Since we recently announced our Hughberry Homes fund, we know many of you are curious about how the data looks for short-term rentals for this year and beyond (STRs, also known as vacation homes or vacation rentals).
We dove into the numbers, and long story short — the stats are very encouraging.
In June, AirDNA recently reported that STR occupancy rates have been “normalizing” in 2022. This means that although we may continue to see occasional dips — June, for example, saw a 9% dip compared to June 2021 — the numbers are overall very consistent and even growing. July had a boost due to last-minute vacation bookings and, in fact, set a new record for the STR market.
AirDNA estimated that more than “23 million nights were stayed in a short-term rental in the U.S. during the month of July 2022,” an 18.2% increase over last year’s numbers.
Much of these positive numbers can be attributed simply to more availability of STRs. Last year, demand was high, but there weren’t enough STRs to accommodate. But many, like us, saw a huge opportunity in this space and sprang into action. In July 2022, available listings topped 1.39 million — 25.5% higher than July 2021. With increased availability came increased bookings.
Demand is projected to continue increasing: “As we look to Q3 2022, demand is pacing 11% higher than 2021 and 18.6% higher than 2019,” with even higher numbers in Q4. According to the same projections, there are no signs of demand decreasing its pace.
And folks concerned about a looming recession should be glad to know that, even with the pervasiveness of “economic uncertainty,” the data and indicators suggest “positive gains for the hospitality industry and, specifically, for the short-term rental sector.” AirDNA attributes part of these gains to the “return of international travel, an ever-growing supply base, and work-from-home policies that make it easy for more and more guests to live and work anywhere.”
Plus, researchers have found that the dip in the housing market has not impacted STRs (at least, not yet, but it doesn’t seem likely based on the projections). In July, 80,000 new STRs were added to the market —even while home prices started to lower. Nearly all 50 STR markets throughout the country have seen pretty major increases in listings this summer, save for good ol’ California (specifically, the Bay Area).
That doesn’t mean we’re totally in the clear just yet, because there is a slight softening of the STR market as we head into fall. Basically: demand will continue to uptick over time, but the fall and winter might not have quite the same boom as the summertime.