There is no secret that Spring is a perfect season for vacation home rental owners. Following the winter holidays, where nightly ratesare sky high, “snowbirds” are renting vacation homes for entire months of January and February. When the Spring break begins, parentsfrom all over the U.S are bringing their children to visit the variety of Orlando attraction parks. Normally, month of March is extremelybusy for Orlando hospitality industry, including short term rentals. Orlando visitors book their accommodations way ahead of time, and often the month of March becomes sold out before the end of the year. Vacation rental homes where families are able to stay together, prepare their family meals, and enjoy private swimming pool are particularly popular. However, March of 2020 did not work as usual. Instead, it was the month that no one expected.
At this time Orlando residents were experiencinga shortage oftoilet paper and hand sanitizingproducts and rapidly spreading news about some virus called corona or novel COVID-19 outbreak. While we were concerned about supplying our guests with toilet paper during their stays ?, concerned guests started sending their cancellation requests for upcoming reservations. Every new day was bringing more cancellation requests. As situation with COVID-19 was negatively progressing, AIRBNB, one of the largest booking channel, has activated “extenuating circumstances policy” and started offering impacted guests the option of cancelling reservations without charge. Our every day job was just dealing with cancellations and refunds. As a result, we have lost all hardlyearned March reservations almost instantly.
Overall, the COVID-19 has left us with nothing. Our cleaning crew had no job, and our Sales Agents had no sales. Our homeowners faced routine expenses such as HOA dues, pool & lawn maintenance, property taxes, and no upcoming revenue. It felt like entire world closed indefinitely amid COVID-19 fears. Silence at first, then one main question “What is next?”, which was asked by the homeowners, guests, vendors, and employees every moment. Mass lockdowns and quarantines were the next step. And we started to turn some less efficient vacation rentals into long term rentals to help our investors to cope with their liabilities. Luckily, our Long-Term Rental Division managed Mila Realty Property Management was able masterly secure some twelve months leases at no time.
In the meantime: still no school, no work,and stay home order. Since some states had more restrictions, people were looking for “survival”. Florida warm weather attracted many, and during the Spring 2020 it became a dream destination of millions of Americans. When it comes to domestic visitation, research supports asix percent increase in 2020 from 2019. Orlando got a big slice of the “visitor pie”. As a results, vacation home rentals were extremely desired. Guests were looking for privacy while still enjoying the warm private swimming pools often overlooking the nice lakes or beautiful conservation areas. Unfortunately, as soon as the travel movement has been noticed, the vacation rental ban was introduced by the Florida Government. Specifically, renting private vacation homes was prohibited. This privilege was only available to the hotels. Luckily, soon the order was revised to exempt longer stays (30+ days)in vacation rental homes from the ban.
Renting short term rentals for 30+ days was the next step in our emergency plan.We were hesitant at the beginning, but demand was right there. We adjusted our minimum nights to 30 nights, and within nearly one week we were completely sold out for the rest of the Spring and beginning of Summer. Indeed, the nightly rates were not the same as expected from high seasonality. To stay competitive, we had to lower the rate and add the utilities such as cable, water, and light to itin order to keep both guests and homeowners happy. Now guests were able to afford longer stays in the vacation home rentals and homeowners were able to generate enough income to maintain the properties.
As Florida was reopening and 30+ days minimum for vacation rentals was lifted, we still hadguests, who stayed longer. Out of necessity, organizations were increasingly moving their employees to more remote workforce. As a results Florida started welcoming new residents, more thanbefore. A study of Orlando Economic Partnership found that out of 1,500 people moving to Central Florida each week, 1,000 people made Orlando their home. Many residents of different states were comfortable with renting vacation rental homes for entire families while they were looking for a place in Orlando to call home.
Then theme parks started to reopen, and Orlando vacation home rentals startedslowly turning back to normal. Now we are talking about short bookings that normally last from two to four nights. To address a health concern of the guests, we developed a new policy and procedure for our cleaning crew. We modified all our listing descriptions to make sure that guests can familiarize themselves with our precautionary measured related to COVID-19. The message was “Your safety and enjoyment in our homes is #1 priority. We wipe down anything you may touch during your stay with approved by The Environmental Protection Agency disinfectants to kill the viruses and germs. We use detergent and bleach or color-safe bleach to kill germs. To boost the effect, we use steam settings or dryer’s hot cycle for at least 45 minutes. Followingthe National Sanitation Foundation, our dishwasher machines operate in the mode to reduce 99.999% of bacteria” It was a true winning move.
Per Visit Florida, despite ongoing international travel restrictions, 1.1 million overseas visitors came to Florida in Q2 of 2021, which indicates an increase of 854 percent from last year. Travel from Canada rose by over 74 percent, with 15,000 Canadian travelers visiting Florida between April and June. Therefore, hospitality market including vacation rentals was strong, or stronger than many other industries. However, there still travelers who are hesitant to book and pay in advance due to ongoing pandemic and possible health issues that may affect travel plans. To work with this group of people, we relaxed our cancellation policy. Our practice shows that our phenomenalresources and capabilities are sufficient to fill any vacancy gap in case of last-minute cancellation within as little as 72 hours. So, why not to help travelers to make decisions with confidence? So, we started allowing guest to cancel any booking as late as five days before arrival if guest’s travel plans have been impacted by COVID-19. We can feel appreciation of our customer resulting in increased number of returning guests, new customers, and excellent feedback.
So, how did we survive?
• Turning some less efficient vacation rentals into long term rentals.
• Renting short term rentals for 30+ days
• Precautionary measures and sanitized properties
• Relaxed cancellation policy
Based on our experience, we seeonly brighttrends for Orlando vacation homes and hospitality industry. Especially now when we know that the U.S. is planning to open its boarders to international travelers on November 8. Before COVID-19, about twenty percent of the Florida visitors were travelers from overseas. So, now we are excited to accommodate international guests and increase our reservation flow by 20 percent. Perhaps it’s time to start bringing back some inventory that was rented long term in 2020.
Master Consultant, Investor, & Managing Broker