Demand for vacations has seen a meaningful uptick this month, offering the first sliver of hope for the tourism and hospitality industry in months. Recall, just days ago we noted that Americans were eager to leave the house, but terrified of the potential consequences.
Ahead of the Memorial Day weekend, vacation homes in places like Florida and Georgia, where states are starting to re-open, are also starting to open up. New rental bookings had started to recover in early May and are now 90% higher than a year ago in Florida, according to the Financial Times.
Georgia and Alabama are also starting to see upticks in booking, highlighting that those with the financial means are eager to get out of the house and start their summer vacations. Meanwhile, the U.S. jobless rate is expected to approach 20% this month.
The Florida number suggest a favorable leading economic indicator, FT says. Some of these rentals are set for the next 30 days, which stands at odds with how people usually book summer vacations: well in advance. Jason Sprenkle, chief executive of Key Data Dashboard said: “Over the last week, the demand for vacation rentals across the US has seen a huge increase, now surpassing the demand for this same period last year.”
Hotels and rentals are doing their part, too, loosening cancellation policies to entice more business and adapt to the environment.
The uptick is also good news for the states, as taxes from these rentals can be a large revenue source for states. For example, in 2019, Airbnb collected $137 million in taxes for Florida, which was up from $86 million the year prior. In 2018, Florida saw a total of $16.6 billion in direct spending for vacation home rentals, which accounted for about 1.6% of the state's GDP. About 11% of tourists stayed in vacation rental homes in 2018.
Hotel revenues were still down about 74% for the week ending May 16, however, and not all states have seen rental bookings recover. Hawaii, for example, has still not recovered from its April lows due to a lack of air travel. California has also seen new rental books below totals for May 2019, despite a small rebound.
Vince Perez, a property manager and rentals software provider in California said: "The guests are angry about the lockdowns."
He concluded: “If you are in a destination leisure market and you are outside the cities, you are going to see — and you are seeing — an uptick in bookings.”