Suburban Areas Driving Short-Term Rental Industry Comeback

A new report shows the short-term rental industry is making a comeback as the areas around big cities in the United States have helped boost the number of nights stayed to record levels.

According to AirDNA’s new mid-year short-term rental outlook report, average occupancy rates in the 50 biggest metropolitan areas on apps such as Airbnb and Vrbo increased by more than five percent in the first half of 2022 compared to last year.

Suburban rentals are almost 11 percent higher than in 2019, fueled partly by longer-term stays of 28 days or more. Short-term rentals in city centers remain depressed, as they stayed 21.6 percent lower in the first half of 2022 than 2019 levels.

“Now we’re in the recovery phase for cities,” AirDNA vice president of research Jamie Lane told PhocusWire.com. “Last year we saw almost no recovery in urban demand. This year, in 2022, we’re now seeing the recovery of urban demand, which is pushing occupancies higher.”

“We’re still not back to the 2019 level, but we’re well on the way to recovery now,” Lane continued. “We’re still a ways away from full recovery. We do think we’re going to get there, but it’s not going to be until the end of 2023 that we expect demand to recover in urban areas.”

Overall urban occupancy during the same period was also down 2.2 percent from 2019, making inner cities the only U.S. location type with occupancy still lagging pre-pandemic levels. Across all location types, data suggests short-term rentals will climb an average of 20.3 percent year-over-year.

Listings are expected to earn 2.1 percent more revenue in 2022, as the United States has outperformed all other countries around the globe in terms of short-term rental demand.

Earlier this summer, Airbnb announced that its temporary ban on parties at rental properties would become permanent. Officials revealed that “disruptive parties and events” would be permanently banned after more than two years of being temporarily banned. The company also said party houses would be outlawed moving forward.