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As Melbourne’s holiday home market transitions into the last half of the year, it's the perfect time to reflect on how the market fared during the bustling summer and accompanying shoulder season (December to May).
This wrap-up will provide valuable insights and vacation rental market data for Airbnb hosts, property managers, and any Aussie interested in the dynamics of the holiday home market. Let's take a closer look at the trends, guest behaviours, and market performance over this period.
Melbourne Market Data & Trends
The summer and subsequent shoulder season in Melbourne presented an interesting mix of trends. While lower average daily rates (ADRs) helped boost occupancy rates, they were not enough to drive a year-over-year increase in Revenue Per Available Night (RevPAN). However, it's worth noting that the RevPAN was not too far behind compared to the previous year.
Occupancy Rates
Occupancy rates saw a slight uptick this year. While this increase appears marginal, it indicates a steady demand for holiday homes in Melbourne, even with fluctuating market conditions.
- Dec. 2022-May 2023: 65.4%
- Dec. 2023-May 2024: 65.8%
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Average Daily Rates (ADR)
Despite the rise in occupancy, ADRs saw a notable decrease. This reduction in ADR suggests that property managers and hosts adjusted their pricing strategies to remain competitive and attract more bookings – which, as seen above, helped in growing occupancy rates year-over-year.
- Dec. 2022-May 2023: $269
- Dec. 2023-May 2024: $233
Revenue Per Available Night (RevPAN)
However, even with an increase in occupancy, the declining ADRs impacted RevPAN for property managers and hosts.
- Dec. 2022-May 2023: $174
- Dec. 2023-May 2024: $160
The Eras Tour Effect
When Taylor Swift's Eras Tour made its highly anticipated stop in Melbourne, it caused a ~swift~ surge in the city's holiday rental market. Fans, enchanted by the promise of seeing their favourite songs live, flocked to the city, pushing the average occupancy rate to an impressive 86%.
This surge in demand also drove the average daily rate (ADR) up to $406 as hosts knew all too well that fans were willing to pay a premium. This frenzy translated into a remarkable revenue per available night (RevPAN) of $348. It seemed that Melbourne's holiday home market was feeling "Fearless" in the face of such overwhelming popularity.
Guest Insights
Understanding guest behaviour is crucial for optimising rental performance, so we analysed year-over-year metrics to gain a clearer picture of current trends. Here's a snapshot of key guest metrics:
Average Length of Stay
The average length of stay has slightly increased:
- Previous Year: 4.8 nights
- Two Years Ago: 4.4 nights
This trend suggests that guests are choosing to stay longer, which could be a result of changing travel patterns and preferences.
Median Booking Lead Time
The median booking lead time has seen a minor decrease:
- Previous Year: 20.7 days
- Two Years Ago: 21.2 days
While this change is subtle, it reflects a slight shift towards more last-minute bookings, possibly influenced by changing guest behaviours, like last-minute holidays.
Preferred Booking Channel
Airbnb continues to dominate as the most popular booking channel for Melbourne's holiday homes. This platform's user-friendly interface, extensive reach, and trusted reputation make it a go-to choice for both Airbnb hosts and guests.
Leveraging Technology for Better Performance
To maintain a competitive edge, savvy hosts are turning to technology. Utilising tools like Airbnb pricing tool, holiday home software, and comprehensive vacation rental market data can provide actionable insights and automate many aspects of property management.
Tips for Airbnb Hosts, Property Managers, and Revenue Managers
As we gear up for the last half of the year, many Aussie hosts and property managers are taking this opportunity to fine-tune their rentals and strategies. Don't forget to include your revenue management strategy in this tune-up!
Here are some key tips to help you optimise your performance during the low season:
- Flexible Pricing: Leverage dynamic pricing tools to adjust your rates based on real-time demand and competition. This will help you stay competitive and attract more bookings even when demand is lower.
- Know Your Market: Understanding your market is essential. Research local trends, customer preferences, and upcoming events that might affect demand.
- Get to Know Your Competitors: Keep an eye on what your competitors are doing. Monitor their pricing, promotions, and reviews to ensure your offerings remain attractive and competitive.
- Adopt forward-looking strategies: Historical data is no longer sufficient for effective revenue management. As demonstrated this summer, staying ahead of trends and pivoting your strategies proactively is crucial to avoid missed bookings and lost profits.
Melbourne's holiday home market has shown resilience and adaptability during the summer and shoulder season. While lower ADRs have impacted RevPAN, the steady occupancy rates and increasing average length of stay indicate a robust demand for holiday homes.
For Airbnb hosts and holiday home managers, these insights can help refine pricing strategies, improve guest experiences, and ultimately drive success in the competitive STR landscape.
Incorporating these insights and leveraging the latest in holiday home software ensures that your property remains a top choice for travellers. Ready to optimise your vacation rental performance? Explore our Airbnb pricing tool and complete revenue management system to stay ahead of the curve. Reach out today!
*All monetary values shown are in AUD
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