Short-term rentals (STRs) had a weird month in February. On one hand, demand plummeted. According to STR data firm AirDNA, demand for U.S. short-term rentals fell -27.5% over the year. In the 50 biggest cities, it dropped a whopping -55%. In terms of short-term rental demand, it was the worst month since the pandemic began, AirDNA says.
Demand fell the most in San Jose, California, where it plummeted over -76%. New York City, San Francisco, Los Angeles, and Boston weren’t too far behind.
Fortunately, “demand” just speaks to current performance -- how many Americans are using short-term rentals now. If you look ahead at bookings and future travel? The data tells a much different story. Here’s what you need to know.
Demand down, new bookings way up
February saw quite the chill in the STR market, but AirDNA’s data offers reason to remain hopeful. According to the latest monthly review, while demand fell considerably for the month, new bookings actually skyrocketed.
It’s true: Bookings hit an industry record in February, according to AirDNA. So far, March is already 43% occupied and only has a mere 9% fewer bookings than March 2019 -- apparently a “significant” improvement over both January and February.
“Never before have we seen such a large delta between current industry performance and that of new monthly bookings for future travel,” Jamie Lane, vice president of research at AirDNA, said of these results.
Another reason to be optimistic? Daily rates are up, too. In large cities, average daily rates (ADRs) were up 2.3% in February. The bumps were biggest on large properties -- those with three-plus bedrooms. Smaller properties, such as one-bedrooms, studios, two-bedrooms, and shared units, actually saw ADRs drop more than 5% for the month.
The bottom line
Last month was a weak one in the STR market, but there’s still much to be excited about if you’re a short-term rental investor. Bookings are up, rates are rising, and as vaccines roll out and travel restrictions lift, interest in short-term rentals should continue to strengthen.
Here’s how the report put it: