Europe: After surpassing pre-pandemic levels of demand every month since January 2022, the European short-term rental industry started to lose its momentum towards the end of the peak summer period, according to short-term rental data and analytics provider, AirDNA.
The continent ended September with 39.2 million nights stayed — 1.7 per cent less than 2019, though still 33.9 per cent more than 2021 — as guests began to weigh up the implications of an economic downturn happening in the continent.
According to AirDNA, average daily rates have been impacted by the slowing demand growth observed throughout the month: while still 25.3 per cent above 2019, rates were 0.1 per cent lower relative to 2021 as bookings returned to the largest cities with smaller unit sizes, which typically charge lower rates.
Despite this decline in demand, the occupancy rate observed in Europe remains strong [61.4 per cent], a 2.7 per cent increase over 2019. Available listings have continued to climb relative to 2021 [+16.1 per cent] but have failed to return to their pre-pandemic levels [-9.4 per cent vs. 2019].
Nine of the top 20 European countries saw positive demand figures in August relative to 2019, but this number was reduced to just six in September: France led the way [+19 per cent], followed by Germany [+16 per cent], Austria [+15 per cent], Greece [+14 per cent], Belgium [+ one per cent] and Italy [+ one per cent]. Supply growth was equally mixed among the top 20 countries, with the strongest growth in Norway [11.2 per cent], France [8.5 per cent], and Poland [7.7 per cent].
France top performer in demand and supply growth over 2019
The largest short-term rental market in Europe shows 66.4 per cent of all short-term rental listings to be found outside of large cities, with coastal areas growing at the fastest pace [+2 per cent of market share vs. September 2019]. This is a result of a change in the demand mix, which took occupancy levels through the roof in the mountain, coastal, rural and mid-size city areas where supply growth has not been able to meet the surging demand resulting from new pandemic travel patterns fast enough.
Paris’ greater area saw the most significant year-over-year change in summer occupancy [+24.2 per cent] and demand [+73.6 per cent]; although relative to the summer of 2019, supply and demand in the area remained 20.8 per cent and 25.9 per cent lower, respectively.
Of the 37.8 per cent of short-term rental bookings made by international travellers in Q3 2022 in France, the British led the crowds, making up 17 per cent of international bookings in the country [17 per cent], followed by the United States [15.4 per cent], and Germany [12.4 per cent], which increased its share the greatest when compared to pre-pandemic levels [+2.2 per cent].
Future demand decline brought about by tumultuous times
While demand for European stays in October and November is pacing eight per cent above pre-pandemic levels [+24.9 per cent vs. 2021], the economic uncertainty aggravated by energy shortages and inflation seems to be taking its toll on winter bookings.
Demand for December to March is pacing 15.7 per cent below 2019, although 11.7 per cent above 2021–a time when Omicron restrictions were still impeding travel among the continent. When broken down to the country level, only three countries are seeing winter bookings above 2019: Austria [+18.5 per cent], Finland [10.9 per cent] and France [7.8 per cent].
Last week, AirDNA announced that COO Demi Horvat would be succeeding Scott Shatford as CEO of the company.
