The Omicron variant seems to have disrupted the recovery of the holiday rental industry. When the news of the variant first emerged, we initially saw a jump in cancellations. However, is that trend continuing? Are travellers still booking holiday lets for summer break, or has Omicron scared them off? Luckily at Beyond, we can look at our wealth of data to get a clear picture of the industry right now. Here’s what we know.
2022 Starts Strong
Right now, we can see that occupancy in the UK has been at record highs since May 2021. And the good news is that we see that trend continuing into 2022. January occupancy is higher than the three previous years so far.
SuperControl, an all-in-one property management system and channel manager for short-term rental managers, also took a look at their own data and sees mostly the same picture. “Of course Omicron is having an impact, but our data shows that demand is still strong,” said Robert Kennedy, Product Director at SuperControl.
Good News for Those Who are Using Beyond
People are booking more holiday lets in the UK than ever before. The demand is there, and people are not flocking to the beaches of Spain and Portugal or heading further afield in droves to take a holiday as some of us feared.
What we see below is that so far, those property managers and hosts who are using Beyond are outpacing last year in forward-looking occupancy until the end of May. In other words, their listings that are priced with Beyond have a higher occupancy rate than those who are not using Beyond.
Summer is Booking Well, But Underpriced Listings are Being Snapped Up First
For those who feel reassured by the global trends we are seeing, but are anxious because your phone hasn’t been ringing off the hook - we hear you.
The key to dynamic pricing is getting booked at the right price at the right time. So while it may feel good to spend January taking bookings that fill the calendar for the upcoming summer, this is not the right strategy to maximise your revenue. Underpriced inventory is being booked up first.
Taking a look at 2019 data from Beyond in the above chart, we see that average occupancy across the UK reached around 80% in August 2019. The red line shows that as of January 2019, occupancy in August was less than 25%. We expect trends to follow previous years, and right now we are outperforming previous years when it comes to booking volume. Looking at our data for 2022 so far, we see that the market is currently 26% booked for August 2022. This means that we can expect the market occupancy to end at 80%, if not higher.
So yes, people are getting bookings now, but we know that there are still a lot of bookings to come (the vast majority of them in fact). Another way to look at it: 80% of holiday lets across the UK will be booked for August 2022. Currently, only 2-3 of them are booked. There is still a lot of time between now and August for those 5-6 additional bookings to come in. Using dynamic pricing ensures you are perfectly positioned to capture those.
So if you use Beyond and are worried about the high prices you see for summer and a slower booking pace than you expected - these actually are positive trends and exactly what we would hope to see.
Again, data from SuperControl tells the same story. “Pacing right now is normal and this is actually a good thing. Our data shows that spring and summer occupancy is well ahead of what you might expect at this time of year. Demand is strong!” Robert said.
This Trend is True Across All Market Types and Regions of the UK
Our data shows that bookings per listing have jumped since the beginning of the year in all market types, even urban locations. In fact, urban locations are currently the leaders when it comes to booking volume. Regardless of where you are located in the UK or your property type, we can confirm that there is a real demand for holiday stays in 2022 and in general, underpriced properties are being snapped up first.
Cancellations are Still here, But They are Not Growing
Cancellations over the past few months increased slightly when compared to last year as a whole, which makes sense with the introduction of the Omicron variant into the mix. But we didn’t see the dramatic spike you might expect across the board. Rather, as we can see in the graph below, properties in urban markets have been most severely impacted.
The good news is that none of these numbers come anywhere close to what we saw in 2020. So far in 2022, cancellations are not increasing. However, we believe that cancellations will still happen at a slightly elevated rate, so having a cancellation policy that works for your business and is appealing to your guests will remain incredibly important.
So what next? Keep calm and carry on.
We recommend turning your attention to the next few months as a next step. We also recommend ensuring that you are following revenue management best practices across the board, not just when it comes to pricing. Check your minimum prices for the rest of low season, refresh your cancellation policy if needed, adjust your minimum stay requirements to be as flexible as possible, and so on.
As we’ve seen at previous points in this pandemic, it can be hard to keep up and know how your business needs to respond. At Beyond, we aim to be your best partner in revenue management strategy, helping you make the best decisions for your holiday rentals. Our team and our algorithm are all working together to simplify the overwhelming amount of data that can help you take the right action. Read more about how our algorithm works for you.
Are you a Beyond user with specific questions about how to respond? Reach out to us at support@beyondpricing.com, we’re here to help.
Not using Beyond or new to dynamic pricing? Get all your questions answered and even see what Beyond can do for your business by contacting us.
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