European STR occupancy shifts against supply-demand inequality, geopolitical tensions

Europe: Short-term rental supply across Europe continued to outpace demand in February, contributing to a decline in occupancy levels, according to new data from AirDNA.

The report shows available listings increased by 3.3 per cent year on year to 3.3 million, while demand nights fell by 4.5 per cent to 24.9 million. As a result, occupancy declined to 57 per cent, down 3.4 per cent compared with the same period last year.

Average daily rates (ADR) rose slightly by 0.4 per cent, marking the first increase since July 2025, while revenue per available rental night (RevPAR) declined by 3.1 per cent.

AirDNA said the data reflects a widening imbalance between supply and demand, with travel increasingly concentrated between May and September, leading to softer performance outside peak months.

Geopolitical tensions are also beginning to affect travel patterns. The report highlights rising cancellation rates linked to the ongoing conflict involving Iran, with southern European markets among the most impacted.

Cancellation rates increased by 183 per cent in Cyprus and 27 per cent in Turkey, while significantly higher spikes were recorded across the Middle East, including increases of more than 500 per cent in countries such as the United Arab Emirates, Jordan and Qatar.

Despite weaker demand, supply continued to grow across most major European markets. Nordic countries recorded some of the strongest increases, with listings rising by 15.8 per cent in Denmark and 13.5 per cent in Finland. The Czech Republic and Italy also saw double-digit growth.

However, rising supply continued to weigh on performance. Occupancy declined in 19 of Europe’s 20 largest short-term rental markets, with Hungary the only country to record an increase.

AirDNA said the market is entering a period of stabilisation following rapid post-pandemic growth, with demand normalising and becoming more seasonal.

Highlights

• European short-term rental supply grew 3.3 per cent year on year to 3.3 million listings, while demand declined 4.5 per cent, pushing occupancy down to 57 per cent.
• ADR increased by 0.4 per cent, marking the first rise since July 2025, while RevPAR fell by 3.1 per cent.
• Cancellation rates rose in southern Europe, including a 183 per cent increase in Cyprus and 27 per cent in Turkey, linked to geopolitical tensions.
• Supply growth was strongest in Nordic markets, with Denmark and Finland seeing double-digit increases.
• Occupancy declined in 19 of Europe’s 20 largest markets as supply continued to outpace demand.