May 21, 2024 - With the unofficial start of summer on Memorial Day only a few days away, WeNeedaVacation.com has assessed the state of the vacation rental market for the Cape and Islands. This year has continued to see a return to the demand of pre-pandemic times resulting in less traffic compared to the 2020-2023 years. The reduced demand has also created greater availability and some softening of prices recently.
Bookings
Overall bookings for the May through October 2024 season remain positive in comparison to last year. They are up 3% from 2023 and 12% over 2019.
By region, bookings for Cape Cod remain ahead of pace from 2023, whereas the Islands are behind.
Much has been reported recently on the large increase in inventory and available homes on the Cape and Islands, some even claiming a "flooded market." We believe these numbers to be overstating the situation and misleading.
While there is greater rental availability than in recent years, this has more to do with the pullback in demand from the peak pandemic years along with the sharp increase in prices.
A lack of a single source for inventory numbers is partially responsible for the conflicting calculations. When the lodging tax for short-term rentals (STRs) went into effect in 2019, rental owners were required to register with the MA Department of Revenue. The DOR does not distinguish between those STRs that are actively renting vs. those that are no longer renting.
There have been reports of anywhere from 18,000 to 19,000 STRs on Cape Cod (per Cape Cod Commission and Cape Cod Chamber of Commerce who receive their data from the DOR) equating to a 11-12% increase in inventory from 2023. WeNeedaVacation numbers show only a 4% increase from last year and are now on par with 2018-2019.
Availability
It is not surprising to see higher availability for the first week of summer (June 22), when schools are just completing, and at the end of August, when kids are beginning to return to school. Another highly available week this year is the one after July 4th. Many families already have time off around July 4th and will be less likely to start a vacation right after the holiday.
Pricing
Since 2021, homeowners have been aggressive with their pricing at a record-setting level, and with this year’s cooling demand, it was inevitable that prices would reduce on average. However, heading into the new year, we reported that the average price increase was still aggressive at +9% higher than last year! Owners adding their initial pricing since January 1 have been more realistic, with only a 2% increase from 2023 in reaction to the reduced demand.
Not all homeowners increased their prices. In fact, nearly 14% reduced their rates from 2023. During the 2022-2023 years, we saw that only 3-6% reduced their rates from the prior year.
Lastly, at this time of year, owners start to reduce prices to secure bookings. This spring has seen an unusually high reduction of 10% or more for the remaining summer weeks, especially on rentals that had aggressive pricing over the last few years.
Look Ahead
The desire to get back to the Cape & Islands to vacation has been consistent for decades. While there is still plenty of availability, especially at both at the start and end of the summer, the rush will be on for last-minute vacationers to book their vacation home.