“Heading into 2024, the industry is set for balanced growth with slower supply expansion, anticipated at 10.9%,” commented Jamie Lane, SVP of Analytics at AirDNA. “While reports of an STR ‘collapse’ have been greatly overstated, the market’s increasing competitiveness demands that hosts and property managers closely follow data trends. This approach will be key to outperforming competitors and maintaining high revenues, capitalizing on a stronger economy and travelers’ growing preference for STR lodging.”
2023: A Year of Mixed Signals
Despite a record-breaking July with 24.1 million nights booked and a peak of 1.6 million listings in September, the industry saw its first Revenue per Available Rental (RevPAR) drop of 4.9%. Occupancy rates returned to pre-pandemic levels at 54.8%,” noted Bram Gallagher, PhD Economist at AirDNA. “In response, hosts lowered rates to attract budget-conscious travelers, impacting revenue but adapting to market shifts. Successful hosts were those who adeptly navigated these changes and maintained high-quality service.”
While high mortgage rates and soft per-unit revenue performance have moderated the pace of new listings compared to 2022, the STR market still expanded significantly, leading to a 12.8% increase in the number of available nights in 2023. With more options available, lead times for bookings shortened, meaning travelers waited an additional week to book on average in 2023 compared to the prior year.
Economic Outlook for 2024
The anticipated gradual decline in inflation and stable economic forecast for 2024 are set to positively influence STR market dynamics. Average rates are expected to rise by 2.1%, which will drive a 1.9% increase in RevPAR. Occupancy rates, after declining from their 2021 peak, should stabilize around 54.7%, in line with 2023 levels. “The alignment of supply growth with rising demand indicates a healthier, more sustainable market dynamic,” said Jamie Lane, SVP of Analytics at AirDNA. “This equilibrium is a sign of the market’s maturity and resilience in adapting to various economic conditions.”
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SOURCE AirDNA
Originally published at https://www.prnewswire.com/news-releases/airdna-2024-outlook-report-new-equilibrium-in-us-short-term-rental-performance-302018968.html
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