Smokies State of the Union

[Collin Hays]

Regardless of what the talking heads are saying, the U.S. is in a recession.  I haven't seen a May this soft since the financial crisis. The calendars for our properties are filling up decently, but it is taking daily work on rates to get that done. I have done a cursory look at the May calendars of many VRBO and Airbnb listings, and it isn't uncommon to see NO bookings for May whatsoever.  There are luxury cabins sitting out there at $89 per night, with no bookings.  

I've lived through a couple of these before.  If you are self-managing, it is imperative that you are staying on top of rates; your property has to be market competitive to get bookings. And if your property manager is asleep at the wheel, fire them and do it yourself.  I took a look at one PM that is more Cosby-centric.  35 properties, and only 167 nights booked for all 35 for the month of May, or about 5 nights average per property.

That's a disgrace.  

[Chris Watson]

Quote from @Todd Goedeke:

@Chris Watson it’s not a race to the bottom if competitors have a purchase price that is much lower or lower ConC goals.

I contend it is fear and not goals dictating the race to the bottom. In the Smokies the people I know (including a few of my own properties) who had a lower purchase price have "price discipline" and are keeping rates where they "should be" and adjust for demand.  Fear produces fire sale prices and these are fire sale prices.  The hotels in town are getting more per night than 3 and 4 bedroom pool homes.
Now the debate of where rates "should be" would be based on the quality of product each person/owner offers.  I personally challenge owners to look at what the Holiday Inn in Pigeon Forge and Gatlinburg are charging and they might see how much money they are leaving on the table.   For those who have been in the market for 5 yrs (preCovid) know post Easter till Mother's Day it is slow outside of rodrun. Also they know due to a very early Easter this year the spring break season was cut in half. That is the data to make pricing decisions off of. Next year Easter is April 20th and we will see a longer spread out Spring break season. Fear, and not data/intel/goals, are driving the race to the bottom.l and I expect those leading the race will be the first to sell.