Chinese officials alerted the World Health Organization in early January of a new virus named 2019-nCoV (Coronavirus) quickly spreading. Since then, many countries including the United States, Japan and Australia have implemented travel restrictions banning any foreign nationals who have recently visited China from entering.
How is this impacting current international travel trends?
Hurricanes, natural disasters, floods, and wildfires are nothing new to vacation rental property managers, but how does the threat of a worldwide pandemic, like Coronavirus, affect bookings? When facing unexpected travel restrictions, what’s the best strategy to defend your revenue?
Our team of revenue management experts took a look at recent occupancy trends in top Chinese outbound travel destinations to investigate how travel restrictions might have impacted short term vacation rental occupancy levels. We pulled market level occupancy data from multiple markets from January 26th through February 1st to see how Coronavirus may have already impacted travel trends. Data from the China Outbound Tourism Research Institute and chart below from CNN displays which countries may be impacted from a short term decline in travel the most. Hong Kong, Macao, Thailand, and Japan received the most outbound Chinese visitors in 2019 and are already seeing year-over-year declines in occupancy levels.
Alongside a widespread decline in occupancy levels for these markets, we also reviewed cancellation data to see if travelers were adjusting their previously planned trips in the wake of the virus. That data was even more telling, with cancellations increasing heavily year-over-year for the same January 26th to February 1st date range. At least for markets that rely heavily on outbound Chinese tourists, cancellations in the short term are on the rise and occupancy levels are beginning to fall.
Top Chinese Outbound Tourism Destinations 2019:
Market occupancy data from January 26th to February 1st:
Cancellation data from January 26th to February 1st:
What does this mean for you?
The decrease of outbound Chinese tourism paired with inbound travel restrictions in many countries around the world is causing occupancy levels to fall. With the many unknowns that come with an outbreak like Coronavirus, there is potential for long term impacts to certain markets. It’s becoming increasingly important to align your pricing and revenue management strategy around national and global travel trends.
Dynamic pricing automatically adjusts for stress within a marketplace by looking at occupancy so you don’t have to stay on top of the latest news and manually lower your prices. For current Beyond Pricing users, check out the article in our Support Center here to see how utilizing custom last minute discounts can help address lower demand in the short term for any market. For any long term changes to market demand, it is best to make adjustments to a listing’s Base Price and annual minimum accordingly (more information can be found here).
We are hoping the vacation rental industry in the most affected markets can weather the storm and that those impacted get well soon.