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:
- David
