US: The latest report from AirDNA reveals that 2022 is expected to see 20.3 per cent more demand than the previous year.
The outlook for the short term rental industry this year is one of substantial growth. Earlier in May this year, 88,000 new short term rental units were added in the US, marking a new high for supply.
Investment accelerated during the first half of 2022, particularly in mountain, lake and rural areas. Listing totals are now projected to reach 21 per cent growth for 2022, with AirDNA forecasting an 8.6 per cent supply increase in 2023 (1.4 million).
Urban centres are the only location type with occupancy levels still below 2019, despite growing 5.2 per cent year-over-year. As international travellers from key feeder markets such as Canada and the UK begin to return to the US, AirDNA expects larger cities to benefit. The majority of coastal and mountain markets are seeing demand higher than last year’s record figures for this summer.
As supply increases to meet demand, overall occupancy across all location types is expected to average 58.2 per cent this year and then drop to 57.4 per cent in 2023.
Jamie Lane, AirDNA’s VP of research, said: “2022 will be a record year for STRs, with more nights stayed in a rental than at any other point in history. A huge influx of new supply has even outpaced demand growth, pushing occupancy down.”
Rising cos pressures could push average daily rates (ADRs) up by 6.3 per cent this year. So far, these increases have exceeded inflation, but as occupancy rates decline, competition to attract guests may prompt in lower prices. In 2023, rates are expected to grow 3.4 per cent – half the growth rate of 2022.
AirDNA’s COO Demi Horvat said: “Despite relentless growth for US short term rentals, turbulent trends are the new normal in the industry. Leveraging data is essential for all industry stakeholders to turn these trends to their advantage and enhance their profitability through timely strategic planning.”
To read the AirDNA 2022 Mid-Year Outlook Update, click here.