fbpx
vacation rental conference

2021 – 2023 US Short-term rental market trends, according to AirDNA

us short-term rental market forecast 2022 2023
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Short-term rental data provider AirDNA has boldly gone where no industry analyst has gone before by publishing a forecast report for 2021 to 2023. Using current booking trends, GDP and employment forecasts, as well as historic short-term rental and hotel booking patterns, AirDNA has made thought-provoking predictions about the U.S. vacation rental and urban markets. We summarize and comment on the most striking parts of this outlook, from the rebound in demand for urban short-term rentals to an increase in extended stays. Yet, as more supply comes back online and travelers start booking smaller city apartments again, overall average daily rates (ADRs) will go down in 2022 but remain 7.5% higher than in 2019.

US short-term rental market to be back to 2019 not before 2023

Here’s AirDNA’s forecast for the U.S. short-term rental market demand, with actual 2019 and 2020 figures and projected 2021 and 2022 numbers.

ADR has built 3 hypotheses from now to the end of 2022: Medium, Upside (Optimistic), and Downside (Pessimistic).

us short-term rental market forecast 2022 2023

Only in 2022 will the number of available listings surpass the 2019 number

While the demand for non-urban rentals has given incentives for owners in these markets to open their properties, the loss in the number of available listings has been huge in cities.

2022 vacation rental conference

Overall, the number of available listings decreased by 11.5% compared with 2019.

Available supply is both more elastic and less flexible than you can think at first sight:

  • Very elastic: It is very easy to close a property calendar on Airbnb, Vrbo, or Booking. The listing is still there, but it is not an “available listing” anymore.
  • Elastic: In seasonal markets (e.g., ski), vacation rentals close off for months on end. It is less true for urban short-term rentals.
  • Elastic: Owners can choose to turn from short-term to long-term stays. The overall supply has gone down in cities as apartments were removed from the short-term rental listing sites.
  • Less elastic than usual: When demand rises, owners usually find ways to add supply. While they cannot immediately build more properties, they can open up their secondary homes (see more here about the lack of supply in key markets). During COVID, many owners chose to keep their second homes for their use as they were moving away from cities. As a result, supply has been tight in 2020 and 2021 in traditional vacation rental markets.

ADR will go down in 2022 … not because rates will go down, but because smaller urban units will be booked again and drive down the average values

AirDNA’s Medium hypothesis states that rates will go up. Yet, it also says that the Average Daily Rate will go down in 2022 compared with 2021. There is no contradiction here.

In 2020 and 2021, a lot of small urban apartments sat empty, while people were booking large family-friendly vacation rentals in rural and coastal markets. These large, in-demand places have a higher ADR than urban rentals.

This is what Airbnb is seeing for summer 2021 in its data: Larger accommodations that can cater to 5 guests or more accounted for 35% of summer nights stayed in 2019 and now account for 54% of summer nights booked in 2021.

Yet, as demand flows back to cities in 2021, smaller places in cities will be booked again, driving down the overall average of the market.

2020 and 2021 were great for traditional vacation rental markets (rural, coastal, and mountain) but cities are coming back. Urban demand to be back to 2019 levels in 2023.

In the first half of 2021, the whole US market was booming, with demand at +24% compared with 2019. The situation was very contrasted across markets. For instance:

  • Small city and rural markets were growing at +62%
  • Large cities and urban markets were decreasing by -46%.
us vacation rental booking patterns

AirDNA sees urban markets starting to revive in late 2021. The company thinks that urban demand will fully recover to 2019 levels in late 2023. A key factor for the recovery of urban markets like New York City and Los Angeles is the return of international travelers, who represent up to 30% of the demand in these cities.

Note that some major coastal cities such as Miami are doing pretty well. As we discussed with HomeToGo, there are many differences in the impact of COVID in urban short-term rentals if you compare Chicago and San Diego, for instance.

urban vacation rental market trends 2022 2023

AirDNA’s report is focused on the US. How do we think that Europe compares? When looking at our summer 2021 European trend report, we can see that:

  • Just as in the US, non-urban destinations are doing well this summer
  • While AirDNA thinks that US cities will start recovering in the second half of 2021, it is is harder to say in Europe. First, vaccination rates are still lagging behind the US. Second, the threat of new variants and the return of colder weather may impose new restrictions in European cities after September.
  • European data seem to be the same in the US in terms of supply trends, with big supply losses in major tourist markets such as Paris and Barcelona.

Share:

Share on facebook
Facebook
Share on twitter
Twitter
Share on pinterest
Pinterest
Share on linkedin
LinkedIn
Rental Scale-Up

Thibault is the founder of Rental Scale-Up. He owns vacation rentals in St. Barths and Bali. He also leads innovative projects for companies within the vacation rental industry. Feel free to reach out to Thibaut Masson on Linkedin.

Winter Resort Website Medium Rectangle Ad

Table of Contents

Dear Short-Term Rental Industry Member, Join Our Scalers Network

Our Mission

We bring together short-term rental industry members to create valuable business and personal relationships. With the support of vetted peers, you can deliver on your next individual project goals faster, work in private groups to share doubts and successes, and become a new voice that shapes the conversation about our industry.

Whether you are a property manager, an owner, an industry vendor, a listing site operator, an investor, or a consultant, you can become a member of our Rental Scale-Up family.  As property managers and industry vendors may not have the same needs, some of our activities work by affinity groups. For instance, we have one version of the mastermind group sessions reserved for property managers and owners, and another one for vendors and listing sites. This way, you get feedback from peers who understand your pains and can get you faster to getting results.

1. Action, Transformation & Results

  • Mastermind Group for Property Managers & Owners: A mastermind group is a group of peers who meet to give each other advice and support. Facilitated by Rental Scale-Up. One session every 2 weeks with your group for a least 3 months.
  • Ask a Property Manager: Hosts, owners and property managers benefit from the experience of a successful property manager. (1 per month)
  • Groupwork: Report of the month co-creationA group of Scalers volunteer to write a report on the topic of the month. The result is published on RentalScaleUp.com, with full credits to each participants. (1 per month)
  • Mastermind Group for Industry Vendors & Listing Site Operators: A mastermind group is a group of peers who meet to give each other advice and support. Facilitated by Rental Scale-Up. One session every 2 weeks with your group for a least 3 months.
  • Ask an Expert Anything (for vendors and listing sites): An outside expert (e.g. a copywriter) shares their experience on a topic in an Ask Me Anything (1 per month)

2. News & Live Discussions

  • Investment & Deals  Discussion: Thibault and an M&A specialist/VC go over recent deals, M&A, investment rounds. Live, monthly.
  • Curated news: Save time. We read the news for you, curate the articles, and add our exclusive comments (weekly, in the Network Newsletter)
  • US Trends & Data Discussion: We analyze AirDNA’s latest report on US trends and zoom in on key markets (e.g. urban vs vacation rental markets).  Network members share what they see in the markets. Live, monthly.
  • Monthly Live online conference: Every month, our Network deep dives into a topic that is crucial to the short-term rental industry. 3 experts share their insights, best practices and answer your questions live.
  • European Trends & Data Discussion: We analyze AirDNA’s latest report on European trends and zoom in on key markets (e.g. UK, France, Italy, Spain).  Network members share what they see in the markets. Live, monthly.
  • Weekly Teardown with Thibault: Rental Scale-Up founder tears down one business news, every week, live.  Networker members share their views. No filter.

3. Facilitated Networking

  • Networking Booster: Meet new business partners and improve your networking game at an online event. Our team facilitates the event to make it easy for you to connect with your peers. (monthly)
  • Business Profile: Each new Scaler gets their profile featured in a dedicated article on RentalScaleUp.com. Get more visibility and authority.
  • In-Person Meetups: We meet in real life, either during a large vacation rental conference or in a city of our choice (quarterly)
  • Job Offers: Network members can not only see job offers but also post theirs. If desired, job offers can be extended to all Rental Scale-Up readers (free and paid).

4. Deals on industry software and products

  • Get Discounts: Enjoy exclusive deals brought to you by fellow Network members. Only in our Deals section. Monthly.
  • Offer Deals and Discounts: Network members may offer exclusive deals to fellow members, from discounts on stays at their properties to lifetime deals on vacation rental software. Only in our Deals section. Monthly.

Ready to join right now?

Scalers comes in 3 levels:

  • Scalers Insights, the limited, content-only version of the network. Great those who just want to get the insights but have less time for business transformation.
  • Scalers Network: Transform your business and get results. Get more things done. You get support, accountability, networking, training, and investment opportunities
  • Scalers Network+ : Avoid the hassle of quarterly payments and pick an annual membership. Qualify for bonuses good for your business (e.g. lead generation)

Not quite ready? Sign up for our free newsletter

Weekly insights straight into your email inbox.

On Key

Related Posts

Actionable insights

Take the Right Decisions for Your Rental Business thanks to our Weekly Industry Brief.

Exclusive newsletter for rental entrepreneurs.