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Short term rentals are outperforming hotels during the COVID-19 pandemic



By
30 July 2020 (Edited 30 July 2020)

Although performance varies widely by state, 2020 US bookings on short-term-rental platforms are up by 20% vs. 2019


Travel market researchers STR in conjunction with short-term-rental analytics provider AirDNA have released the results of research showing that since the onset of the COVID-19 pandemic, US short term rentals have outperformed traditional hotels on occupancy and Average Daily Rate (ADR).

Using weekly data from March 2019 to 27 June 2020, researchers compared the performance of 3 categories of accommodations in 27 markets:

  • Traditional hotels
  • Hotel-comparable short-term rentals (studios and one-bedroom units)
  • Large short-term rentals (2 or more bedrooms)

Key findings:

  • Traditional hotels had the most severe year-on-year performance declines during the pandemic: as incidence of COVID-19 began to ramp up in March 2020, occupancy of traditional hotels was down 77% from March 2019, vs. a 45% decline for short-term rentals.
  • US-wide, new bookings on short-term-rental platforms are up 20% year-on-year.
  • Throughout most of the pandemic, large short-term rentals - particularly, e.g. , 4-bedroom houses near leisure destinations - have had the most favorable week-over-week changes in ADR.
  • Fastest-growing destinations for short-term-rental bookings include:
    • Beaches
    • Mountain towns
    • Lakes
    • Almost anywhere within driving distance of a major city
  • States that saw greatest growth in short-term-rental bookings included:
    • West Virginia
    • South Dakota
    • Oklahoma
    • Arkansas
    • Wyoming
    • Delaware
    • California
  • States still struggling to return to 109 booking levels include:
    • Illinois (-41% vs. 2019)
    • New York (-32%)
    • Hawaii (-30%)
    • Massachusetts (-29%)

Poorer performance of traditional hotels likely is due in part to the fact that their major markets tend to be business travelers and large groups, whereas short-term rentals appeal more to leisure travelers,

Comments:

  • These findings are of course influenced by travel restrictions being imposed by the various states in an attempt to limit exposure of residents to COVID-19. Example: Massachusetts, where 2020 short-term-rental bookings are down 29% from 2019, permits visitation without quarantine for residents of only 8 other states.
  • Traditional hotels with large staffs have less flexibility in opening/closing/scaling up or down than do short-term-rental properties.
  • Many towns with beaches, mountains or lakes are resisting invasion by hordes of people fleeing from COVID-19 hotspots.
  • And in communities where residential housing stock is being converted to short-term rentals - causing workers to move farther from their jobs to find affordable long-term rents - backlash against Airbnb and other platforms will be on the rise:


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David Boggs    - David
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External Article: https://str.com/press-release/str-airdna-analysis-short-term-rentals-and-hotels-27-global-markets



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