Q3 is largely a continuation of what we have seen all year: some variation in how much, but for the most part nearly every metric is down year over year (YOY). When studying adjusted paid occupancy averages and their YOY changes, the deficits actually don’t seem as grim. However, the largest hit came in ADR’s, which was likely the result of managers and rent-by-owners (RBO’s) holding onto rate for too long forcing massive last minute discounts to boost occupancy. We saw some variation between the markets, but for the most part, each followed a similar trend.

In this report, I go into great detail regarding adjusted paid occupancy averages, ADR (average daily rate) and I introduce a new metric that is helpful in illustrating overall gross revenue changes in our comparison periods, RevPan (revenue per available night). I have documented the July, August and September figures for the Panama City Beach, 30A and Miramar Beach markets we represent in our portfolio, including charts and actual figures.

I have the report behind a “subscriber wall” so I can control its circulation, however I wanted to have it available online to make it easier to share. There is no cost to access the report, but you must put in your email address subscribing to these reports.

In my last report published August 9, the month of August was looking frighteningly behind 2022, particularly for Panama City Beach. However, it found some traction last minute. And while September occupancy averages dipped, the last 3 weeks saw YOY ADR’s to be relatively flat.

Optimistically, I’m seeing very positive movement for 2024 for the Blue Swell portfolio with 72% of our inventory pacing ahead compared to this same point last year. I find this encouraging as the strategies I put into place are working.

I find it important to note that my opinion on why we’re ahead is a direct result of my aggressive revenue strategies for 2024. These include close comparison to comp rates and past revenue performance per property and more relaxed booking restrictions. For 2024, I do not expect demand to improve over 2023. I’m optimistically expecting occupancy and ADR changes for the market to be relatively flat. However, with that expectation, my goal is to attempt to maintain ADR for most, if not let it dip in some instances with the overall focus on increased occupancy, booking window and overall gross revenue.

With that said, because of our pricing platform, I am able to ensure that if pacing is strong and demand does, in fact, improve, I can action quick responses to take full advantage of the opportunities.

As always, below is a lot of data to digest. Please take some time to look it over and bookmark it for future reference.

Table of Contents

Intro to RevPan

Panama City Beach Market Performance

30A/Santa Rosa Beach Market Performance

Miramar Beach Market Performance

Q3 Southeast US Market

This chart comparing all the US markets quarterly performance looks similar to every other quarter this year. From the Q3 performance webinar with KeyData, the chart shows a peak in 2021 and a downward slope for the two following years for all but 2 markets. The presenters highlighted that 2023 was still above 2019 for most markets in average paid occupancy, including our Southeast US market.

The Q3 STR performance stats from the webinar show a continuation of what we’ve seen all year long. Occupancy, ADR (average daily rate) and RevPan (revenue per available night) all continue to be down year over year (YOY). This year, over last, Q3 saw an overall decline in occupancy from 61% (2022) to 55% (2023) in the Southeast market - or a 9.8% decline. As you can see in the chart above, all but one market was down in Q3, with 3 experiencing a decline of 10% or more.

Q3 Revenue per Available Night (RevPan) for the SE market saw a peak in 2021 of $195, dropped 3% to $189 in 2022 and dropped a more hefty 10.5% for this year, to $169.

For Q3 in the SE market, we saw a further compression of the overall booking window, which dropped from 90 days (2022) to 82 days (2023), or a drop of 9%. The average length of stay year over year was mostly flat, from 5.1 (2022) nights to 5.04 (2023).

However, when looking at the booking window in more detail, we saw the percentage of bookings made 60+ days out decrease from 35% (2022) to 32% (2023), and the percentage of bookings made between 30-59 days increase from 28% (2022) to 32% (2023) showing a large shift from one category to another.

An Introduction to RevPan

RevPan, or Revenue per Available Night is an important metric that provides an actual representation of total revenue generated in a given period.

RevPan is calculated by taking the total paid occupancy and multiplying it by the ADR of a given period.

Occupancy x ADR = RevPan

For example, in July of 2023, Panama City Beach average occupancy was 76% with the market average daily rate (ADR) of $317.  Therefore: 76% x $317 = $240.92.  And in order to determine the average amount of revenue each property generated in July, based on this figure, you would simply multiply the RevPan by the total number of nights in the month (31): $240.92 x 31 = $7,468.   Therefore, in Panama City Beach, in the month of July, 2023, the average revenue generated per property was $7,468.  

However, understanding the total average revenue generated per property in a given period is just an exercise in curiosity with the RevPan metric.  

July 2022 RevPan was $288.  And when considering July 2023’s RevPan figure of $240, this comparison represents a loss in average total revenue generated per property in the PCB market of 16.7%.  

Understanding how this metric works, we can calculate that in July 2022, properties in the PCB market generated on average $8,928 for the month, which means on average, PCB lost approximately $1,460 per property for the month YOY.

I find it important to emphasize this is NOT to be confused with ADR.  RevPan is a derivative of ADR and total paid occupancy. 

In the hotel industry, RevPan is actually referred to as RevPar (revenue per available room), however it’s more accurately represented as “night” in our STR use-case scenario.

Q3 Florida Panhandle Market

Panama City Beach Market

Adjusted Paid Occupancy Averages

Looking at the graph above, you can see paid occupancy was down every week but one (week of July 1). Two weeks (8/19 and 8/26) were almost flat, and the rest of the weeks were down on average 11% with larger gaps in September. For those that experienced the excitement of 2021, our 2023 paid occupancy numbers were on average down 27% Q3 from 2021 averages.

• July 2023 occupancy was 75%, down from 77% in 2022 and down from 84% in 2021.

• August 2023 occupancy was 41%, down from 45% in 2022 and down from 64% in 2021.

• September 2023 occupancy was 38%, down from 45% in 2022 and down from 57% in 2021.

Average Daily Rate (ADR)

Typically the highest ADR in July is the week in which the July 4th holiday falls within. Additionally, the second week consistently dips, then it ticks back up for the third week in July. In terms of overall ADR YOY performance deficit, we saw a greater loss in July than we did in August and September. Actually, weeks 2, 3, and 4 of September saw a slight uptick in year over year ADR. However, noting the larger gap in occupancy averages from above with ADR being relatively flat, this indicates fewer properties were willing to lower rate to pick up occupancy during those weeks.

Every week in July was down on average 13.9% with the widest gap being the second week (week of July 8th), down 16%.

• July 2023 ADR was $317, down 13.6% from $367 in 2022, and down from $357 in 2021.

• August 2023 ADR was $196, down 14.4% from $229 in 2022, and down from $236 in 2021.

• September 2023 ADR was $174, down 1.7% from $177 in 2022, and flat with $174 in 2021.

One thing of interest to note is that Q3 ADR total average for the PCB market was actually at its peak in 2022, when considering 2021, 2022 and 2023.

Revenue per Available Night (RevPan)

RevPan brings our occupancy and daily rate averages together to illustrate overall gross revenue performance changes. In layman’s terms - it will show us how much average revenue the market lost (or gained) in a given period, given the occupancy and ADR changes.

When looking July, each week was down on average 17% with the largest gap being the second week (week of July 8th again), which was down 19% ($228, down from $282). For example, if a property generated $50,000 in July of 2022, this would have been a loss of $8,500.

• July 2023 RevPan was $236, down from $284 in 2022 - a 16.9% loss, and down from $299 in 2021.

• August 2023 RevPan was $81, down from $103 in 2022 - a 21.4% loss, and down from $151 in 2021.

• September 2023 RevPan was $67, down from $81 in 2022 - a 17.3% loss and down from $99 in 2021.

Interestingly, while ADR peaked in 2022, occupancy actually peaked in 2021. And this actually illustrates an important point and reason to consider RevPan. A good revenue strategy doesn’t focus solely on ADR but rather a balance of ADR and occupancy. I have taught for years, the highest ADR doesn’t net the highest revenue, rather the CORRECT ADR results in the highest revenue. To generate the most gross revenue, ADR must be balanced to generate the highest overall occupancy. While ADR’s were lower in 2021 than 2022, occupancy was much stronger resulting in significantly more overall revenue.

30A and Santa Rosa Beach Market

Adjusted Paid Occupancy Averages

Comparing the occupancy averages of the 30A market to those of Panama City Beach, the curves are relatively similar. For July, the 30A market experienced slightly higher occupancy than Panama City Beach, although by only 1 point. You can see the same typical dip in the second week of July and watch the numbers fall as we move into August and our feeder market schools go back into session. I will note the 2023 and 2022 curves are a little tighter for the 30A market.

For occupancy, the first week of July was mostly flat. However, weeks 2, 3 and 4 were down on average 7.4% with the largest gap being the second week, which was down 9.9% YOY. August was down less so and the largest YOY gap was the week of September 16, which was down 10%.

• July 2023 occupancy was 76%, down from 81% in 2022 and down from 83% in 2021.

• August 2023 occupancy was 41%, down from 45% in 2022 and down from 63% in 2021.

• September 2023 occupancy was 37%, down from 40% in 2022 and down from 51% in 2021.

Average Daily Rate (ADR)

When looking at ADR deficits weekly for the quarter, the two largest drops were weeks 2 and 3 of July, down 11.7% and 11.6% respectively. July 4th week was down 7.2% and the week of July 22 was down 9%. For August and on, the 30A market was down on average 4.5% with the last three weeks of September relatively flat YOY.

• July 2023 ADR was $682, down 10% from $759 in 2022 and down 1.7% from $694 in 2021.

• August 2023 ADR was $501, down 9.4% from $553 in 2022 and down 2.1% from $512 in 2021.

• September 2023 ADR was $427, down 2.5% from $438 in 2022 and actually up 6.2% from $402 in 2021.

And just as with the Panama City Beach market, on 30A, we saw a huge dip in comparative occupancy averages between 2021 and 2023, yet an increase in ADR. This again indicates fewer willing to drop rate to boost occupancy. And as we’ll see in RevPan performance below, more overall revenue was generated in 2021 in all years indicating lost opportunity this year by those who did not drop rate to boost occupancy.

Revenue per Available Night (RevPan)

RevPan is where occupancy and ADR changes come together to represent total gross revenue. Gross revenue averages can be calculated by taking the RevPan figure and multiplying it by the number of days in the sampled period. For the week of July 8th, the week with the largest YOY decline, properties on 30A generated on average $3,423, which is down from $4,291, or a loss of 20.2% in revenue YOY. And as you can imagine from studying the occupancy and ADR graph, that second week in July took the largest hit. However, the 2023 and 2022 curves stayed pretty tight through late August and September, as it did with the occupancy averages.

• July 2023 RevPan was $521, down from $618 in 2022 - a 15.6% loss, and down 9.5% from $576 in 2021.

• August 2023 RevPan was $206, down from $249 in 2022 - a 17.2% loss, and down 36% from $322 in 2021.

• September 2023 RevPan was $160, down from $173 in 2022 - a 7.5% loss, and down 22% from $205 in 2021.

Again we see that in each month of Q3 for the 30A market, RevPan peaked in 2021 confirming what we all felt - we made more money in this period in 2021 than 2022 or 2023.

Miramar Beach Market

Adjusted Paid Occupancy Averages

The Miramar Beach market took the smallest hit in overall occupancy average decline for the quarter: 5% down on average, vs 6.3% down for 30A and 8.2% down for PCB when compared to 2022. The curve is similar to the other markets, however averages were slightly up weeks 3 and 4 of August. For the month of September, Miramar more closely resembled Panama City Beach in terms of how much it was down from 2022 - both markets saw a decline of 16% for the month. However, when considering the whole quarter, Miramar had the highest overall occupancy for the quarter, at 55.5% vs 51.8% for 30A and 51.6% for PCB.

• July 2023 occupancy was 76%, down from 80% in 2022 and down from 83% in 2021.

• August 2023 occupancy was 48%, down from 51% in 2022 and down from 68% in 2021.

• September 2023 occupancy was 42%, down from 46% in 2022 and down from 56% in 2021.

Occupancy averages were much higher rolling into fall of 2021, which as we’ll see when looking at RevPan, resulted in higher overall revenue.

Average Daily Rate (ADR)

For Q3, Miramar fell in the middle in terms of overall ADR for the quarter, averaging $341, vs 30A’s average of $530 and PCB’s $227. However, Miramar actually took the largest hit in overall ADR decline compared to 2022, falling on average 10.8% for the quarter with the largest decline of 16.3% in the third week in August. When considering the entire quarter, Miramar had the largest overall decline in ADR when compared to 30A and PCB as well.

• July 2023 ADR was $469, down 12.3% from $535 in 2022 and down 4.3% from $490 in 2021.

• August 2023 ADR was $305, down from $368 in 2022 and down 12.1% from $347 in 2021.

• September 2023 ADR was $259, down from $275 in 2022 and actually up 2.4% from $253 in 2021.

ADR’s overall peaked in 2022. However, with higher occupancy averages for the quarter of 2021, we’ll see how that positively affected RevPan below.

Revenue per Available Night (RevPan)

As you can see from the chart above, the decline trend follows the same pattern as the graph for ADR and Occupancy averages. In terms of overall decline, Miramar lost slightly less overall revenue than the PCB market, but more than 30a. When looking at July RevPan, the market lost on average $2,154 per property for the month, $1,047 for August and $555 for September, when compared to 2022 - totaling $3,757 for the quarter.

• July 2023 RevPan was $356, down from $426 in 2022 - a 16.4% loss, and down 12.9% from $409 in 2021.

• August 2023 RevPan was $147, down from $188 in 2022 - a 21.8% loss, and down 37% from $234 in 2021.

• September 2023 RevPan was $108, down from $125 in 2022 - a 13.6% loss, and down 23.9% from $142 in 2021.

While the overall quarterly RevPan average was highest in 2021, you can see monthly that RevPan peaked for July in 2022. However, when looking at the significantly higher occupancy averages of 2021, even though ADR’s weren’t as high as 2022, overall revenue was better in 2021.