Due to the Coronavirus outbreak, the travel industry is suffering it’s worst shock since 9/11, and it’s effect on the market is still growing daily. Disruptions to travel and general uncertainty have significantly shifted short-term booking patterns, and we expect these trends to develop as governments react to this crisis. With that in mind, we dive into the following three trends to understand what can be done to make the most of this situation:
- Drop in booking volume
- Increase in average length of stay and demand for mid-term bookings
- Drop in booking lead time
Volume of new bookings is down 80-90%
This isn’t news to anyone in the industry. Europe has experienced a drop of close to 80-90% in new bookings as compared to mid-Feb and North America is not far behind. Much of the decline in new bookings might be attributable to travel restrictions and guidelines put in place by federal and local governments around the world, some even going so far as shutting down short-term-rental altogether.
Length of Stay – A shift towards longer bookings
Global trends indicate that there has been a significant decrease in the share of short-term stays. Before March 2020, the share of bookings for stays of 7 days or less represented almost 80% of total new bookings. However, in the last two weeks, we have seen a reversal of this situation, where bookings of 8 days or longer now represent up to 65% of new bookings. Even considering the overall decrease in volume, bookings of 8+ days have actually gone up considerably in the last few days. This trend is milder in Europe, and much more noticeable in North America and APAC. Starting second week of April the volume for these bookings seems to have started decreasing.
Lead time – Last minute bookings
The average lead time has decrease by 50% since the end of January and early February. With lack of tourist demand and most bookings being essential immediate travel, guests have significantly reduced booking more than 7 days in advance. The stark drop in bookings for far out dates can be seen in the chart below, where we show that bookings for far out dates have all but disappeared. The demand for stays starting within the next week is also down, but not as drastically. Unlike other markets where last minute demand is also cut in half, AUS-NZ are seeing last minute bookings hold steady. Given the uncertainty in the environment right now, it makes sense that guests do not want to book stays that are too far out as no one has a firm idea of when this will subside.
Notes:
- Since the situation is rapidly changing around the world, we will be updating these charts frequently.
- We have tweaked our pricing algorithms and also put together some recommended action items for our users based on the data seen here. If you currently use PriceLabs, please do review Handling the Impact of Coronavirus on Vacation Rental.
Our primary concern is the health of our clients and partners, so keep in mind the safety advice of the World Health Organization. As always, if you have any questions, please email us at support@pricelabs.co.
