5 Airbnb Trends DMOs Need to Watch in 2023 | AirDNA

For destination marketers and tourism pros, vacation rentals have been on a tear since the height of the COVID-19 pandemic.

• Since a brief blip in 2020, the supply of vacation rentals has skyrocketed by over 50%.
• Revenue earned by vacation rentals has grown by 25% yearly since 2020. 
• The share of total vacation rentals bookings compared to hotels has nearly doubled since 2018. 

While this seems like impressive growth, most DMOs need more intel.  

It doesn’t cut it to simply report to your board that “there are a lot of vacation rentals” or “travelers are booking STRs more than they used to.”

Here are five trends defining the short-term rental (STR) industry right now. Use these as talking points in your next conversation with stakeholders, and you’ll set yourself up for success.

Trend #1: Flexible Travel Continues to Impact Demand

A new wave of flexible, long-term travel is one of the major trends driving today’s STR demand.

Hybrid travel. Extended work trips. Globetrotting nurses and construction workers. In other words, “bleisure” or “mullet travel” (our personal favorite) is leading to more longer-term stays. 

Whereas stays of 28-plus days accounted for 14% of all stays back in 2019, today they are over 20%. And destinations that are not prioritizing this mid-term stay demographic will be missing major opportunities in years to come. 

What’s more is that occupancy rates—a property’s total number of reserved days divided by its total number of available days—are stronger now than before the pandemic. This is, in part, because demand for rentals has skyrocketed versus 2019.

But demand often brings about even more supply. Which is exactly what happened in late 2020 and 2021. In the U.S., historically low interest rates fueled a real estate gold rush. Plus, rentals proved more resilient than traditional lodging during the height of the pandemic too.

In short: It was tempting to join the Airbnb game, and thousands of aspiring rentalpreneurs did just that. That’s why occupancy rates have slightly declined. Travelers have more options, and hosts have more competition.

It’s super important for any DMO to keep track of local occupancy trends. It can help you manage the problem of overtourism because you’ll know which areas are most vulnerable. You’ll also be able to forecast with confidence. And just like a host or investor, why wouldn’t you want to know how much money you stand to make over the next 12 months?

Trend #2: Flexible Search Has Opened More Destinations

In case you’ve missed it, Airbnb has effectively changed the way people search for travel. 

Whereas before, travelers had a destination in mind and then began their accommodation search, today, it’s reversed. The accommodation—and all the glitz, glamor, and uniqueness that comes with it—often overshadows the location itself. 

As a result, we’re seeing major upticks in demand for locations that were previously overlooked. Areas that were nowhere near the top of travelers’ minds are now popping up as compelling suggestions. 

Case in point: Small rural towns are now seeing 159% more demand than they did in 2019.