European Vacation Rentals and COVID-19 European countries have been hit extremely hard by the novel coronavirus outbreak. After China, Italy is the second major epicenter of the virus. Other countries have continued to see an escalation in the outbreak. The timing of the spread of cases and governments’ policy reactions have affected vacation rental markets
European Vacation Rentals and COVID-19
European countries have been hit extremely hard by the novel coronavirus outbreak. After China, Italy is the second major epicenter of the virus. Other countries have continued to see an escalation in the outbreak. The timing of the spread of cases and governments’ policy reactions have affected vacation rental markets differently.
A decline in new reservations was one of the first signs of the significant impact the virus would have on Europe’s vacation rentals. After a strong start to the year, the number of guest bookings per available property began to decline in early February. By the end of March, bookings were down about 95% versus 2019; reservation activity has stopped almost entirely as of March 26.
Bookings for arrivals more than 60 days in the future were the first to decline. In January, reservations for arrivals within 60 days stayed strong. In February, reservations for arrivals within 30-60 days stayed above last year’s rate but arrivals within 30 days began to decline. By March, reservations were well below last year’s rate, regardless of arrival. The differences in bookings for thee arrival windows reflect the uncertainty of the length of the pandemic.
There have been major differences in the spread of the virus between countries. Italy was the first European epicenter of the coronavirus pandemic. After a strong January booking season, booking activity declined significantly during February and then plummeted during March as the number of confirmed cases rose exponentially. The spread of the virus in Spain occurred later and thus booking activity declined later and at a slower rate.
As bookings have reflected the spread of the coronavirus, so have guest cancellations. Cancellations increased steadily in England, France, Italy, and Portugal throughout March. In France, Italy, and Portugal, cancellations peaked after lockdowns or states of emergency were announced. In England, cancellations peaked on March 11, perhaps in response to Italy’s lockdown. Several European countries also experienced bumps in cancellations on March 11 or 12, corresponding to travel restrictions between the United States and Europe.
The decline in bookings and an increase in cancellations has had tremendous effects on the adjusted paid occupancy rates for European markets. In January and February, occupancy rates in England, France, Italy, and Portugal exceeded last year. However, the rates quickly declined in March and will likely remain below last year in April and May. The vacation rental adjusted paid occupancy rate is currently on track to recover for the summer season but the final outcome will depend on the length of the COVID-19 outbreak. Travelers will be eager to book a vacation and leave their homes as travel restrictions are lifted and economies bounce back.