Port Lincoln Short-Term Rental Market Snapshot: August 2024
Introduction
As we reach the midpoint of 2024, with winter drawing to a close, it’s the perfect time to reflect on the past trends in Port Lincoln's short-term rental market and use this data to guide our strategies for the upcoming peak season.
To provide these valuable insights, we’ve utilised comprehensive data from AirDNA, a powerful tool valued at $500 per annum. AirDNA offers short-term rental operators unparalleled insights into market trends, competitor performance, and potential property acquisitions, making it an essential resource for anyone looking to optimise their rental strategies.
In this monthly snapshot, we’ll delve into key metrics such as booking demand, revenue trends, and occupancy rates, offering a clear picture of the current state of the market. Whether you’re a seasoned property manager or a new entrant to the market, this analysis will equip you with the information you need to make informed decisions and stay ahead of the competition.
Booking Demand and Seasonality
Over the past year, Port Lincoln has experienced a marked seasonality in booking demand. The data indicates a significant rise in bookings from October 2023, peaking in December and January, driven largely by the holiday season and the influx of tourists. During these months, the number of listing days booked soared, with December and January standing out as the busiest months.
However, as the holiday season waned, so did the booking demand.
From February 2024 onwards, there was a noticeable decline in bookings, reaching its lowest point in May. This decline could be attributed to the end of the peak tourist season, combined with cooler weather, which typically sees fewer visitors to the area.
The data also suggests a gradual recovery starting in June, likely due to early bookings for the upcoming spring and summer seasons. Property managers should consider adjusting their pricing and marketing strategies during these off-peak months to maintain steady occupancy rates.
Occupancy Rates and Guest Behaviour
Occupancy rates in the Port Lincoln market have seen some fluctuation over the last 12 months. The average occupancy rate currently stands at 58%, reflecting a slight decline of 5% compared to previous periods. This drop is most notable in the months following the peak holiday season, with occupancy dipping as low as 45% in May 2024.
Despite this decline, it's important to note that occupancy rates were much stronger in the months leading up to the end of 2023, with December reaching a high of 70%. The length of stay also varied significantly, with guests staying an average of 4 days in December compared to just 3 days during February and May.
The fluctuation in occupancy rates highlights the impact of seasonal trends on guest behaviour. During peak months, guests tend to stay longer, likely taking advantage of extended holidays and favourable weather. On the other hand, the shorter stays during off-peak periods could be indicative of weekend getaways or last-minute bookings.
For property managers, this means that maximising occupancy during off-peak months will require a more aggressive approach, such as offering discounts for longer stays or running targeted promotions to attract guests during these slower periods.
Revenue and Pricing Trends
Revenue performance in Port Lincoln's short-term rental market has closely followed the trends in occupancy and booking demand. The highest revenue was recorded in December 2023, with the average Revenue Per Available Room (RevPAR) reaching $252.6 on weekends. This surge in revenue is consistent with the peak in booking demand and the longer average stays during this period.
However, as the peak season subsided, so did the revenue. By May 2024, RevPAR had dropped to $142.1, a 1% decrease compared to the previous year. Despite this decline, the market still shows promise, with an overall annual revenue averaging $40.7K per property.
A deeper dive into pricing trends reveals that luxury properties consistently command the highest daily rates, averaging around $346.4 per night, even during off-peak months. This indicates a strong demand for premium accommodations, particularly among higher-end travelers. Meanwhile, professionally managed properties also performed well, with an average nightly rate of $317, reflecting an 8% increase in revenue compared to other types of listings.
These insights suggest that while the market experiences seasonal dips, maintaining a strong pricing strategy, particularly for luxury and professionally managed properties, can help sustain revenue throughout the year. Additionally, adjusting pricing dynamically in response to booking trends and guest lead times could further optimise earnings.
Market Performance Overview
The overall market score for Port Lincoln currently stands at 74, indicating a stable but moderately challenged market. This score is influenced by several factors, including rental demand, revenue growth, and seasonality.
Rental demand, while strong during peak months, faces challenges in the off-season, as reflected in the lower scores for revenue growth and rental demand (61 and 46, respectively). However, the market’s seasonality score is quite high at 79, underscoring the predictable and cyclical nature of demand in Port Lincoln.
The market has also seen a 6% growth in active listings over the past year, with a total of 148 active listings. Airbnb remains the dominant platform, accounting for 67% of all listings, followed by Vrbo and other channels. The majority of these listings are 3-bedroom properties, which continue to generate the most consistent revenue across the year.
Key Metrics for Maximising Bookings in the Upcoming Seasonal Period
As we approach the high-demand season, here are the key metrics and strategies that will help you optimise your bookings and revenue:
Advance Booking Strategy:
The data indicates that a significant portion of bookings are made 31-60 days in advance, especially during peak months.
Action: Open your calendar for bookings at least 90 days ahead to capture early interest, particularly for the high-demand period between December and January. This allows you to secure reservations well in advance and adjust pricing dynamically as the booking window shortens.
Dynamic Pricing Approach:
Far Out: For bookings made more than 60 days in advance, maintain competitive pricing to attract early bookers. Consider offering slight discounts to incentivize early commitments.
Closer to Date: As the booking date approaches (15-30 days out), gradually increase prices, particularly for weekends and premium properties, to capitalize on last-minute bookings. Implement surge pricing during the peak season (December to January) when demand is highest.
Occupancy Focus by Month:
The months from September through May are crucial for maximizing occupancy and revenue. Here’s a breakdown of the occupancy rates during this period:
September: 60% occupancy
October: 65% occupancy
November: 68% occupancy
December: 70% occupancy (Peak month)
January: 68% occupancy
February: 55% occupancy
March: 60% occupancy
April: 57% occupancy
May: 50% occupancy
Action: Prioritise marketing efforts and promotional campaigns starting in September to capitalise on the increasing occupancy. December and January are the peak months where aggressive pricing and marketing can maximise your returns. Pay close attention to March and April as well, as these months signal the end of the peak season, allowing you to adjust strategies for the upcoming off-peak period.
Conclusion
The Port Lincoln short-term rental market presents a mixed yet promising landscape as we move further into 2024.
While seasonality plays a significant role in shaping market performance, there are opportunities for property owners and managers to capitalize on peak periods and strategically navigate the off-peak months. By adjusting pricing, targeting promotions, and focusing on high-performing property types, there's potential to sustain and even grow revenue throughout the year.
As always, staying informed and agile in response to market trends will be key to success in the dynamic Port Lincoln rental market.
