1 year ago
We've been receiving many questions about a few articles recently released (namely this one on CNBC), regarding the current state of the Hamptons rental market. Below we share our perspective on the drivers of this slow down and why StayMarquis is better equipped to manage these headwinds for owners compared to traditional brokers.
We recognized the slowdown in the rental market in late February/early March when we saw a rather drastic shift in booking behavior. Booking patterns started to mimic pre-pandemic norms in terms of lead time and length of stay per booking. We noticed that of all bookings placed in Q1 of 2022, 14% had a check-in date within one week. By comparison, only 7% of bookings placed in Q1 of 2021 had a check-in date within one week. In terms of length of stay, almost 90% of bookings this year have been for 7 nights or less in the Hamptons. Brokers have a hard time facilitating bookings of these lengths as it requires the same amount of effort for substantially lower commissions.
The drivers of the market slow down come down to basic supply and demand dynamics - more properties are available while fewer people are looking to rent in the Hamptons this year. The number of booked properties through June 1st, 2022 has increased 13% vs. 2021 (the overall number of nights booked has decreased 8% year-over-year). As a result, the number of nights booked per property is down 19% year-over-year -- its lowest level since 2019. Competition in the market is heating up as inventory levels rise amidst waning demand. The strongest lever owners can pull is around pricing - while average nightly rates have stayed high, lowering pricing will result in strong occupancy rates and overall higher revenue. Many owners, however, have held or even increased pricing relative to 2021 levels, leading to higher vacancy.
We strongly believe that our analytics, historical and forward looking, combined with our experience in the market and tools geared towards matching renter demand and booking windows, provide an edge over traditional brokerage tactics. If you have any questions about what we're seeing in the market, or how to best optimize your listing, please do not hesitate to reach out.