Short-Term Rental Market in US Experiencing Decline to Start 2023

New data suggests the short-term rental market in the United States fell sharply through the first six months of 2023.

According to data specialist Key Data, Revenue per Available Rental (RevPAR) increased across Europe and globally through June, jumping 5.7 percent to $49 due to an increase in occupancy offsetting a slight increase in Average Daily Rates (ADRs).

While hotel companies have been thriving outside the U.S., American brands contend with a cost-of-living crisis and a more extensive stock of available rentals. RevPAR in the U.S. declined by 3.3 percent to $89 in the first half of the year, while Average Daily Rates (ADRs) dropped 2.3 percent to $260.

Occupancy was also down one percent to 34 percent, the average booking window fell (ABW) from 45.1 days to 41.2 days and inflation in America reached four percent in May, year-over-year.

“The U.S. really has been the sick man of the short-term rental industry during the first half of 2023,” Key Data Executive Director Melanie Brown said.

“It is being hit from all sides after steep increases in supply over the past couple of years,” Brown continued. “This is going to take some time to unwind, with any deterioration in the economic landscape set to amplify the effects of this increased competition.”

In Europe, RevPAR was up 5.4 percent, occupancy was down 4.8 percent to 26 percent and ADRs were up 10.7 percent. As for the United Kingdom, RevPAR jumped by 9.2 percent, while occupancy was down 0.9 percent at 34 percent, but offset by a 10.1 percent rise in ADR.

RevPAR in the U.S. and globally weakened during the second quarter, while it strengthened in Europe and the U.K. In the third quarter, the short-term rental market’s RevPAR trajectory in the U.S. is expected to climb by 1.3 percent and occupancy increase by 4.3 percent.