AirDNA publishes first Short-Term Rental Index on the US market

US: The first-ever Short-Term Rental Index from short-term rental data provider AirDNA reveals that in many markets across the US, vacation rentals are still a thriving industry and a prosperous business.

In 2018 alone for example, 1.8 million properties across the country were purchased with the intent to earn short-term rental revenue.

However, with the spectre of regulation looming large in many urban markets, enterprising homeowners pushing up supply and cost-sensitive travellers expecting ever more ‘bang for their buck’, the hospitality industry is debating the sustainability of these sky-high revenues.

AirDNA’s new Index adds much-needed data to the debate on the state of the US short-term rental market. The Index looks at the average revenue generated by all rentals listed on Airbnb or Vrbo to determine whether properties are earning more or less on a seasonally adjusted basis.

Key findings of the report:

• The AirDNA Index was 139.9 for July 2019, down 6.0 points from the previous year.
• Most of the vacation rental growth can be attributed to the strength of leisure destinations, which are up 37 points in the last two years while city destinations are only up 12 points over the same period.
• Steady growth continues in the top 25 metropolitan markets in the US, but as vacation rental markets are trending toward larger, higher-earning properties, urban markets have started to lag behind.

Urban Markets

Going up ▲

• Explosive growth: Indianapolis has seen a revenue lift of over 17.4 per cent YOY. Reports have cited Indy’s high quality of life and burgeoning tech scene
• Capitalising on events: Despite questions over legality and supply remaining relatively flat, Austin’s rentals have seen an eight per cent increase in revenue, indicating that hosts are pricing better for events
• Millennial nesting: Revenue is up 7.6 per cent in Denver as young investors look to diversify their income streams, despite stringent regulation

Going down ▼

• Plummeting revenue: Even boasting some of the Bay area’s more relaxed regulation, San Jose was still down 15.5 per cent YOY. That said, hosts still pocketed an average of $3,895 per rental last month
• Regulation hits home: Hosts in Fort Worth saw their revenue decline by more than 18 per cent YOY

Traditional Vacation Rental Destinations

Going up ▲

• Softening seasonality: With its acceleration of summer tourism, vacation rental revenue in Breckenridge is up 36.2 per cent YOY
• First-class upgrade: While spring breakers and families have long supported tourism in Myrtle Beach, luxury units springing up in locations such as Cherry Grove have helped to lift rental revenue by 26.5 per cent

Going down ▼

• Unsustainable tourism: Despite a huge peak in demand by spring breakers in March, Fort Lauderdale revenue dropped by 11.6 per cent YOY
• Rental restrictions: Orange Beach revenue has seen declines of 11.1 per cent

AirDNA founder and CEO, Scott Shatford, said: “Up until now, the debate about the state of the US vacation rental industry has been built on speculation, and ‘hunches’ about the growth of local markets. We decided to take a look at what the data was really telling us about where we are in the vacation rental cycle.

“AirDNA is excited to announce the launch of the Short-Term Rental Index, and to work with our customers and partners to ensure they have the leading edge on what’s really going on in today’s market,” he added.

This is the first in a series of Indexes from AirDNA. Visit the website here for more data-driven vacation rental analyses from the AirDNA team.

AirDNA also recently published a blog post on the state of the vacation rental market in Dubai following a surge in business in the region ahead of the upcoming Serviced Apartment Summit Middle East & Africa [SASMEA].

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