what it’s calling “the world’s first AI sales agent.” This new tool is capable of everything from responding to enquiries to upselling and negotiating with potential guests—all in the customer’s own language.
What’s more, the AI sales agent can familiarize itself with property managers’ portfolios, policies, past conversations, and goals, and then use that understanding to optimize each interaction and maximize conversions.
The result: Property managers can focus on bigger-picture tasks like developing strategy, knowing that the AI sales agent is working on maximizing occupancy and revenue.
Houston hosts called to support Hurricane Beryl relief
Last summer, we saw the role vacation rentals can play in relief efforts after Hawaii’s devastating wildfires, when the local government called upon hosts to offer free or discounted temporary housing to displaced residents. Now, hosts are once again being asked to step up—this time to provide temporary housing for emergency workers operating in Houston after Hurricane Beryl.
This call comes from Workbnb, a lodging platform specializing in workforce rentals for skilled tradespeople. Cofounder and CEO of Workbnb Yeves Perez declared a state of emergency for Houston’s short-term rental industry after Hurricane Beryl hit the Gulf Coast of the United States, the Yucatán Peninsula, and the Caribbean in late June and early July.
The earliest-forming Category 5 hurricane on record, Hurricane Beryl caused serious damage to critical infrastructure such as power lines and substations, knocking out power to millions of homes across Houston. Now, linemen and other utility engineers are flooding to Houston to speed up the emergency repair work, even as their own accommodations remain up in the air.
“We are witnessing a catastrophe where linemen from 17 states are sleeping in trucks, tents or camps at staging sites,” Perez explained.
If you operate a short-term rental in the Houston area and would like to offer accommodations, get into contact with Workbnb, which is working directly with local utility firms to match rentals and workers.
Good news for the U.S. short-term rental market
We’ll end with some good news: AirDNA has released its U.S. 2024 and 2025 Mid-Year Outlook Report with positive tidings for demand, RevPAR, occupancy, and ADR.
While monthly performance has varied in 2024 thus far, supply and demand are finally edging closer to where we want them, with supply slowing down and demand on the rise. Occupancy rates are stabilizing and ADR and RevPAR are growing as a result.
Here are some more specific takeaways:
- Demand: Year-to-date demand is 6.8% higher than 2023 levels. Demand is expected to grow by 5.9% by the end of 2024 and 6.8% in 2025.
- Supply: Supply growth is expected to slightly outpace demand growth in 2024, a trend that will then reverse in 2025 thanks to high mortgage rates.
- Occupancy: The steady decline we’ve seen in occupancy rates since 2021 is finally at an end. We should see stable occupancy rates for the rest of the year, followed by slight growth in 2025.
- Average daily rates (ADR): After declines in 2023, ADR is expected to rise by about 2% in both 2024 and 2025.
- Revenue per available room (RevPAR): RevPAR growth should be at 0.6% by the end of the year, and then rise to as much as 2.9% next year.
Want to learn more? Check out the full report here.
See you next time!
There’s nothing like ending on a high note! Here’s to more good news in the month ahead. Whatever comes the industry’s way, we’ll be back soon to report on it.
