Vacation-rental market firm, but visits short
Northern Nevada Business Weekly
LAKE TAHOE – The market for vacation rentals at Lake Tahoe is strengthening and consumers aren’t demanding deep price discounts as they did in recent years, property managers say.
However, shorter stays are still the norm.
The market for high-priced rental homes in Lake Tahoe tanked with the national economy as cost-conscious vacationers opted against weeklong trips to the lake, and revenues for property owners fell as price-minded property managers slashed costs in hopes of luring more customers.
However, several of Lake Tahoe’s largest property management firms say business is on the rise this summer over last year, and customers are unlikely to see further price cuts.
NAVIS, a Bend, Ore., firm that helps vacation property managers track market statistics, says check-ins at Lake Tahoe properties rose 84 percent in the second quarter versus the same period in 2010, but revenues increased just 38 percent in the same time frame.
Susan Grigoleit, accounting manager with the Hauserman Rental Group in Tahoe City, which manages more than 160 properties on the west and north shores of Lake Tahoe, says business is up 30 percent over last summer. The past three years were stagnant for the 45-year-old company.
“It was a real break-even scenario,” Grigoleit says. “Our company has been very productive in the Tahoe area for many years, and we have seen growth every year, but the last three years we were barely breaking even. It wasn’t what we had gotten used to. We definitely felt the change in the economy and people not spending money like they used to.”
In the midst of the recession, Hauserman Rental Group dropped its pricing on rental homes to match its competitors, and Grigoleit says the company gave further discounts to savvy consumers in order to rent properties. However, this season the company is holding firm on most quoted prices. Last-minute and “shoulder-season” bookings – reservations made after the ski season and before summer kicked off – still enjoyed additional discounts.
“We made price adjustments and had no problem doing that the last couple of years,” Grigoleit says. “But we were definitely losing ground, and we decided our rates are still very competitive. Prime time, we are sticking to our rates.”
Chuck Maas, marketing consultant to Lake Tahoe Accommodations in South Lake Tahoe, the largest property management firm at Lake Tahoe with more than 300 properties and four offices, says bookings are up about 15 percent this year over last. Reservations typically lag in late April, May and early June, and in late September, October and part of November. The typical vacation rental is only occupied between 16 and 24 weeks per year, Maas says.
“The market is pretty healthy in Tahoe, and it is gaining gradually; it is not in the doldrums,” he says.
Don Cauley, general manager of Vacation Station, which manages about 100 properties in Incline Village, says summer bookings are up between 5 and 10 percent over last year – but they were very slow in developing. Cauley says many California customers seem reluctant to book big vacations in advance due to the state government’s unsettled budget.
In May, reservations for Vacation Station properties were on a downward trend, but a surge of last-minute bookings gave rise to a more optimistic outlook. Mid-week bookings still remain soft, however, with vacationers preferring three- or four-night weekend stays over full-week vacations to the lake.
“It looks like we bottomed out last year and might see some improvement this year,” Cauley says.
He says his company’s fleet of smaller properties is being reserved much more than the larger rental homes. But Kelly Dietz, owner of Tahoe Luxury Properties, says customers are booking high-end and lower-priced homes at a good clip, while mid-ranged product has lagged.
Business is up about 20 percent this year over 2010 at Tahoe Luxury Properties, which manages more than 150 properties from its Tahoe City offices. Bargain shoppers still enjoy a bit of a break, she says, but not on the highest-priced Lake Tahoe real estate.
Social media also has helped spur bookings, says Grigoleit of the Hauserman Rental Group. The company has seen a rise in booking from foreign customers by using the Web site VRBO – Vacation Rental By Owner – and popular social media sites.
“We are super proactive and aggressive when it comes to marketing, and it has helped us,” Grigoleit says. “We are big fans of VRBO and putting ourselves out there on the Internet. We have a lot of foreign clientele, and we are able to reach people in other countries very easily. It has made it very obvious why our bookings are up; the phone is very obsolete these days.”
Internet marketing also helps property managers because customers can see photos of the properties and make better-informed decisions, Maas notes.