UK: Performance data from an ongoing pilot study released by data intelligence and global benchmarking platform, STR, shows that the short-term rental sector has proven to be more resilient than most accommodation sectors during the coronavirus pandemic.
Trade body the UK Short-Term Accommodation Association [STAA] believes this suggests that short-term rentals will be fastest out of the blocks when the hospitality sector reopens.
The tracking study – the first of its kind set up between STR and the STAA and its members – compares how short-term rentals in London have performed against other accommodation sectors including hotels, hostels and serviced apartments.
Looking at data for the 12-month period between December 2019 and December 2020, it shows that occupancy in short-term rentals, compared to the other accommodation sectors, proved to be more resilient after the March lockdown was implemented, was quicker to recover when the market reopened in late Spring and reached higher levels of occupancy during last year’s peak in October.
For average daily rates [ADR], short-term rentals proved more resilient again. Whilst seeing a steep decline from April, it managed to maintain rates from August until the end of the year, which is important in helping businesses recover, as well as preserving and growing jobs in the sector across the country.
According to research conducted in November 2020 with STR’s Global Traveler Panel, when guests were asked about their attitudes towards different types of holiday accommodation before Covid-19 to how they feel now, short-term rentals and small hotels [<50 rooms] were the only two categories of accommodation where there was a positive net interest [difference between ‘more interest’ and ‘less interest’] now than previously. Short-term rentals had a +11 per cent positive and small hotels +5 per cent, whereas serviced apartments were -4 per cent, B&Bs/guest houses -15 per cent and larger hotels [>100 rooms] -30 per cent.
Commenting on the findings, Merilee Karr, chair of the STAA and CEO of UnderTheDoormat, said: “Whilst we all know how tough a year 2020 was for the whole of the hospitality and tourism industries, we now have to focus on making the most of the opportunities to recover this year. It is very encouraging to see that short-term rentals have shown the highest level of resilience to the unprecedented restrictions the industry has had to bear.
“The encouraging signs are that customer confidence in booking short-term rentals is positive and, with staycations likely to be the focus for 2021, whether Brits travel to the seaside or explore cities such as London or Bath, we hope to welcome them to a variety of beautiful homes when they venture out for their much needed holidays later in the year.
“Much of this confidence, I believe, can be traced back to a significant change in consumer preferences that have been accelerated by the Covid-19 pandemic. Over the last five years, we have seen a mushrooming in demand for the ‘home from home’ experience that short-term rentals offer customers but now, with the added requirement for social distancing and high standards of cleanliness and safety, it seems that customers recognise that short-term rentals are better placed to deliver this than other types of accommodation.
“We sincerely hope that all sectors are able to recover fully so that the UK can resume its position as one of the best loved and most visited destinations for tourists, international travellers and business travellers, as well as for UK staycationers, and if the short-term rental sector can help to accelerate that recovery, it’s a win:win situation,” she added.
Patrick Mayock, STR’s VP of research & development, said: “It’s no surprise that 2020 was an incredibly challenging year for all accommodation providers. Our pilot study in London did, however, reveal somewhat of a bright spot for the year – the resilience of short-term rentals.
“The London findings mirror results from other pilot markets where STR tracks data for the sector, in which short-term rentals experienced less severe dips and faster rebounds than comparable hotels. Being able to report on all accommodation types gives unparalleled visibility into such performance patterns and other market dynamics,” he added.
The tracking study that STR is providing for the STAA is unique in that it measures the three main accommodation sectors simultaneously. The pilot study recruited several of London’s biggest short-term rental operators, including GuestReady, Seven, Urban Stay and UnderTheDoormat.
STR will provide monthly and year-to-date performance metrics for the London market for:
- Hotels, short-term rentals and serviced apartments – occupancy, average daily rate [ADR] and revenue per available room [RevPAR]
- Short-term rentals only – average length of stay, average cleaning fee per stay
The performance of hospitality and real estate asset classes will be assessed in the opening session of International Hospitality Media’s upcoming Urban Living Lite webinar series, sponsored by Yardi.
Taking place at 10am GMT on Monday 1 March, sign up to the webinar on “Understanding urban living markets: how are hospitality and real estate asset classes performing and what’s the outlook?” at the link HERE.
Joining host and IHM editor-in-chief, George Sell, will be:
- Alex Robinson, senior manager – Industry Partners, STR [hotels and serviced apartments]
- Fred Lerche-Lerchenborg, CEO, Lavanda [student housing]
- Sarah DuPre, sales director, AirDNA [Airbnb and short-term rentals]
In the run-up to the Urban Living Festival, on 7-8 July 2021, Urban Living Lite is a curated series of eight bespoke “lite” virtual events for urban innovators and investors at the cutting edge of contemporary hospitality, real estate and living.