AirDNA is releasing its 2024 Outlook Report

AirDNA 2024 outlook: New equilibrium in US STR performance

US: Short-term rental data and analytics provider, AirDNA, has released its 2024 outlook report, forecasting measured growth for the US short-term rental industry in the coming year. 

Demand is projected to rise by 10.7 per cent year-over-year, surpassing the 6.7 per cent increase in 2023, supported by a stable economic backdrop.

Jamie Lane, SVP of analytics at AirDNA, said: “Heading into 2024, the industry is set for balanced growth with slower supply expansion, anticipated at 10.9 per cent. While reports of an STR ‘collapse’ have been greatly overstated, the market’s increasing competitiveness demands that hosts and property managers closely follow data trends.

“This approach will be key to outperforming competitors and maintaining high revenues, capitalising on a stronger economy and travellers’ growing preference for STR lodging,” he added.

Despite a record-breaking July with 24.1 million nights booked and a peak of 1.6 million listings in September, the industry saw its first revenue per available rental [RevPAR] drop of 4.9 per cent.

“Occupancy rates returned to pre-pandemic levels at 54.8 per cent,” noted Bram Gallagher, PhD economist at AirDNA. “In response, hosts lowered rates to attract budget-conscious travellers, impacting revenue but adapting to market shifts. Successful hosts were those who adeptly navigated these changes and maintained high-quality service.”

While high mortgage rates and soft per-unit revenue performance have moderated the pace of new listings compared to 2022, the STR market still expanded significantly, leading to a 12.8 per cent increase in the number of available nights in 2023. With more options available, lead times for bookings shortened, meaning travellers waited an additional week to book on average in 2023 compared to the prior year.

The anticipated gradual decline in inflation and stable economic forecast for 2024 are set to positively influence STR market dynamics.

Average rates are expected to rise by 2.1 per cent, which will drive a 1.9 per cent increase in RevPAR. Occupancy rates, after declining from their 2021 peak, should stabilise around 54.7 per cent, in line with 2023 levels.

Lane continued: “The alignment of supply growth with rising demand indicates a healthier, more sustainable market dynamic. This equilibrium is a sign of the market’s maturity and resilience in adapting to various economic conditions.”

Read the full AirDNA report at this link.

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