In this edition, we bring you the latest insights and trends from the Apollo Bay holiday rental market, with a special focus on how our properties under Otway Retreats are performing compared to the broader market. Our aim is to provide you with actionable data to help optimize your investment in this ever-evolving landscape. It is a difficult market at the moment, and everyone is feeling the pinch of increasing interest rates, the increased cost of living pressures. Otway Retreats are committed to continuing to lead the local market, and to work with out clients, to ensure we can maximise the potential of their home and provide a positive experience to guests who choose to stay with us.
1. Market Overview
Properties on the Market: Currently, there are 984 properties available in the Apollo Bay Region, marking a modest increase of 1% from last year. This slight growth indicates a stable market environment over the past 12 months.
Trends to Long Term Rental: We are seeing many more properties transition from holiday rental to the long term rental market in Apollo Bay. This is a result in net returns reducing due to economic factors, and property owners wanting stable income that is consistent and predictable in a market where interest rates are high.
Competition: Competition in the short-term rental market is fierce, with an oversupply of vacation properties. Rentals that lack distinctive styling, high-quality presentation, or unique features struggle to attract bookings during off-peak seasons. Properties that stand out—such as those with saunas, spas, rural settings, stunning ocean views, or exceptional interior design—continue to perform well and secure reservations year-round
2. Revenue Insights
Regional Revenue Growth: We're observing a significant uptick in regional revenue along the Great Ocean Road, which has increased by 20% overall. This growth is a testament to the enduring appeal of Apollo Bay and the Great Ocean Road as a prime holiday destination offering better value than places like the Mornington Peninsula or Daylesford in an economy seeking value.
3. Pricing Dynamics
Adjustment in Home Pricing: Despite the general revenue growth, the average pricing per home has decreased by 33% across the marketplace. This reflects a competitive market where price adjustments are key to attracting bookings and shows that there is an imbalance of supply vs demand, outside of peak seasons.
Spotlight on Otway Retreats
Leading the Market: Otway Retreats continues to outperform, boasting the highest overall review rate among all professional management companies in Apollo Bay.
Revenue and Bookings Surge: Compared to last year, Otway Retreats has seen an 34% increase in revenue and a 68% rise in bookings. However, the price per booking has adjusted downward by 24%, aligning with broader market trends (33% decrease in the rest of the market). This indicates a correction in the market post Covid, which is difficult given the interest rate pressures for many investors at the current time.
Promotional Strategies to Consider
Value-Driven Promotions: In response to guest preferences for value, promotions like early bird discounts, last minute discounts, and long stay discounts have proven effective.
Engaging with Algorithms: Our active engagement with search and booking algorithms ensures that our properties maintain high visibility and performance against the competition. Airbnb tightly controls the holiday rental market so actively engaging with algorithms and understanding their parameters and targets is critical in getting homes to perform well in this current market.
Economic and Market Trends
Challenges in the Current Market: The broader economic conditions, including fluctuating interest rates, have put downward pressure on pricing. However, our focus on maintaining consistent bookings has helped offset potential declines in per-booking revenue over the year.
Despite the challenges in the holiday rental market, Otway Retreats is experiencing positive internal results and takes pride in the successes we've achieved for our clients. While the market is indeed tough and expectations are evolving, these transitions provide opportunities for high-quality homes to excel. We remain committed to adapting and thriving, ensuring that our properties stand out and continue to perform well.
