Shortly after Chinese officials alerted the World Health Organization in January of a new virus named 2019-nCoV (Coronavirus), we shared a blog post detailing the noticeable changes in market demand for the first vacation rental markets affected by the outbreak. We also shared our top tips for vacation rental managers to help them navigate the changes in travel trends and remain agile during these times of uncertainty.  

While there are concerns about a downturn for the market in general, property managers are most acutely feeling the impacts in the short term due to widespread cancellations. With Airbnb announcing that they are expanding their extenuating circumstances policy to cover travel cancelled due to Coronavirus, the financial impact on property managers and hosts is acute and immediate.

At Beyond Pricing we have internal insight and reservation data into over 240,000 listings as well as occupancy and pricing data from Airbnb, HomeAway, and Expedia. Here we take a look at cancellations to date in key markets. It should be noted that with the wide range of cancellation policies found in short term rental industry (STR), we consider a cancellation only when it is entered into the property management system and not if a guest tries to cancel but is unable to do so, or is a no show.

Europe Cancellations
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Given the caution people are exercising around traveling, we start by looking at the percentage of reservations that are cancelled as a way to gauge if guests are showing up or cancelling all together.

Examining Europe, Rome is seeing close to an 85% cancellation rate for most of March as Italy remains in lockdown. Milan is seeing a 70% cancellation rate, as well as high cancellation rates for April as the Salone del Mobile, the world’s largest furniture fair, has been postponed until June.

The rest of mainland Western Europe is close behind as reported cases of people contracting the virus continues to spread. Madrid has the highest cancellation rate, followed by Amsterdam and Barcelona. In Barcelona, the cancellation of the Mobile World Congress Trade Show, an event that attracts more than 100,000 attendees and was expected to commence on February 24th, increased cancellations to 45%. Dublin, while not experiencing overall high levels of cancellations, is seeing a spike in mid-March as St. Patrick’s Day festivities were cancelled. Cannes is also going above a 30% cancellation rate for the last week in March as MIPTV has been shelved for 2020.

Almost all major European cities and STR destinations are experiencing higher cancellation rates when compared to the first two months of the year. On the positive side, it appears that the cancellation blitz, at least for now, is subsiding towards the end of March, signaling the possibility of things starting to get back to normal by Easter. Less urban areas, and especially ski markets such as Chamonix, seem to faring the best as of now.

US Cancellations
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Turning to the United States we see similar trends, but so far a bit more muted. This is not surprising given the US is currently at an earlier stage in the trajectory of the spread of the virus when compared to countries such as Italy.

People are steering clear of the larger cities with the highest percent of cancellations being seen in New York, San Francisco and Miami. Austin is also witnessing mass cancellations, boosted by the cancellation of SXSW in March. Orlando is seeing a sustained increase in cancellations in late March and April, no doubt tied to the announcement that Disney World is closing its theme parks. More bad news in Florida with the cancellation of Ultra Music Festival in Miami resulting in a spike in cancellation rates.

While the urban areas in the US are quickly becoming ghost towns, the guests of the more rural and traditional vacation markets seem more attached to their vacations. So far we haven’t seen as drastic of an uptick in cancellations for areas like the Smoky Mountains, Gulf Coast & Panhandle and Hilton Head. Additionally, unlike Europe, where cancellation rates are already high for summer bookings, vacationers in the United States aren’t willing to give up their summer plans just yet.

While uncertainty seems to be everywhere, we at Beyond Pricing will continue to prioritize updating our prices as things change, giving some peace of mind in this turbulent time. We also understand the severe and very personal impact this crisis is having on the members of our industry and are here to support all its members. We will continue to share and distribute data on the changes we are seeing and we urge property managers and owners to reach out if we can supply information or data that will help them during this uncertain time.