How Much Should Orlando VR Hosts Charge During The Holidays?
Calling Orlando a popular vacation rental destination would be a gross understatement. In recent years, the central Florida powerhouse has attracted over 75 million annual visitors — more than the total population of France, England, Colombia, or Thailand.
While everyday residents in Orlando may not love these tourism statistics, vacation rental hosts and property managers are licking their chops. Knowing that a particular market is productive is one thing, but knowing when it’s productive is much more important.
For hosts looking to take advantage of peak seasonality, AllTheRooms Analytics has conducted a deep-dive into the holiday season in Orlando in 2018. While many people visit Orlando year-round, late December sees a substantial boost in all key performance indicators. Here’s what vacation rental hosts can expect to earn across the holiday season in Orlando.
The first metric many hosts use to gauge the profitability of a market is ADR (average daily rate). The average daily rate is simply the average amount of money hosts earn per night booked.
For reference, hosts in Orlando earn on average anywhere from $90 to $100 per night. This is an average across all neighborhoods and all home sizes. Understandably, larger homes and those closer to Disney World are in a position to charge significantly more for their listings.
During the week prior to Christmas of 2018, hosts in Orlando saw significant upticks in average daily rates. On December 18th, ADRs hovered around $99.8, and on Christmas day they surged to $155.6 — a 55.9% increase.
ADRs reached their maximum on December 29th at $162.4, and on New Year’s Eve they were up at $159.3.
Hosts and property managers in Orlando should use the 55.9% uptick as a general holiday season rule of thumb. If a listing is normally priced at $200, consider bringing it up to $300 during the holiday season. If a bedroom in a shared home is normally priced at $45 per night, aim to get bookings near the $70 mark.
Occupancy rates are another important metric to consider when analyzing a short-term rental market. Like most markets, Orlando listings fluctuate dramatically between mid-week lulls and weekend highs. During the week throughout the year, occupancy rates can dip as low as 30%. On the weekends, that number comes up to the high-60’s.
During the holiday season of 2018’s late December and 2019’s early January, Orlando listings witnessed a huge bump in occupancy rates. As seen by the graph below, occupancy rates — like ADRs — really didn’t start to pick up until the week prior to Christmas day. Not until December 18th did the numbers begin to surge.
During the impact period, occupancy rates jumped up to an impressive 83% on Christmas day and topped out at 87% on December 29th. Think about that — 87% of all vacation rentals in Orlando were booked on the night of December 29th. Savvy hosts who play their cards right are therefore able to make significant revenues during this period.
For newer hosts and property managers, RevPAR — revenue per available room — is the most important metric in the vacation rental industry. Rather than focusing on ADRs or occupancy rates individually, RevPAR is a factor of those two values. Calculated by dividing total revenue by the number of days a listing was available, RevPAR is a more accurate metric hosts can use to gauge a listing’s profitability.
During the 2-week period from December 18th to December 31st of 2018, hosts in Orlando averaged a 73.35% occupancy rate. During that same time period they averaged an ADR of $143.15. This equates to an average RevPAR of $105 — not bad for a market that usually averages around 50% less.
The graphs above offer some clear insight as to how the holiday season in 2018 stacked up against that in 2017.
Over the 2-week impact period from December 18th to December 31st, ADRs were significantly higher in 2018. There is a bit of fluctuation and back-and-forth in the ensuing weeks of January, but for the most part 2018 was a stronger year than 2017.
This wasn’t particularly the case for occupancy rates. 2018 underperformed in the occupancy rate category for practically the entire holiday season and well into the month of January.
Missed Opportunities: Difference Between Listed Prices and Booked Prices
A final interesting metric to consider is the difference between the listed price and the booked price — in effect, the metric measuring host ambition. As seen by the graphs above, there are significant discrepancies between what hosts asked for and the rate at which they actually booked their properties.
The most notable takeaway is the discrepancy in the weeks leading up to Christmas and New Year’s Eve. In the early parts of December 2018, hosts were listing their properties for roughly $25 more than they were actually booked. In other words — over 27.7% more expensive.
Taking this data into account, hosts would be smart to not begin significantly raising their rates until at least 1 week prior to Christmas.
For more information on how you can use vacation rental data to help manage listings, feel free to contact us.