This summer, temperatures are not the only things rising – gas prices are, too. According to US Travel Association, nearly 60% of American travelers saying that rising gas prices will impact their travel plans over the next six months. Based on these reports – the vacation rental industry will begin feeling the effects if not already.
If your business is in a market that thrives on last-minute bookings, you might be experiencing slower reservation pace and quieter call centers. Owners with properties new to the vacation rental market — or those with an otherwise open calendar — could be concerned about getting bookings considering upwardly-trending gas prices.
Don’t fall asleep at the wheel! Be proactive in your marketing efforts. Whether you are managing ten properties or 1,000, the commonality is: gas prices could affect your revenue. Make sure you have a marketing strategy in place today to address higher gas prices tomorrow.
Are gas prices really scaring away travelers?
Have we all finally come to the understanding that everything costs more these days? First, it was our trips to the grocery store and now, our commutes and road trips. Brynn Flaherty, Buetent’s Director of Marketing Services says, “Gas prices are definitely a frequent topic of discussion when I meet with clients. Each market is different, but there is a common theme – gas prices are making an impact on vacation rental bookings this summer.”
Right now, travelers are considering how to vacation this summer. Will they finally book that international trip they have had on hold for the last few years? Or will they opt for a closer-to-home destination? When choosing between airfare or road trip expenses, hearing about gas prices on the rise across the nation — with no end in sight — makes the decision a difficult one for travelers.
But soaring prices at the pump aren’t scaring away all summer travelers, according to a CBS News interview with oil analyst, Tom Closer. When asked how high gas prices can go before Americans really pull back on driving, Tom responded, “Well, that’s an experiment in progress right now, but my sense is that people are still going to take vacations.” US Travel Association agrees, reporting that more than one-quarter (28%) of travelers plan to spend significantly more this summer over their 2019 travel budgets for marquee trips, due to higher prices as well as accumulated savings.
How are companies analyzing their booking trends for the summer?
Our industry’s astronomical 2020 and 2021 booking trends are anomalies. Given that, Flaherty’s team has revised reporting for clients. “While it’s not a perfect strategy, instead of pulling year over year (YOY) numbers, we are pulling 2022 vs 2019,” states Flaherty. “It really makes a difference when comparing your booking patterns to take into account that the last two years are virtually impossible to compare to.”
The good news is that even with reservations slowing down, many businesses are thriving, and their revenue is higher than in pre-COVID times. According to Flaherty, her team’s observations align with those of the travel industry overall. US Travel Association data shows that as of April 2022, travel spending has, for the first time since the start of the pandemic, surpassed 2019 levels ($100 billion, up by 3%).
What about the new homeowners whose investment properties are just hitting the vacation rental market?
Property managers are having difficult conversations with new homeowners who have been told that the vacation rental market is better than ever. Excited about the prospect of income from their new investment property, novice owners are expecting instant bookings based on the incredible success of vacation rentals during the last 24 months. Then, as soon as their property hits the website – bookings start to slow down.
Are you seeing a trend of specials and discounted rates?
“On our daily calls with Bluetent clients, discussions about offering specials and discounts are definitely a trend, Flaherty explains. “Most of our clients have revenue management strategies in place to follow the supply and demand of their unique markets. In addition to revenue management strategies, advertising specials and slashed prices on your website do have a positive psychological effect on shoppers. Travelers love seeing that they are getting a deal on their vacation.”
Are discounts and specials really the answer?
Simply slashing prices can help a single struggling property, however when you look at it on a larger scale, the picture is more complex. A multi-channel marketing strategy is necessary to keep your business at the top of your market. A few strategies that our digital marketing experts are deploying for clients are:
- Email campaigns targeting niche travels with properties that meet their specific needs
- Notification banners advertising specials
- Pop-up messages that serve up incentives
- Retargeting advertising
- Pay-Per-Click advertising campaigns targeting top search phrases
- Social ads targeting travelers in drive-to markets
- Booking Abandonment options on direct booking websites
So, in summary: yes, the gas prices are on the minds of travelers this year. However, studies are forecasting that 2022 travel spending will still beat out that of 2019. One thing is for certain: a multifaceted marketing strategy will help safeguard your business’s revenue from economic impacts beyond your control.