The delta variant has coronavirus cases surging in many parts of the country, but apparently, it can’t slow down the travel industry -- at least not short-term rentals (STRs).
According to two new reports, short-term rental bookings are going strong. Guesty, an STR management platform, shows reservation volume is 122% higher than this time last year. Additionally, nightly rates are up, too, jumping 33% over 2020 and 23% over 2019.
AirDNA, a short-term rental data firm, shows similar trend lines. In July, STR occupancy was at 74.9% -- the highest point on record. In some markets, it was as high as 88%.
Do you own an Airbnb or short-term rental? Curious what’s in the cards in the coming months? Here’s what you need to know.
STR travel still going strong
The pandemic hit many short-term rental investors hard last year, but it appears those days are gone. As Guesty’s report put it, "Despite the threat of variants such as delta, consumers are still willing to travel."
The holidays are gearing up to be especially good for investors. According to Guesty’s data, Labor Day prices are higher than those seen on July 4th ($314 vs. $277 per night, on average). It’s also a 29% jump from last year’s Labor Day and a whopping 52% increase over the year prior. Reservations for this time period are up 89%.
Here’s what other holidays and seasons are shaping up to look like:
- Thanksgiving: Reservation volume is up 81% compared to last year and 26% over 2019. The average nightly rate is a jaw-dropping $436, and according to the report, "These prices will only rise, as consumers are booking far in advance."
- Christmas: Reservations are up 100% over the year and 42% compared to the year before. It’s projected to be the most expensive holiday period of the year, with rates up 82% compared to pre-COVID times. The average nightly rate is currently $602, which, again, could increase as we get closer to the holiday season. (It was just $331 in 2019).
- Summer 2022: Reservations for next summer are already 6% higher than the bookings seen this summer or summer 2020.
If the numbers look shocking, particularly on price, AirDNA says there are several reasons. For one, consumers are trending toward larger properties with more (and nicer) amenities. They’re also focusing more on destination and resort areas, which often charge a higher rate, especially around high-demand holidays.
What about cancellations?
The above numbers are all positive, but don’t forget: Cancellations do (and will) happen. While people are still booking forward-looking trips, according to AirDNA data, they’re also canceling current ones.
In July, data shows that 20% of nights booked were canceled -- a big jump from May’s 13% cancellation rate, though much lower than the 121% peak seen last March. During the last COVID surge (November), cancellations jumped to 29%, so that may be more where today’s rate is headed -- at least if the current rise in cases continues.
Another stat to note: New bookings slowed by about 5% in July. Despite this, there’s still room for optimism.
Here’s how AirDNA put it: "Even with demand showing some slight weakness as COVID-19 cases rise again, the outlook for the rest of the summer and fall still looks promising, though it may fall short of our initial projections."
The bottom line
The future of the short-term rental industry is looking pretty good, by current numbers. While the delta variant and resulting COVID-19 surge may put a small damper on things, the upcoming holidays should remain busy for most STR investors.