Orlando Hotel Market Q2 2024: Pricing trends, booking patterns, and short-term rental growth

Pricing in Orlando converges with overall US pricing in Q2 2024

Coming out of COVID, actualized pricing⁽¹⁾ for the overall US was higher than that of Orlando, given the Orlando market’s heavy reliance on group and leisure travel. From January 2021 through January 2022, the US achieved a pricing premium over Orlando, which gradually diminished until Orlando pricing eclipsed overall US pricing in February 2022. The premium was never significant (below 7% each month) but it was consistent.

One of the most prominent trends we saw in 2023 was softening in hotel pricing. For Orlando, this trend began in April 2023, with the first month-to-month decrease in Trailing 12 Month (TTM) pricing. This downward pricing trend persisted until the Orlando TTM pricing curve synced up with that of the overall US in April 2024, and pricing has since been nearly identical.

Pricing for the overall US continues to gradually decline

The US has been experiencing a downward sloping TTM price curve since May 2023. That said, it is worth noting that in comparing US TTM pricing on a month-to-month basis, declines appear to be leveling off – TTM pricing for February through July 2024 were all within 90 cents of each other (with this metric similarly true for Orlando, albeit starting from April 2024), with the month-to-month declines in TTM pricing largely shrinking in magnitude with each passing month.

In comparing price from H1 2023 to H1 2024, Orlando’s declines appear commensurate with other major Florida cities

Looking at the YoY pricing change from H1 2023 to H1 2024, Miami was the only major Florida city examined that experienced YoY pricing growth. Miami’s growth was modest - approximately 2.0% - but considering the magnitude of the YoY declines of the other Florida markets examined, Miami’s positive price appreciation is noteworthy. Orlando, Fort Lauderdale, Jacksonville, Tallahassee and Tampa experienced, on average, YoY declines of 6.2% in H1 pricing with Orlando’s 5.3% YoY decline coming in just below that average.

Hoteliers continue trying to drive pricing in H2 2024

Through the midpoint of 2024, average weekly price in Orlando consistently actualized short of the equivalent week from 2023 (red shaded areas), aside from a few instances when 2024 exceeded 2023 pricing. The trend shifted slightly starting the week of July 22, 2024, with 3 consecutive weeks of marginal 2024 rate premiums over the 2023 equivalent week, with an average premium of 2.2% over that time period. Despite the shortcomings in pricing that characterized much of H1 2024, Orlando hoteliers look to capitalize on the trend that started the week of July 22nd, as advertised pricing for much of the balance of 2024 remains above actualized pricing from 2023 (green shaded areas).

Pricing starts at a (lower) premium in 2Q24

When examining the price evolution for Orlando hotel stays in Q2 2024, the data shows that 120 days ahead of the stay date, pricing was, on average, at an approximate 8.3% premium relative to the final price (i.e. the lowest rate bookable for a given hotel on the stay date itself). While this is indeed a significant premium, it’s worth noting that comparatively speaking, the premium was a touch smaller than the 120-day lead time premium from Q2 2023, when pricing was at an approximate 9.1% premium, on average, relative to final price. The delta between the Q2 2023 and Q2 2024 lead time pricing curves remained fairly consistent - typically between 1.0 and 2.5 percentage points - and from about 5 days of lead time onward, the price premium garnered in Q2 2023 over Q2 2024 was for the most part nominal.

Advertised hotel pricing for the next 90 days has largely decreased

Looking back retroactively to May 6, 2024, advertised hotel prices for the latter portion of 2024 were notably higher in comparison to where those prices stand currently. Consistent with the resistance that the broader industry has experienced to driving price upward since early 2023, forward-looking destination-wide advertised pricing in Orlando has trended downward relative to where it was back in May. Over the dates in question (August 15th through November 12th), advertised price was an average of 2.3% lower as of August 5th in comparison to price levels for the same dates as of May 6th.

Length of stay search data by lead time

Lighthouse’s search data can be used to create a lead time demand outlook by length of stay (LOS), which can be used to identify booking trends for LOS based on lead time ahead of arrival date. The 60-day lead time outlook for Orlando below, which is an aggregate of all Lighthouse’s 2023 search data, shows that at day 21, three weeks ahead of arrival, Orlando experiences an uptick in LOS 4-7 searches, and then on day 14, two weeks ahead of the stay date, there is a marked jump in the ratio of LOS 1 bookings. It’s also worth noting that the ratio of searches for 8-14 night stays in Orlando, despite being the smallest bucket among the various LOS groupings, remained a relatively substantial factor over the majority of the 60-day lead time period analyzed.

Short-term rental supply in Orlando is significantly below the January 2020 peak

Though it is worth noting that, after reaching a supply nadir of approximately 40,500 units in June 2021, supply has been steadily and consistently increasing ever since, and as of June 2024, total short-term rental supply in Orlando was approximately 52,900 units. While this represents approximately 58% of the total supply peak of 90,500 from January 2020, it also represents nearly a 31% increase in supply since the aforementioned supply nadir in June 2021. Looking at the supply of studio + 1 bedroom short-term rental units in Orlando (i.e. those most comparable to a traditional hotel room), unit count has been relatively stable over the time period examined. That said, it’s worth noting that studio + 1 bedroom supply has been increasing slowly but steadily since April 2022, and as of June 2024, the studio + 1 bedroom unit supply of approximately 8,700 units represented approximately 16% of the total pool of short-term rental units.

From January '20 through June '24, short-term rental ADR in Orlando has grown approximately 63% on a TTM basis

Despite the significant price appreciation over that time frame, perhaps similarly noteworthy is that the trend of TTM price appreciation may have hit is peak, as TTM pricing⁽²⁾ decreased approximately 2% from March through June 2024. While it’s certainly possible that this downward trend is short lived, it is worth noting that over the same time period of March through June 2024, the aggregation of studio + 1 bedroom short-term rental units experienced TTM price appreciation of nearly 6%. It’s also worth mentioning that from January 2020 through June 2024, the aggregation of studio + 1 bedroom grew nearly 59%, fairly comparable to the 63% price growth experienced by the aggregation of all units over that time period.

Occupancy for studio + 1 bedroom short-term rental units in Orlando consistently below occupancy for all units in aggregate

From January 2019 through June 2024, the occupancy of all units in aggregate achieved an average monthly occupancy premium of nearly 7 percentage points above the aggregation of studio + 1 bedroom units⁽²⁾. Given Orlando’s heavy emphasis on group travel, as well as leisure travel catering to families with children, this occupancy premium for higher capacity units is supportive of Orlando’s demand mix. Since 2019, there were only 4 months where the studio + 1 BR aggregation outperformed all units in terms of occupancy, with two of those occurrences happening in the month of September. September, in fact, is the only month since 2019 in which the average all units occupancy premium is less than 1 percentage point, with an average September occupancy premium of 0.4 percentage points across all Septembers since 2019.

⁽¹⁾Actualized price for a given time period represents the average of the lowest bookable rates for a standard hotel room for all hotels within Lighthouse’s data set within the given geography, as of 10 days before each stay date within the time period in question

⁽²⁾Lighthouse’s short-term rental performance data is comprised of Airbnb data