AirDNA has released its latest monthly review of the European rental market [Unsplash]

Europe marks best quarter for rental demand since March 2020

Europe: The latest monthly review for Europe released by short-term rental data and analytics provider, AirDNA, depicts an industry in recovery, though the recovery is taking longer than in the United States.

Despite Omicron hesitancy, Q4 2021 was Europe’s best quarter for short-term rental demand [just 6.6 per cent below Q4 2019] since the beginning of the pandemic.

The Airbnb and Vrbo market data shows 2021 ended with demand nights 24 per cent below 2019 levels, albeit 18 per cent above the lows of 2020. Supply is similarly lagging as properties are taken off the short-term rental market for other uses: the average number of monthly available listings fell 4.8 per cent in 2021 vs. 2020.

The majority of the demand was outside of the 25 largest cities: where there was growth of 16 per cent over 2019, while in those largest cities, demand was down over 50 per cent. Supply followed the same shift, with larger properties in rural and coastal areas receiving more bookings and joining the market faster than the traditional city centre apartments.

Omicron causes dip in demand

November 2021 saw the first time pan-European demand was positive of its 2019 performance since the pandemic began [+0.3 per cent], though with rising cases and the threat of Omicron, it ended up back below 2019 levels in December.

Occupancy reached a record 47.1 per cent for December, driven in part by the low supply of available listings – 15.3 per cent lower than December 2019.

In December, only France and Russia saw more demand than in 2019 [+13.3 per cent and 3.3 per cent respectively], after six countries in November. The lowest relative demand vs. 2019 was in typical city break destinations Hungary [-44.5%] and the Czech Republic [-57.2%].

2022 outlook positive for recovery

Jamie Lane, VP of research at AirDNA, said: “With relieved travel restrictions and pent-up demand set to bring in a strong summer, 2022 is shaping up to be the year of recovery for European short-term rentals.”

For the first quarter of 2022, nights already booked are about even with the same point in 2019, and a full 88 per cent higher than at the beginning of 2021, while pacing for June to September 2022 is just ten per cent below 2019 levels, with shortened lead times set to bring in lots of last-minute bookings.

Denmark leads the major European countries in summer demand pacing, with 71 per cent more nights booked in 2022 than in January 2019, followed by Germany [54 per cent] and Austria [28 per cent], where continued staycations combined with the return of international travellers could make for a very strong summer.

In comparison, the United States reported its best ever year for short-term rentals in 2021, according to AirDNA, with new bookings surging in March to reach record occupancy for the rest of the year. However, the data provider expects occupancy rates to drop in 2022 as more supply enters the market and booking patterns began to normalise towards pre-pandemic seasonality patterns, alongside the re-emergence of overseas travel.

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