AirDNA: US rental occupancy tightens gap with last year’s highs

US: The latest market review by short-term rental data provider AirDNA shows another record month for short-term rental demand in the United States, with 26.6 per cent more nights stayed than the same month in 2019.

It represented the strongest month for demand growth compared to 2019 levels since the start of the pandemic, thanks to robust supply, a slight alleviation in gas prices, and the return of sports travel with the new college football season.

Occupancy remains down on 2021 highs, but in September, it was just 1.2 per cent below last year’s record, after a 4.4 per cent decrease in August. The decrease in occupancy is mostly due to the addition of more than 70,000 new listings, despite the high interest rates observed in September, bringing available listings up to 1.38 million, 23 per cent more than last year.

Listing growth has been highest in small markets: the top 50 cities collectively have not yet reached 2019 levels of supply, even dropping slightly from August to September; while other markets are growing strongly.

Of those largest markets, the highest gains in supply were to be found in Texas and the Southwest. The Phoenix / Scottsdale MSA has seen 44 per cent growth in listings over the last year, followed by Houston [+43 per cent], San Antonio [+43 per cent], and Las Vegas [+36 per cent].

Those markets also saw stronger decreases in occupancy than the national average, as supply outpaced demand.

Inflationary pressures grow

Average daily rates [ADRs] were up 5.6 per cent from last year, a higher rate of growth than in August [+2.7 per cent], and slightly above the Consumer Price Index [5.4 per cent] after some months below. This was pushed by prices in the luxury tier, which were around the same as last September [-0.2 per cent], after being down over five per cent in August.

As the purse strings get tighter this winter with tougher and tougher economic conditions, it remains to be seen whether American travellers will take advantage of the weak euro to travel to Europe, or stay closer to home.

Currently, bookings through December are looking strong, with 14 per cent growth on the same time last year for October and December, and 17 per cent for November as Thanksgiving stays get booked. However, growth for 2023 is below ten per cent, showing some hesitancy to book farther out.

To read the review in full, follow this link.