The Commercial Real Estate Alpha Site

By Sean Dreznin, 9/11/23

Picture by Sean Dreznin

While the market has been very good for most owners of vacation rental investments in the majority of markets, (near beaches, lakes, mountains, valleys, national parks, etc) there is an undercurrent of concern permeating the bottom line of owners.

I’ve recently spoken to over 100 owners of vacation rental properties in my Gulf Coast of Florida markets (Pinellas, Sarasota, Manatee, Lee Counties, etc) and the overwhelming consensus is that Quarter 2, 3 & 4 are all going to be lower this year than the previous 2 to 3 years. Mostly this relates to the amount of reservations and the length of those guests stays. Some of those results speak to the costs associated with those units and properties.

While some owners have started to offer concessions through reduced rates or advantageous offerings to guests, the majority of owners have held steady with their most recent rates and offers.

• Approx 65% expect the end of this year and the first half of 2024 to be down over 10% from the recent past.
• Approx 15% expect the end of 2023 and the first half of 2024 to be even or less than a 5% reduction from the recent past.
• Approx 20% expect the end of 2023 and the first half of 2024 to be even or less than a 5% increase from the recent past.

Picture by Vicki Norton

Please keep in mind the overwhelming majority of these properties are between 4 and 20 units and all are on the Gulf Coast of Florida with some being waterfront and others being near beaches and water.