London short-term rentals outpace other accommodation types

London: Performance data from a study released by STR shows that the short-term rental sector in London has bounced back quicker than most accommodation sectors since the UK’s reopening, outpacing other major accommodation types for occupancy, ADR [average daily rate] and RevPAR [Revenue per Available Room].

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 short-term rentals in London have performed against hotels and serviced apartments.

Occupancy

  • Short-term rental occupancy rose from 43.1 per cent in May 2020 to 64.1 per cent in May 2021 – a 48.8 per cent increase. Month-on-month, there has been a 12.5 per cent improvement between April and May this year.
  • The latest comparable data available across the sectors is to the end of April 2020, showing that hotel occupancy stood at 28 per cent, serviced apartments was 39.9 per cent, with short-term rentals outpacing both at 57 per cent.

ADRs [12 months to end of April 2021]

  • Short-term rentals fared best with a rise of 9.4 per cent.
  • Hotels had a 14.9 per cent decline, with serviced apartments having a significant 63.1 per cent decrease.
  • Short-term rentals saw ADRs rise by 16.5 per cent from April to May this year.

RevPAR [12 months to end of April 2021]

  • Short-term rentals again came out as having experienced the highest growth with a 44.8 per cent increase.
  • Serviced apartments saw an increase of 25.2 per cent but hotels saw a decline of 2.6 per cent.
  • The month-on-month picture was even brighter for short-term rentals with a huge 40.8 per cent increase from April to May this year.

Average length of stay

  • The average length of stay for short-term rentals rose from 11.9 days in May 2020 to 13.3 days by December 2020, hitting a high in November of 14.3 days.

Merilee Karr, chair of the STAA and CEO of UnderTheDoormat, said: “It’s really encouraging for our sector to see some of the main business indicators looking so much healthier since the UK domestic tourism and hospitality markets have opened up. Whilst a hole will still exist from the absence of international visitors to London, customer confidence and the strength of the staycation trend are likely to fuel further the London accommodation recovery.

“Customer preferences for a ‘home-from-home’ experience have grown and short-term rentals in cities are fitting that bill perfectly. The ease at which guests can socially distance themselves from others and benefits such as the high standards of cleanliness and safety, should cement short term rentals as a mainstream option for tourists and holidaymakers,” she added.

Patrick Mayock, VP of research & development at STR, said: “Our pilot study continues to highlight the resiliency of short-term rentals in London. The results are really positive for the sector and reflect shifts in travel demand throughout the pandemic.

“It will be interesting to watch how other accommodation types fare as restrictions loosen and more group and corporate travel return to the market. Our report will give those in all of the accommodation sectors valuable and unparalleled visibility of such performances and trends,” he added.

The STR London accommodation tracking study recruited a number of short-term rental property management companies in the capital, including GuestReady, Seven Living, Urban Stay and UnderTheDoormat.