The struggling U.S. economy and a strong euro are pushing summer rental bookings ahead of a strong 2007 season.

While home rentals are even or slightly ahead of last year, hotels report increases of up to 15 or 20 per cent more than last year.

Soaring domestic fuel prices and airfares, along with a favorable foreign currency exchange rate, are making Island vacations desirable to Americans within a one-day drive of the Island and to Europeans buoyed by the exchange rate on their currency, Vineyard hoteliers and rental agencies report.

The struggling economy also may create a larger last-minute push than usual, hotels and real estate agents say.

Visitors will find rental rates for houses and hotel room prices virtually unchanged from last year. “No one is raising rates much, if at all,” said Nancy Gardella, executive director of the Martha’s Vineyard Chamber of Commerce.

“It’s been an interesting season so far,” said Sharon Purdy Smith, owner of Sandpiper Rentals. “Dollar volume is up maybe four per cent, and bookings by one or two per cent, so it’s clear that high end properties are strong.”

“We don’t take credit cards and we’re thinking the pinched economy will bring last-minute renters who don’t have money to spend in advance,” she said. “We thought the season would be strong because when home sales are down, rentals are up, based on history.”

Sandcastle Realty in Edgartown is running a little above last year, the agency’s best ever year. “We saw a slowdown in early April but rentals have bounced back,” owner Anne Floyd said.

At least one real estate office plans to increase its share of the rental market. Jean Kelleher, owner of Kelleher Real Estate Services in West Tisbury, noted that her office already enjoys a strong base of renters who have returned for 10 or 15 years.

“House rentals are about 10 per cent of our business. We have plans to grow it. There is lots of interest from Europe and the Asian market is beginning to open up,” Ms. Kelleher said.

Hotels are seeing double-digit booking increases. Bookings to date at the Lambert’s Cove Inn are 115 per cent above last year. “This is the best advance booking in the two years we’ve been here,” general manager Andrew Roth said.

While usually conservative, Jim Carter, owner of the 34-room Clarion Inn in Edgartown, says, “I feel strongly that we’re going to have a good season.”

Mr. Carter sees the growth in Vineyard construction as a boon for his business. “We get a lot of contractors and vendors, and between the hospital, the YMCA plans and the bridge projects, construction is up on the Island,” he said.

Steamship Authority bookings “look good, considering the times we’re living in,” general manager Wayne Lamson said. “We are right on par with last year through the end of April, and July and August are tracking the same way.

Indeed, Mr. Lamson reported that reservations from mid-May to mid-October are even with 2007.

Thad Hyland, general manager of the renovated Harbor View Hotel and Resort in Edgartown, said, “We’re looking at a 15 to 20 per cent increase so far.”

Even more business may be coming the way of the Harbor View. “There tend to be later bookings in a tough economy,” Mr. Hyland said. “People wait.”

Like most service businesses, Mr. Hyland has been scrambling to find help. “We count on H2B visa employees and the visa cutbacks haven’t helped, but many of our staff were able to get visa extensions and will return to us from Florida and Colorado,” he said.

The Martha’s Vineyard Commission believes there are about 2,000 hotel rooms on the Island, down 10 per cent over the past five years.