If your short-term rentals are tracking behind 2021’s numbers, know that you’re not alone. And there may be no need to sound the alarms. The COVID-19 pandemic has subtly and not-so-subtly impacted the vacation rental industry, and your business may, in fact, be faring just fine.

Don’t Panic: Your Airbnb Booking Numbers May Be Better Than You Think

The past two years—2020 and 2021—were anomalies for the short-term rental (STR) industry. Think of 2020 as the inhale (travel restrictions, trip cancellations, and the lack of COVID-19 vaccines) and 2021 as the exhale (fewer restrictions, full-on travel fever, and wider vaccine access).

As an STR host, your revenue may have suffered in the first half of 2020, only to bounce back better than ever in 2021.

But now it’s late 2022, and you’re not sure how your business is faring. You may have even noticed soft bookings during otherwise peak seasons. If you’re tracking ahead of 2019’s numbers but behind 2021’s, know that you’re not alone. And there may be no need to sound the alarms. As always, the devil’s in the data.

2019 is a better vacation rental performance benchmark than 2021

At AirDNA, 2019 is our preferred benchmark when comparing present and past performance. It’s still interesting to see how your numbers stack up against the last two years, but take the results with a grain of salt. And if you became a host during the pandemic, you may have unrealistic growth expectations due to your small (and admittedly strange) sample size to date.

By many measures, 2019 was a strong but normal year for STRs. Most importantly, booking activity was untouched by the impending pandemic. If your revenue, occupancy, average daily rates (ADRs), and other key metrics are pacing ahead of 2019 but behind 2021, don’t panic; your business is likely doing just fine. (Just make sure to adjust your rates according to local trends.)

The STR industry is experiencing corrections, not recessions

While there’s been a lot of recession talk in recent months, there’s no evidence to suggest the STR industry is about to take a nosedive. (In fact, demand is currently through the roof, but more on this later.) Instead, our data indicates many markets are experiencing corrections, not recessions.

Last year’s travel boom prompted an uptick in STR supply. Lots of aspiring hosts figured it was a smart time to get into the game, and they weren’t necessarily wrong. But supply has, in turn, outpaced demand throughout 2022.

For example, in June 2022, STR supply in the United States grew 25.4% year over year (YOY), while demand only grew 16.3%. Make no mistake: This is incredible demand growth. But when supply is simply growing faster than demand, occupancy typically suffers (to the tune of -9.2% in June).

It’s becoming increasingly difficult for 2022 to keep pace with 2021, which is why we recommend measuring your occupancy levels today versus the same period in 2019. Nationally, STR occupancy was actually 8.6% greater in June 2022 than in June 2019. And ADRs are strong as well. They’re up 4.5% versus June 2021 and a whopping 29.5% over June 2019.

(In other good news, U.S. unemployment is low, consumer spending is diverse, and oil prices are steadily declining.)

Trust data to succeed in any economic climate

Being an STR host today can be more lucrative than ever before. The key, as always, is to ensure you’re using data to strategically adjust your rates and offerings based on the current competitive climate in your market—not benchmarking against how an outlier year performed.

If you’re new to STR hosting, brush up on these 13 tips that will make your guests (and pocketbook) happier.

If your bookings are down, check out our guide for how to bounce back stronger and smarter.

Remember that STR travelers today are different than those from five or 10 years ago. To make sure your fingers are on the pulse of the current scene, be sure to review this recent blog on evolving STR guest trends.

Lastly, we just improved the Rates tool in MarketMinder™, our industry-leading data tool designed specifically to help hosts like you achieve financial freedom through accurate insights. Check it out to see how your market performed pre-, during-, and post-pandemic.

Don’t Panic: Your Airbnb Booking Numbers May Be Better Than You Think

ARTICLE SUMMARY

QUICK NAVIGATION