Short-Term Rental Occupancy Achieving Record Highs
The short-term rental industry is eyeing a record summer amid surging demand and shrinking supply more than one year into the COVID-19 pandemic.
According to the latest data from AirDNA, occupancy in the U.S. climbed to 60.9 percent in March 2021 as many travelers sought to visit small cities and coastal destinations away from urban areas for spring break. By comparison, occupancy reached just 47.2 percent in March 2020 and 58.2 percent during the same month in 2019 one year prior to the pandemic.
The dramatic increase in occupancy was made possible by recovering demand for travel but also reduced supply. AirDNA points out that many short-term rental operators have temporarily or permanently removed their properties because of low demand, especially in hard-hit major cities where available listings have plunged by more than 30 percent. Meanwhile, rural locations and small cities have experienced 165 percent of 2019 demand while destination/resort locations are also seeing a surge in popularity.
“High occupancy levels in traditional spring break markets in Florida were not surprising,” said Jamie Lane, VP of Research for AirDNA, in a statement. “The most distinctive shift we noticed was the 30 percent gains in occupancy in markets like Cape Cod and the Lower Hudson Valley. These markets usually see a lull in demand until summer but due to their close vicinity to New York and Boston they have become a sanctuary for city dwellers craving a fresh sea breeze, even before the unrelenting heat hits.”
Average daily rates (ADR) are also up due to higher occupancies and demand for larger rentals in coveted destination markets ADR for March 2021 reached $254.70, according to AirDNA, which is 18 percent higher than last March and a whopping 192 percent higher than March 2019.
Momentum doesn’t appear to be slowing though. Record reservations were booked last month with travelers showing confidence for travel’s ongoing recovery by booking both near-term trips for April and further out into the summer months of June and July.
“Looking at this data we are expecting a record summer for the short-term rental industry,” AirDNA CEO Scott Shatford said in a statement. “For the first time, we see guests confident enough to book both near-term trips and plan further out into June and July.”