AirDNA Market Review | U.S. January 2022

Surge of January Bookings Sets Up U.S. Short-term Rentals for Record 2022

January kicked off 2022 with a bang for new short-term rental bookings as travelers got a jump-start on booking spring and summer travel. AirDNA tracked more than 19 million nights booked in January, 41% higher than in January 2021 and 22% higher than in January 2020.

The strong booking activity sets 2022 up to be another record year for both nights booked and revenue. As of mid-February, travel for spring 2022 is pacing 70% higher than at the same time last year and 37% higher than at the same time in 2019.

This year should look similar to 2021, at least in the first half of the year, with small city/rural and destination/resort locations vastly outperforming large and midsize cities. Urban areas are pacing 26% lower than in 2019, which is in line with the past three months, down between 25% and 27%.

Destination/resort areas are pacing considerably higher than in recent months, with coastal areas pacing up 57% for spring vs. around 30% over the past few months. Mountain/lake destinations are pacing even higher, up 62% for spring compared to 2019, significantly higher than the 30% to 40% growth in recent months.

Sun & Ski Dominate January Travel

For January stays, Omicron did little to slow down travel. Nights stayed increased 47.9% in U.S. short-term rentals over 2021, 22% higher than at the same time in 2019. U.S. short-term rental occupancy hit a new record for January of 50.5%, up 10% from 2021. This was the first time ever that January occupancy surpassed 50%.

Guests looking for sun and the slopes drove the record occupancy levels in January. The top 10 highest markets for January occupancy were all in coastal destinations, with Hawaii again claiming the three highest occupancy markets, similar to last month. The top market from the AirDNA 2022 best places to invest report, Maui, HI, achieved the highest occupancy in coastal areas in January at 76%, 7.4% higher than in January 2019. Of the top 10 coastal markets, Punta Gorda, FL, had the highest growth in occupancy, with a rise of more than 35% compared to 2019.

Of the mountain destinations, Mammoth Lakes, CA, achieved the highest occupancy in January (68.9%), followed by Breckenridge, CO (63.9%), and Crested Butte, CO (63.8%). Occupancy for Crested Butte was 54.3% higher in January 2022 compared to January 2019.

The high occupancy levels in these top markets are driven not only by strong demand but a lack of supply growth and even declines in a few markets. The number of listings in markets such as Breckenridge and Lake Tahoe is significantly lower than ever. A variety of factors are combining to limit supply growth, including new regulation and a strong housing market that has increased competition for homes.

Most mountain/lake destination markets have been able to expand supply to capture more of the growing demand. Two destinations in the heartland of the country, Broken Bow Lake, OK, and the Ozark Mountains, have topped other markets in supply growth over the past year. The average number of available listings in each of these markets has increased more than 50% over pre-pandemic levels. Still, this pales in comparison to the more than doubling of demand over the same period. Other popular areas for new investment responding to growing guest demand include the Lake of Ozarks, Pocono Mountains, and North Georgia Mountains.

New Listings Growth Hits Pre-Pandemic Peak

Overall strong demand for short-term rentals, combined with record-high average daily rates (ADRs), has made it very attractive for investors to add additional short-term rental inventory. In January, 58,000 new short-term rentals were added in the U.S. This was the most added in a single month since the start of the pandemic.

The new additions bring the total short-term rental supply to more than 1.5 million for the first time ever. The number of listings grew 13% over the past year, the fastest rate of growth since 2019.

ADRs Continue to Climb 

After a 7% year-over-year increase in ADRs in January 2021, ADRs for short-term rentals continued to accelerate in 2021, growing by 18% in the last year to reach an average of $264.60. With the combination of higher ADRs and occupancy, the average revenue earned per night jumped 30% in January 2022 over just the past year.

January 2021 was a comparatively weak month for ADR growth compared to the rest of the year, so ADR growth should moderate throughout the year. Currently, ADRs for spring travel (March/April) are pacing 15% higher than last year, but ADRs for summer travel are up just 5%.

Strong Outlook and Top Spring Break Markets

Americans are ready to travel again in 2022, as evidenced by strong booking to start the year. Top markets for spring travel in 2022, in terms of nights booked for March/April travel, include:

1. Orlando, FL
2. Phoenix, AZ
3. Sarasota, FL
4. Maui, HI
5. Cape Coral/Fort Myers, FL

Booking pace for each of the markets is trending significantly higher than in prior years. New York and Los Angeles, while traditionally popular for spring travel, are still lagging behind, with their bookings 40% to 50% lower now than they were at the same time in 2019.

When we look at the largest markets—the areas with the greatest increase in bookings in 2022 over 2019—it’s obvious that guests are booking further in advance for popular spring break destinations.

Bookings for spring travel in Gatlinburg/Pigeon Forge, TN (+204%), Panama City, FL (+111%), and Santa Rosa/Rosemary Beach, FL (+110%), all have more than doubled over 2019. Big Bear, CA (-14%), and Cape Cod, MA (-17%), are the only two markets pacing slower than last year, which may be initial evidence of some markets reverting back to traditional seasonal patterns.

Absent another deadly wave of the pandemic, a recession, or any other unforeseen event, 2022 should pan out to be another record year for U.S. short-term rentals. We expect demand will continue to climb, with a potential lag in supply growth presenting the only foreseeable speed bump.