Vacation bookings usually happen months in advance. Employees book the time off work. They buy the airline tickets far in advance to get the best prices. Of course this year is different. But people still want a get-away, perhaps even more than ever. The perception is that it’s not safe to board an aircraft, that a cruise is risky. In fact, the cruise industry is largely shut down, and the airline industry is operating at about 20% of its capacity.
Most of the air travel is essential travel and it’s short to medium haul in nature. Air travel has all kinds of restrictions. You will be expected to wear a mask for the duration of the flight. Meal and drink service has been cancelled and this becomes impractical on a 13 hour flight to Asia or even a 9 hour flight to Europe.
People have decided to vacation close to home. That means driving distance. We are now in peak summer season and listings for most vacation properties show that they’re fully booked until the end of August.
The exception to this is in areas where there is a lot of condo’s like at ski resorts; there tends to be a lot of availability at ski resorts. The perception is that it’s more difficult to social distance in a condo than in a standalone cottage or lakefront home.
The other place where vacation rentals are easily found is in areas where government mandated travel restrictions are still in force.
We also find that boat and RV rentals are almost fully booked for the entire summer. The only ones available are the result of last-minute cancellations because of international travel restrictions. Those with long standing reservations seem to have hung on until the last minute to see if travel was going to be possible.
Some vacation markets rely heavily on air travel to fill the rooms in a market. Those areas are definitely going to experience higher vacancy during peak season and lower nightly rates. For example, we have a portfolio of vacation rentals in the Rocky Mountains near Banff Alberta. The local driving distance population centers of Calgary and Edmonton will provide a strong source of demand. But they won’t make up for the plane loads of tourists from Japan, China, and Korea that regularly frequented the area in years past.
Instead of the usual $650 per night rate, we’re seeing strong occupancy at a more modest but acceptable $250 per night rate.
Markets along the eastern seaboard like the Jersey Shore, and the Carolinas are seeing strong occupancy. Hotel occupancy in Myrtle Beach is close to pre-pandemic levels according to hotel data analytics company STR Global.
Urban vacations are not as popular these days with social distancing still an important criteria for many families. For example, hotel occupancies in NYC have risen from the lockdown low of 9% to a current occupancy of about 40%. Nightly rates in NYC have dropped from an average of $250 per night to about $125 per night. But since NYC was a hotbed of Covid-19 outbreaks, it’s probably not at the top of the vacation destinations this summer.
Some areas are opening up to tourists, subject to a negative Covid-19 test result that is less than 72 hours old.
Some tourists have entered Canada by car and told the border agents that they were driving to Alaska which is allowed. But it seems some of them have been found stopping in Banff National Park. If a visitor drives straight through to Alaska with only minimal stops for fuel and food, that is permitted. If a visitor stays in a hotel, then they’re required to quarantine for 14 days at a designated quarantine location.