This winter is likely to be challenging for owners of holiday lets. The combination of rising utility bills and interest rates, combined with pressure on the budgets of potential guests, would be difficult at any time. Add in the huge increase in the number of holiday lets as a result of lockdown purchases (some estimates say a 30% increase since 2019) and it could feel like a perfect storm for professional holiday lettings owners.
Our view is that the challenges this winter presents will cause many owners of second homes to exit the holiday let market, particularly those who bought in the last two years with unrealistic long-term expectations. The likely introduction of a mandatory registration scheme is also likely to act as a deterrent to second home owners who make a bit of money from occasional holiday letting. As the number of holiday lets reverts back closer to pre-Covid levels, this should provide increased pricing power for those owners who remain committed to the market.
Another cause for long term optimism is that the last two years have introduced new people to the idea of a staycation in the UK, particularly in holiday lets that can compete with hotels on quality, but are typically better value. Whilst many people headed back abroad again in 2022, our booking numbers remained excellent, giving confidence that cottage holidays in the UK are likely to remain attractive to many people.
Holiday Lettings Owners Advice for Winter
The key to navigating the winter holiday accommodation market, will be solving the conundrum that many owners need higher prices to cover increased costs, but many guests need lower prices because they have less disposable income. Adopting a simple, inflexible pricing strategy could result in either empty calendars, or loss-making bookings. For owners who want to maximise returns, this equation needs to be solved intelligently, with careful analysis of the market and the use of dynamic pricing strategies, to optimise the balance of booking numbers and values.
In conclusion, our holiday home letting agency offers unique pricing expertise that can help you to make the most of a challenging winter, and those holiday lettings owners who stay the course through this tough time should see their financial returns improve over the course of the next year, as some owners drop out of what is still a fundamentally strong market.
Written by Mat Faraday, StayCotswold Commercial Director
