Would significantly higher rental rates in high season keep renting visitors away?
IMO that is just one consideration...there are many more:
Turnover in properties over the last couple years have many present owners who've bought in at top-o-the-market prices; so whereas the person who purchased a condo/house in 1999 at a much, much lower price may have been able to show a profit, the present owner would never be able to produce profit unless they increased rental rates
significantly.
....Ditto on increasing costs of taxes, HOA fees, and especially insurance.
The number of subdivisions/condos for vacation homes have exploded in this area in the last couple of years (to satisfy the demand of speculators buying for quick flips). These additional vacation properties, which flippers now find they can not sell, are added competition for rentals where once there was none.
The economy is tightening up with major layoffs in manufacturing and housing, increasing gas prices, and inflation now showing up in food and living expenses. Now that the housing boom is subsiding across the nation, and folks are no longer able to use their homes as ATMs to draw discretionary spending dollars, vacationers may be more apt to stick to a tighter budget (if they vacation at all). Many may choose a lower cost alternative to a beach vacation than to take no beach vacation at all...these folks may opt for a condo at PCB rather than SoWal if the price is right, or cause them to delay making plans and using their leverage to snatch a "last minute bargain." This last tactic also gives them some peace of mind that they won't end up "wasting" their vacation deposit should a passing nearby tropical storm or hurricane make for a lousy week at the beach.
There are always the folks with unlimited funds that will vacation here no matter what...some of them already bought their own places during the boom, so they're out; others will stay in the high-cost homes and resorts; and many will be repeat visitors who've got that favorite place they return to time and again. The mid-priced, non-beachfront properties will have work much harder to obtain a competitive edge.
Competition and costs have exploded over the last 2-3 years, the internet makes comparing prices and locations much easier, and the tightening economy is being felt by the middle class...these three things are the major considerations you've gotta keep in mind when selecting a price-point for your vacation rental rates this year.
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