Vacation rental investments paid off so well this summer more than one in three vacation rental owners plan to raise the rent for the holiday travel season.
Travelers? Book early. Vacation rentals remain a better bargain than hotels and motels.
The “HomeAway.com Vacation Rental Marketplace Report” recently reported 84 percent of owners say their rental business during the summer was about what they expected or better.
More than two thirds of owners (68 percent) with vacation rental properties in areas where summer is the peak season, reported occupancy rates were at 76 percent or higher this summer.
By comparison, Smith Travel Research, Inc. a hotel industry research firm, reported the average occupancy rate for U.S. hotels from June to August was approximately 68 percent.
Among owners with vacation rentals in destinations where summer is not the peak season, more than half of owners (55 percent) with properties considered in “shoulder season” and 18 percent with off-season rentals reported occupancy rates of 50 percent or higher.
Also, 22 percent of vacation rental owners say “it’s going to be a jolly holiday” for rental business during the upcoming holiday travel season.
Nearly a quarter of vacation rental owners’ (24 percent) bookings for the last four months of 2011 are higher than the same time last year, up from 16 percent in 2010. Approximately 44 percent of owners say bookings for the end of this year are about the same as last year.
Forty-one percent of those owners who report higher bookings this year are raising their rental rates; 52 percent are keeping them the same as last year.
What’s driving the higher occupancy rates?
Many travelers who have been on vacation from traveling during the economic downturn are feeling more confident.
“For the last two to three or four years, the economy took a dive and it made companies tighten their belts and trim the fat. Now they are operating in a more efficient manner,” said Christine Karpinski, real estate investor and author of “How To
Rent Vacation Properties By Owner” (Kinney Pollack Press, $26).
“While that left a fair amount of workers unemployed those who are employed are feeling more secure in their jobs and feel now it’s okay to take a vacation,” Karpinski added.
Vacation rentals also offer a home-like environment that can be more accommodating and affordable than hotels, when considering the perks of cooking, playing and entertaining in.
HomeAway reported an average weekly rental rate of $1,685 or $241 per night, to book an entire home, typically with more than one bedroom, a full kitchen and other square footage. Smith Travel said the average hotel room rate was $101.99 per room.
Vacation rental owners also tend to keep their homes updated.
More than half (56 percent) spent more money on improvements — everything from interior and exterior painting to new furniture and appliances — to their vacation home in the past 12 months than they did on improvements to their primary residence, HomeAway found.
That’s often because vacation rental owners are also “guests” and want to maintain that homey feel for themselves.
HomeAway found most owners originally purchased their vacation home for personal use (35 percent) or as a long-term investment (22 percent). However, after the purchase, 66 percent of owners chose to rent to travelers to cover some or all of their expenses.