Short-term rental managers in the UK could be heading for a bumper summer according to Key Data.
Occupancy levels and average daily rates for May, June, and July are tracking well ahead of 2023 – as outlined in Key Data's UK Short-Term Rental Quarterly Report. This follows occupancy levels increasing in the first quarter of 2024 across the UK, with Wales achieving the largest year-on-year increase at 12%, Scotland 9%, and England 6%.
Meanwhile, daily rates are pacing much higher than last year – though hosts should expect to see the average trend downwards as we move through the booking window. Reservations made early tend to be for larger units at higher prices.
The average stay length in 2024 is slightly shorter than in previous years, which is contributing to lower occupancy rates. At four days in April 2024, stay lengths were the same as last year, but 5% shorter than in 2022. And though the change from 2022 may seem slight (0.2 days), the 5% decrease in the average length of stay leads to 5% fewer nights sold if the number of reservations stays the same.
The report states: “This means that property managers need to work harder to book stays just to keep occupancy consistent year-over-year. Additionally, stay lengths are pacing shorter than last year for stays in May through July. With nightly rates increasing and stays becoming shorter, these changes are an important indicator of changing consumer behaviours.”
The source of bookings is also notable. According to Key Data’s statistics, Airbnb and Booking.com made up more than 80% of guest check-ins in Q1 2024. Both Airbnb and Booking.com achieved an increased share of bookings compared to the same period in 2023, while Vrbo decreased by 0.2% and direct bookings dropped by 0.6%.
Key Data’s peak summer season pricing tips
Maximise revenue by capitalising on major events
Pricing for major events is a delicate balance but can be highly lucrative if done correctly. With Taylor Swift’s Eras Tour and Wimbledon visiting London, England, the Olympics being held in Paris, France, and the running of the bulls occurring in Spain in the first week of July, these events will draw millions of people to your destination. Are you leaving money on the table? The goal is to optimise your revenue, not just achieve high occupancy or increase your rates.
Understand where your guests are coming from, and which guests to target
Do you know where to market your properties? Do you know who your target guest demographic is? Not all guest’s budgets are created equal, so optimise your marketing budget by targeting your highest-paying guests.
Use your distribution channels wisely
In the UK, Airbnb and Booking.com constitute the majority of guest bookings. However, bookings made through Vrbo command higher rates, and direct bookings have longer stay lengths and booking windows than the other channels. Utilise your booking source information to create an effective rate strategy for your properties.
Push prices during high-demand periods
During the King’s coronation in 2023, property managers in London were able to increase their revenue by 60% over the same period the previous year. During high-demand periods, rates should be increased to help drive RevPAR, especially during off-season periods.
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