Contact: Joan Talmadge
Phone: 888-281-8660
E-mail: info@weneedavacation.com
Website: www.weneedavacation.com
Though the
Our website, www.weneedavacation.com, advertises
over 650 vacation rental homes on
Every year, we have seen a huge surge in
activity right after the December holidays.
But never have we been so concerned: what effect would a soft economy
have on the economics of
Using state-of-the-art relational database
technology, we have at our fingertips a host of information. Our annual
client growth rate of over 60% demands that we measure how effective we are in
bringing them vacationer traffic. Thus, we want to know our traffic and
also the results it brings our clients. We can easily analyze our
clients’ growth and pricing changes by geographic area, home size, and home
amenities. We can measure bookings patterns from year to
year by geographic area and price range, in order to determine how
well we are doing thus far vs. the same time last
year.
Our main measure is what we call "property
views," or the number of times a property web page is seen. We have
had over 3 million property views since we began in December 1997 and had 1.3
million in 2001 alone. We expect over one half million property views in
Q1 of 2002, or over 700 per active property.
But we also need to measure our clients' moods
and results. Renewal rate is key:
we offer several length plans, and track renewals carefully. Of those who have
been with us for a year or more, over 90% renew. This tells us we are
delivering a good service.
Pricing of homes year-to-year best indicates
the "consumer confidence" piece. If clients raise prices, they
are optimistic and visa versa. We focus on the 9 key summer weeks because
they represent 90% of our traffic and are the bread and butter of any rental
homeowner’s economics. From 2000 to 2001, prices for homes on our site
during both summers increased a robust 8.0%, or 3 times the consumer price
index. Clearly, homeowners felt they were in a seller's market.
So, what is the impact of September 11
and of a sharp economic slowdown? In terms of pricing, average
prices are still increasing, but only 4.7% from summer
2001 to summer 2002. Interestingly, the two areas that grew the most from 2000
to 2001,
So, from the homeowner’s point
of view, they are a bit more cautious after a raucous couple of years in 1999
through 2001 when prices were soaring. But they are still quite
confident; only an insignificant 3% felt a need to lower prices going into 2002
(vs. 2% in 2001).
What about the vacationers and
their tastes? Are they still coming? What are they willing to pay? Are
they writing deposit checks as quickly as last year?
In terms of overall traffic (as
measured in "Property Views" as explained above), it's up 12% YTD vs.
up 35% last year. We think some of last year's surge, however, is attributable
to our site becoming more visible as opposed to a measure of vacationer
enthusiasm. From 2001 to this year, we think it's more representative of
market trends.
Bookings are the ultimate measure because they
indicate actual business transactions. Our unique searchable calendar
system requires our clients to keep their availability current by setting
weekly prices and indicating when a home is booked. Frankly, some do better
than others at this, so the data we quote has to be filtered through the lens
of the natural delays in their updating of their web page calendars. From
year to year, though, we assume equal delays, so the comparisons are
legitimate. IE, statistics for both years understate the actual bookings,
but equally. Interestingly, we expected a substantial slowdown in the
fall of 2001 in activity due to September 11. But bookings actually
increased a substantial 63% during November and December. (We do not have
bookings data before November 2000.) January so far has been up only 6%
over last year.
What are people willing to pay
this year vs. last? While bookings are up, are vacationers more
conservative due to the economic climate? Are their spending patterns for
vacation rentals a potential indicator of overall economic potential for next
summer? Fortunately, the news from our data is very encouraging.
Bookings data indicate that the average price booked a year ago at this time
was $1,938 per summer week; this year it is $2,267 for an impressive increase
of 17%. 20% of the bookings this year are for homes priced at more than
$4,000 a week vs. only 14% last year.
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www.weneedavacation.com was founded in December
1997 as a service to vacation homeowners and realtors in
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