Spring Break Traffic in The Emerald Coast
2021 was an incredible comeback year for vacation rentals as pent-up travel demand was released. Many markets saw increased occupancy not only during peak seasons but also during shoulder and off-seasons. And, with increased occupancy came even higher nightly rates.
With this in mind, leading luxury asset management firm, Echelon Luxury Properties shared with us an indepth look at the occupancy levels of popular spring break destinations and how they compare to the Emerald Coast. Keeping this data in mind, we'll also discuss tips to consider when investing in a luxury home for rental income purposes.
Emerald Coast Spring Break Traffic Data
Echelon, along with Key Data Dashboard looked at the data for spring break occupancy rates, and saw that some markets are pacing behind where they were last year. For example, in 30A, the occupancy rate is pacing 12% behind last year. In Gulf Shores and Orange Beach, Alabama, it's down 16%. South Padre Island is down 11%.
However, with increased traveler demand last year, it's not entirely surprising that occupancy has decreased slightly this year. And although occupancy is lower than last year, a majority of these markets are still meeting or exceeding occupancy levels from 2019.
It’s also important to keep in mind that markets that are currently running slightly behind 2019's occupancy, like Gulf Shores and Orange Beach (-5%) and Myrtle Beach (-1%), could still catch up as reservations continue to be made. So what does this mean for those looking to invest in a luxury property to rent out during Emerald Coast spring break traffic?
First, while some markets may have cooled since 2021, overall, rates for the spring are performing better in 2022 than they did during the same period in 2019 and 2020. Further, occupancy rates can and do fluctuate, so a market that is down some now might be up next year.
With that in mind, we still believe those looking to invest in luxury property for rental purposes during Emerald Coast spring break traffic should still see a healthy return on investment.
Top Tips to Keep in Mind when Investing in the
Look at long-term trends: When looking at market data, it's important to look at the long-term trends, not just the short-term fluctuations. This will give you a better idea of how the market is performing as a whole.
Don't just look at the occupancy rate: The occupancy rate is an important metric to look at, but it's not the only one. You should also look at average daily rates and revenue per available room. This will give you a better idea of how well your property is performing.
Location is key: When it comes to luxury properties, the location is key. Make sure you invest in a property that is in a desirable area.
Consider the season: Just because a property is a luxury property doesn't mean it should only be rented out during the high season. Many renters still desire luxury properties even during the less busy parts of the year. It goes without saying that renting throughout all parts of the year will result in additional revenue.
Have a solid management plan in place: A luxury property is only as good as the management team that is running it. Make sure you have a team in place that can handle all the needs of your property.
Spears Group is committed to providing exceptional service and market expertise to help you exceed your real estate goals. Though our primary focal point is the luxury segment of our market, we’re always keeping a watchful eye to data pertaining to the vacation rental industry as a whole to best educate our clients on their investment.