AirDNA highlights tenacity of US short-term rental market
US: Short-term rental data and analytics provider, AirDNA, has unveiled its mid-year outlook report for 2023, demonstrating that the industry continues to thrive as consumers prioritise travel despite economic uncertainties.
As CEO Demi Horvat and chief economist Jamie Lane presented at Skift’s Short-Term Rental Summit earlier this month, AirDNA’s demand forecast for 2023 has increased to 10.4 per cent year-over-year [YoY] growth, doubling expectations from the start of the year.
While higher mortgage rates have slowed new investments, current homeowners have stepped in, adding new listings to preserve ownership and capitalise on existing low interest rates. This shift has pushed annual supply growth to 14 per cent, up from a more conservative prediction of nine per cent at the end of 2022.
AirDNA forecasts a second year of declining occupancy, though to a lesser extent than previously forecasted, remaining well above pre-pandemic levels at 57.6 per cent. Occupancy rates are strong outside of the peak summer months, with growth in the shoulder and off-seasons empowering hosts to strategically boost revenue throughout the year.
AirDNA chief economist Jamie Lane said: “A headwind affecting demand growth is the slow return of international travel. While the strong dollar means Americans have re-embraced traveling abroad, inbound travel remains low.
“If this deficit closes, there is a huge opportunity for the largest cities, where foreign guests represented more than 20 per cent of STR demand pre-pandemic,” he added.
The outlook varies by location, and pandemic-favourite destinations in small and mid-sized cities are set to continue their growth, with revenue per available rental [RevPAR] growing three per cent in 2023. However, occupancy pressures in coastal and mountain or lake destinations and the rebalancing of demand from suburban to urban areas will cause RevPAR nationally to reduce slightly [-1.1 per cent] in 2023.
Hosts and property managers should keep a close eye on the data to beat the competition and protect their revenues, according to AirDNA.
AirDNA CEO Demi Horvat [who succeeded Scott Shatford as CEO in October] said: “We’re forecasting STR revenue to reach $78 billion by the end of 2024, up from $39 billion in 2019. While this growth can be variable in terms of who’s seeing it and who’s not, broadly, we think this paints a very positive picture.
“As strong believers in informed decision-making, our mission is to empower industry stakeholders to navigate this dynamic and changing environment with accurate data and trusted insights every step of the way,” she added.
Read the full report at this link.
