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Rental occupancy rates surpass other accommodation in London

UK: Performance data up to the end of June 2021 from a study released by STR, the data intelligence and global benchmarking firm, shows that London’s short-term rental sector is continuing to perform better than other accommodation sectors.

The tracking study, conducted in partnership with the UK Short Term Accommodation Association [STAA], is unique in that it measures the three main accommodation sectors simultaneously comparing how London’s short-term rentals, hotels and serviced apartments have performed against each other.

For occupancy, short-term rentals were considerably ahead of the others, averaging 62.7 per cent for June. Hotels stood at 40.6 per cent and serviced apartments were 39.7 per cent – marking a 35.7 per cent year-on-year increase for short-term rentals.

For Revenue per Available Room [RevPAR], short-term rentals were ahead again, averaging £79.20 in June – a 59.5 per cent year-on-year increase – compared to hotels, which averaged £40.40, and serviced apartments, which averaged £57.80.

Short-term rentals saw an increase in the average length of stay from 10.6 days in May to 11.0 days in June. In June last year, the average length of stay in short-term rentals was only 9.4 days. There is no comparable data with hotels and serviced apartments for this metric.

Merilee Karr, chair of the STAA and CEO of UnderTheDoormat, said: “It’s great to see that some of the main business indicators for the short-term rental sector are looking in much better shape now since the UK domestic tourism and hospitality markets opened up. Whilst there has been a noticeable absence of international visitors to London, the news that fully vaccinated individuals from Europe and the US will be welcomed back to England from 4 August should help improve the picture for many operators and drive the recovery for the capital’s accommodation.

“It’s interesting to see that not only is occupancy and RevPAR looking good but the average length of stays has steadily increased since April. Guests are taking fewer but longer trips away because short term rentals can offer them a true ‘home-from-home’ experience enabling people to combine work with time away.

“As the traditional UK holiday destinations fill up, people should turn to see what their cities can offer. Short-term rentals enable guests to socially distance themselves from others and offer them the reassurances of high standards of cleanliness and safety.

“This should appeal to both leisure and business travellers,” she added.

Patrick Mayock, VP of research & development at STR, said: “Our pilot study has shown that the short-term rental sector in London have proven to be resilient and a popular choice for visitors to the capital. It will be fascinating to observe what happens to other accommodation types as restrictions loosen and more group and corporate travel return to the market.

“Our report provides those in all of the accommodation sectors high value visibility of the metrics behind the performances and trends,” he added.

The study’s key findings include:

Occupancy [12 months to end June 2021]

  • Short term rentals stood at 62.7 per cent for June 2021, which is a 35.7 per cent year-on-year [y-o-y] uplift on June 2020. Month-on-month [m-o-m], there has been a minor drop of 1.4 per cent.
  • Hotel occupancy was 40.6 per cent in June, up 61.8 per cent y-o-y, and 32.4 per cent higher than May 2021.
  • Serviced apartments were 39.7 per cent in June, a y-o-y increase of 126.7 per cent, and 18.6 per cent better than May 2020.

 Average daily rates [ADRs] [12 months to end June 2021]

  • Short term rentals averaged £126.20 for June, which was a rise of 17.5 per cent y-o-y, but a 5.3 per cent decrease compared to May.
  • Hotels averaged £99.40 for June, had a 31.6 per cent y-o-y improvement, and were up 14.6 per cent on May.
  • Serviced apartments averaged £145.70 for June, which was a 33.6 per cent y-o-y decrease and a 6.6 per cent increase compared to May.

Revenue per Available Room [RevPAR] [12 months to end June 2021]

  • Short-term rentals averaged £79.20 in June and saw the highest growth with a 59.5 per cent y-o-y increase. They were down 6.6 per cent on May.
  • Hotels averaged £40.40 in June, which was a 112.9 per cent y-o-y increase for hotels and a 51.7 per cent rise on May.
  • Serviced apartments averaged £57.80, saw a y-o-y increase of 50.5 per cent and a monthly rise of 26.4 per cent.

Average length of stay

  • The average length of stay for short term rentals rose from 10.6 days in May to 11.0 days in June. In June last year the average length of stay in a short term rental was only 9.4 days.
  • For the 12 months to June 2020 the average length of stay was 6.9 compared to 11.3 days for the 12 months to June 2021.