Bookings for Cape Fear vacation homes rise, but sticker shock prices are prompting changes
As more tourists continue to visit Topsail Island to enjoy the beach and relaxation, homeowners like Renee Matusic are providing them a place a place to stay, with views of ocean waves crashing against the shore.
For homeowners like Matusic, who lives in West Virginia, the upkeep is expensive. One bill is $15,000 for flood insurance. So, while being seven hours away, she wants to leave her family home investment in good hands.
"I wouldn't say anybody who owns property there is a zillionaire," she said. "We're basically just hoping at some point to pay these monsters off. And then, we might make some money on them. But in the meantime, we're still paying our mortgages and expenses."
She is relying on Vacasa to manage the property. The Portland, Oregon-based business is making footprints in the Topsail region and the island shared by towns in Pender and Onslow counties. It acquired vacation rentals from Treasure Realty, a real estate business with offices in Surf City and Sneads Ferry. It's known as the top full-service vacation rental management company in North America. Vacasa manages more than 35,000 homes in 35 U.S. states, Canada, Mexico, Belize, and Costa Rica. More than 3 million guests check in each year.
"We're really happy with them," she said. "I have a great management team, who literally, I feel go above and beyond for our house." Matusic said about working with Vacasa last year after they purchased the TurnKey Vacation Rentals. "I've had success with keeping the house booked."
But some people who enjoyed Topsail Island last summer are questioning the higher costs coming with the change on social media posts. A couple of them include fees for cleaning and booking. With rising costs in the economy, many professionals said it's something that comes with the territory.
The rising costs also rival the uptick in rental properties available throughout Brunswick, New Hanover and Pender counties, which is meeting an increased demand that accelerated in 2020 due to the COVID-19 pandemic.
"I feel bad for my management team because I feel like they're getting raked over the coals," Matusic said. "A lot of people on these pages are not owners. They're people who want to rent and they're angry because the prices went up. Well, guess what? Have you been to the grocery store? Everything has gone up. Gas has gone up."
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Vacasa charges her close to 20% and makes renters pay additional charges. Matusic can't speak for other homeowners, but the overall cost didn't go up much. According to a listing, the cost for a house in North Topsail Beach is more than $500 a night. She added booking fees and state taxes are too high, but it's about the same of other rental companies. For a week in June, the charge for booking is close to $800, which goes towards offsetting costs for marketing and online listings.
The concept of dynamic pricing with businesses setting prices based on demand is another factor, especially with people booking early. But Matusic stressed that this doesn't apply to everything.
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"They think of the airlines," she said. "If you buy a last-minute ticket, it's three times what it would be if you booked it four months in advance. Dynamic pricing with houses is the polar opposite."
A $6,000 weekly rate for a peak time in the summer may drop to $4,000 in the spring, according to Matusic's experiences and research.
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"They're trying ultimately to make the homeowner the most money, and the company the most money," he said.
When it comes to quality, Matusic referred the old saying "You get what you pay for."
"You want a nice experience," she said. "And guess what, I want a management company who expects that, so, they're going to charge a little bit more. I'm telling people on social media, if they don't like it, go to Myrtle Beach because you're going to get a third of what you're going to pay for my five-bedroom ocean front house."
Rate changes
Dara Cook, Vacasa's general manager for Topsail Island, said guest fees for a property depend on the amenities and size of a vacation rental and are displayed prior to a guest confirming their reservation. One example was properties with hot tubs having fees that homes without one to account for the maintenance and upkeep between guest use.
"As a full-service property management company, Vacasa handles all the operations and directly knows the labor and costs associated with home care," Cook stated.
Regarding rates, Cook added that one of the many ways Vacasa helps to optimize rental income for our homeowners is through our dynamic pricing technology, which tailors nightly rates based on demand.
"With this strategy, we can gauge when peak pricing is warranted — say, for a holiday or popular summer weekend — and when to adjust for softening demand in order to keep the bookings coming," Cook said.
When Vacasa assumed management of Treasure Realty's vacation rental division, Cook said a majority of the employees and local teams have been busy welcoming both new and returning guests to Topsail.
"While we understand there may be long-standing guests of Treasure Realty who are adjusting to a dynamic pricing model or higher costs of travel in general (airfare, gas, etc.) over the past year, people continue to book their beach trips here and we remain dedicated to delivering an exceptional, valuable guest experience for everyone," Cook stated.
A growing industry
According to AirDNA, the supply of short-term rentals in Brunswick, New Hanover and Pender counties are increasing. According to data, the total available listings increased from 6,506 in September 2019 to 8,974 for September this year - a 38% increase.
Madeleine Parkin, AirDNA public relations specialist, said many users of short-term rentals chose them over hotels and motel during the pandemic since they were perceived as safer, offering a private space and more amenities while most hotel amenities were closed, offering services such as a buffet breakfast, swimming pool, bar, and more.
"In some locations, particularly coastal, mountain or lake destinations, and smaller cities or rural areas, short-term rentals are a good option where there is little competition from hotels, which tend to be more prevalent in urban areas," Parkin stated.
In two years, the highest percentagewise was in Pender, which had an 102% increase (97 available listings last month); followed by New Hanover at 42% (4,168); and Brunswick at 34% (4,709). It was noted by AirDNA that an available unit is defined as any property with at least one day booked or available during the months. Naturally, changes happen between high season and low season when owners prefer to use their own property.
"Demand (booked nights) is also up across all three counties, while average rates are up in New Hanover and Brunswick, but down in Pender County, where it looks like rates were already high before the pandemic, and dropped off somewhat during, perhaps due to lower demand," Parkin stated "However, they are picking up again this year as inflation hits."
Tourism officials are seeing increases firsthand.
Connie Nelson, communications director for Wilmington and Beaches Convention & Visitors Bureau, reported that five-year period gross accommodation sales for vacation rental increased by 297% because of more inventory from rental agencies, as well as AirBnB and VRBO; reporting of rental and room occupancy tax; and lodging rates.
"During COVID, there has been increased demand for vacation rentals," she said. "It has been an asset for our destination to be able to offer vacation rentals as an option for travelers who were seeking this type of lodging."
Tammy Proctor, tourism director for Pender County, added that COVID brought an influx of people who wanted to rent homes where they controlled contact with those outside the family circle.
"They wanted homes with internet where they could work, and the children could attend school virtually and then have the beach as their backyard for outdoor recreation," Proctor said. "What is consistent and unchanged is the generational visitors we see – grandparents, children, and grandchildren – enjoying a vacation together in a beach rental."
In Brunswick, Mitzi York, executive director of the county's tourism development authority, said vacation rentals has always been the largest segment of accommodations. In recent years, it's changed with more people booking online instead of going through local property owners.
"People like to have their privacy," she said while talking about the advantages. For a week, you own that home."
But for visitors returning, they will probably have to pay a little more than they used to, especially for things such as cleaning fees.
"We have seen some comments in the press and on social media where guests have been shocked by high cleaning fees, but on the whole cleaning fees in the U.S have only risen 8.9% year-over-year, despite obvious increases in labor costs and general inflation affecting the cleaning staff's bottom line," Parkin stated about the situation. "The highest growth in cleaning fees has been in properties with five or more bedrooms (11.7% from last year), which take a lot more work to clean, followed by one bedrooms and studios (11%), many of which did not charge a cleaning fee previously."
For Matusic on Topsail Island, it's close to $500. Prices and breakdowns are different for rental companies, which may group service and insurance under one line item.
"If you're on social media, these people who clean houses for Vacasa go 'Wow, I'm not getting $470 to clean this house, so clearly they're ripping us off,'" she said. "But that's not the case. I think there's a lot of misunderstanding out there."
Reporter Chase Jordan can be reached at cjjordan@gannett.com.
This article originally appeared on Wilmington StarNews: Vacation home rentals rise in Wilmington area despite higher service fees
