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Report on 2002 Season

FOR IMMEDIATE RELEASE
Contact: Elizabeth Weedon
Phone: (888) 281-8660
E-mail: elizabeth@weneedavacation.com

Wellesley, January 25, 2002--Though the New England weather forecast for summer 2002 is as elusive as ever, the economic forecast looks bright indeed. While economists are watchful and wary in the wake of September 11, the soft economy does not appear to be having an impact on the number of vacationers who plan to visit Cape Cod, Martha's Vineyard and Nantucket next summer.

Our website, www.weneedavacation.com, advertises over 650 vacation rental homes on Cape Cod, Martha's Vineyard and Nantucket. Our clients are homeowners and realtors. Vacationers can come to our site, search for suitable homes, and then book directly with our clients.

Every year, we have seen a huge surge in activity right after the December holidays. But never have we been so concerned: what effect would a soft economy have on the economics of Massachusetts's tourism?

Using state-of-the-art relational database technology, we have at our fingertips a host of information. Our annual client growth rate of over 60% demands that we measure how effective we are in bringing them vacationer traffic. Thus, we want to know our traffic and also the results it brings our clients. We can easily analyze our clients' growth and pricing changes by geographic area, home size, and home amenities. We can measure bookings patterns from year to year by geographic area and price range, in order to determine how well we are doing thus far vs. the same time last year.

Our main measure is what we call "property views," or the number of times a property web page is seen. We have had over 3 million property views since we began in December 1997 and had 1.3 million in 2001 alone. We expect over one half million property views in Q1 of 2002, or over 700 per active property.

But we also need to measure our clients' moods and results. Renewal rate is key: we offer several length plans, and track renewals carefully. Of those who have been with us for a year or more, over 90% renew. This tells us we are delivering a good service.

Pricing of homes year-to-year best indicates the "consumer confidence" piece. If clients raise prices, they are optimistic and visa versa. We focus on the 9 key summer weeks because they represent 90% of our traffic and are the bread and butter of any rental homeowner's economics. From 2000 to 2001, prices for homes on our site during both summers increased a robust 8.0%, or 3 times the consumer price index. Clearly, homeowners felt they were in a seller's market. Nantucket homes increased the most, or a whopping 15.8%, and interestingly, Martha's Vineyard homes the least at a still healthy 4.2%. On the Cape, increases on the OuterCape were highest and on UpperCape the lowest.

So, what is the impact of September 11 and of a sharp economic slowdown? In terms of pricing, average prices are still increasing, but only 4.7% from summer 2001 to summer 2002. Interestingly, the two areas that grew the most from 2000 to 2001, Nantucket and the OuterCape, slowed way down, and increased only .1% and 1.4% respectively. Martha's Vineyard went from 4.2% to 3.7%, virtually a stand-still. The fast growers in 2001 are clearly nervous, but the other areas' patterns are only slightly lower. For example, the UpperCape went from 5.7% to 5.6%, or no meaningful change across the 30 homes measured. Our Nantucket homes are the most expensive at over $2,944 on average, whereas UpperCape homes are lowest at $1,837.

So, from the homeowner's point of view, they are a bit more cautious after a raucous couple of years in 1999 through 2001 when prices were soaring. But they are still quite confident; only an insignificant 3% felt a need to lower prices going into 2002 (vs. 2% in 2001).

What about the vacationers and their tastes? Are they still coming? What are they willing to pay? Are they writing deposit checks as quickly as last year?

In terms of overall traffic (as measured in "Property Views" as explained above), it's up 12% YTD vs. up 35% last year. We think some of last year's surge, however, is attributable to our site becoming more visible as opposed to a measure of vacationer enthusiasm. From 2001 to this year, we think it's more representative of market trends.

Bookings are the ultimate measure because they indicate actual business transactions. Our unique searchable calendar system requires our clients to keep their availability current by setting weekly prices and indicating when a home is booked. Frankly, some do better than others at this, so the data we quote has to be filtered through the lens of the natural delays in their updating of their web page calendars. From year to year, though, we assume equal delays, so the comparisons are legitimate. IE, statistics for both years understate the actual bookings, but equally. Interestingly, we expected a substantial slowdown in the fall of 2001 in activity due to September 11. But bookings actually increased a substantial 63% during November and December. (We do not have bookings data before November 2000.) January so far has been up only 6% over last year.

What are people willing to pay this year vs. last? While bookings are up, are vacationers more conservative due to the economic climate? Are their spending patterns for vacation rentals a potential indicator of overall economic potential for next summer? Fortunately, the news from our data is very encouraging. Bookings data indicate that the average price booked a year ago at this time was $1,938 per summer week; this year it is $2,267 for an impressive increase of 17%. 20% of the bookings this year are for homes priced at more than $4,000 a week vs. only 14% last year.

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About WeNeedaVacation.com: Since 1997, WeNeedaVacation.com has been providing an efficient and inexpensive way of matching vacationers and vacation rental homeowners. The website lists more than 4,000 properties on Cape Cod, Martha's Vineyard, and Nantucket. The WeNeedaVacation.com Vacation Planner also offers extensive information to the 175,000+ vacationers who use our site yearly, including information about beaches, events, dining, activities, and shopping. Our amazing staff collectively has over 100 years of experience as Cape & Islands vacation rental homeowners. We love the Cape and Islands, work hard to promote this special place, and proudly belong to 17 local Chambers of Commerce.

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For more information:

Email: info@weneedavacation.com

Phone: (888) 281-8660