US: The US short-term rental market rang in the new year with strong demand, with 19.8 per cent more nights stayed in December 2022, more than the 16.7 per cent year-over-year growth for November, according to short-term rental data and analytics provider, AirDNA.
AirDNA reported that, as new listing growth cooled from the high levels seen earlier in the year, occupancy levels in December closed the year-over-year gap to its closest level since March, at 1.2 per cent below 2021 levels.
In 2022, US short-term rentals earned over $62 billion in revenue, a 25.1 per cent year-over-year increase, with almost 200 million nights stayed and over two million listings receiving at least one booking. Overall occupancy for the year ended at 58.7 per cent, an expected drop from the 61.3 per cent in 2021 caused by the pandemic’s pent-up demand and a lack of supply in both short-term rentals and traditional hotels.
The strong December performance is a positive sign for the industry moving into 2023, with demand growth widespread and all top 50 markets seeing significant YoY growth.
Markets such as Phoenix / Scottsdale and Las Vegas have seen consistent gains over the past two years, with December continuing the trend of strength. The Northeast Atlantic coast also saw increased interest in vacation rentals, with Long Island and Cape Cod taking the top spots for demand growth as opposed to Florida, in many cases constrained by off-season closures, which generally were among the bottom markets for demand growth.
In 2022, supply growth was a major trend in the short-term rental industry, with record highs of 1.39 million available listings in July. After years of difficulty in larger markets, the gains made in December pushed total available listings in the top 50 markets above 600,000 for the first time since January 2020.
The average monthly available listings for all of 2022 finished 22 per cent higher than in 2021, which created strong headwinds for occupancy and revenue per available rental [RevPAR] leading to the so-called ‘Airbnbust’ phenomenon felt by some hosts.
Average daily rate [ADR] growth YoY slowed in December compared to November, due to lower occupancy, a strong comparison year, and slowing inflation, according to AirDNA.
Large cities and suburban locations saw a significant slowing in ADR gains, while small and mid-sized cities were able to maintain moderately high growth. In mountain / lake destinations, ADR growth grew just +0.7 per cent YoY and may turn negative in future months.
The upcoming Super Bowl is expected to have a significant impact on both short-term rental demand and rate in the Phoenix area, which is already having a great year: demand is expected to be approximately 30 per cent higher YoY in the weeks leading up to and after the Super Bowl, with a boost of 47.7 per cent more nights booked than last year on Super Bowl Sunday.
Additionally, ADR is expected to be between ten to 20 per cent higher YoY in the first week of February, with a pronounced jump to 35.5 per cent higher on Monday 6 February and an 82.9 per cent YoY growth on 12 February [Super Bowl Sunday]. This amounts to a premium of about $340 compared to the corresponding Sunday in 2022.
Although bookings for the winter are on the whole somewhat muted, with 12 per cent more nights booked than last year for February and March, guests are beginning to get in early for their beach getaways, with bookings in top coastal destinations up 42 per cent from 2019 for May and June.