As 2022 comes to an end, you might be asking yourself, How do I prepare my rentals for 2023? With the latest short-term rental trends data and analysis, we can take a look forward at what to expect in the new year and how best to prepare.

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In the ever-shifting climate we’re living in, where globally-impacting financial, health, and political events make historical data harder and harder to rely upon, we know that macroeconomic analysis and forecasting is critical to driving the best revenue outcomes for our customers. Historical data will always be an element of what we utilize, but it’s table stakes when it comes to creating a competitive revenue management strategy for our customers. 

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At Beyond, we are able to utilise our extensive market data to make some predictions for 2023, and we can already see a few clear trends forming. Let’s take a look at the biggest holiday let trends to monitor going into 2023, and how to prepare.

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Higher ADRs + Higher Occupancy + Higher RevPAN = Higher Profits

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We are already beginning to see an influx of reservations come in for the entirety of next year, and have done analysis on average daily rates (ADRs), occupancy, and overall revenue per available night (RevPAN) for Europe. Of course, projections may change due to unforeseen events (as we’ve learned from 2020), however, our data shows a very positive overall outlook for next year.

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While the ADRs in EMEA are higher than in prior years, they are already skyrocketing for the summer of 2023. This is balanced with the fact that the occupancy rate throughout the year at the moment is similar to what we had in 2022, which is lower than pre-COVID levels. 

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We had a look at the busiest winter season markets to see how 2023 will kick off for many EMEA regions. The RevPAN in these markets for the first quarter is already doubled compared to last year, due to higher ADRs and higher occupancy rates. For example, ADRs in French ski markets increased by 37% and occupancy by 24% compared to the same time in 2022. 

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We also took a look at warmer winter markets, locales such as the Canary Islands where travellers will flock in order to escape the cold winter months. The occupancy on the Spanish archipelago is more than 70% higher than the same time in 2022 and ADRs increased by almost 6%.

These indicators are key to competitively price your listings. Travel trends are changing, and will continue to evolve as we continue to experience market uncertainty and regional upheavals, so real-time data is of utmost importance to increase your STR business’ performance. 

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Longer Booking Lead Times

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In addition to this positive increase in demand, we are also seeing higher booking lead times for 2023. As people gain the confidence to plan ahead once again, be sure to monitor your vacation rental pricing well in advance to ensure you are not undercutting any part of the year, including any major events that have been scheduled in your region.

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Longer Lengths of Stays

In addition to higher occupancy rates and ADRs, we can correlate the higher booking lead times with longer stays from travellers. This is a trend that we already experienced in the pre-COVID era - people that booked further in advance want to stay longer in one destination. As a result, we recommend reviewing your length of stay strategy to make the most out of the reservations you will get, to ensure you respond to market demand at the right time, with the right restrictions. 

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Tips to Plan for Next Year

• The biggest takeaway from our data is to monitor and stay very responsive to your performance going into Q1 as booking volume continues to grow. Keeping a close eye on your ideal occupancy rates, ADRs, and other indicators is critical to competitively pricing your listings. Travel trends are changing and real-time data is of utmost importance to increase your performance. 
• As ADRs and occupancy levels remain high in 2023, you’ll want to be sure to set your pricing to where it is meeting or exceeding the prior year’s average monthly ADRs. Pay special attention to the pacing of your market’s high season, and be sure to not leave money on the table.
• While it may be beneficial to have calendars open far out in advance to provide potential guests with plenty of options while booking, be cautious and make sure that your prices are not set too low for those future dates. You should have a premium in place for far-out (9+ months) dates to ensure that guests are paying a premium to secure a booking that far in advance.

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What are you keeping in mind for 2023? With Insights from Beyond, you can keep an eye on how trends are shaping up for your market and gain a deeper understanding of your market – plus it’s free to all owners and property managers. Get started today!

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