Short-term rentals are more popular than ever. In fact, according to data platform AirDNA, the occupancy rate on short-term rental properties is up 20% over 2019 and is now at its highest point on record.
A whopping 70.2% of all short-term rental units were occupied in June. Previously, the highest occupancy rate was just over 65%, seen in July 2020.
What's causing the spike, and where are occupancy rates highest? Let's dive into the data.
Why, what, and where
According to AirDNA, the spike in occupancy levels is due to two things: First, increasing demand, which is up 33% over the year per the company's data.
Reduced supply is also playing a role. Many hosts pulled their short-term rental listings during the pandemic, and overall supply has yet to fully recover. Overall listings are down 11.3% versus June 2019.
It's all good news for hosts who have stayed in the game -- particularly those in coastal destinations. Data shows rentals in these markets are seeing the highest occupancy levels. Hilton Head, South Carolina, for example, had an 83.4% occupancy rate in June, while Panama City, Florida's was 82.8%. Maui; Myrtle Beach, South Carolina; and Santa Rosa/Rosemary Beach, Florida, also had occupancy rates above 80%.
STRs in mountain regions saw the lowest occupancy levels in June. Both Breckenridge, Colorado, and Big Bear, California, had occupancy rates under 50%.
Rates are rising, too
Average daily rates also increased in June, according to AirDNA. The average rate overall hit $274.87 for the month -- a jump of nearly 10% over last year and a 22% hike compared to 2019.
In red-hot coastal markets, ADRs rose even more. The average rate there was almost $339 per night in June.
Rates jumped the most on one-bedroom/studio rentals, (up 13% to an ADR of $199 per night), followed by two-bedrooms (a nearly 9% increase). Homes with five bedrooms or more saw the least growth.
The bottom line
It's a good time to be a short-term rental owner. Not only are occupancy rates at their highest point on record, but daily rates are on the rise, too, delivering a one-two punch of profitability.
Haven't jumped into the STR investing game yet? It may be time. Study up on the pros and cons first, and use this guide to get started.