DENVER, June 15, 2023 /PRNewswire/ -- AirDNA, the leading provider of short-term rental (STR) data and analytics, today unveiled its mid-year outlook report for 2023, demonstrating that the industry continues to thrive as consumers prioritize travel despite economic uncertainties. As CEO Demi Horvat and Chief Economist Jamie Lane presented at Skift's STR Summit earlier this month, AirDNA's demand forecast for 2023 has increased to 10.4% year-over-year (YoY) growth, doubling expectations from the start of the year.
Where higher mortgage rates have slowed new investments, current homeowners have stepped in, adding new listings to preserve ownership and capitalize on existing low interest rates. This shift has pushed annual supply growth to 14%, up from a more conservative previous prediction of 9%. AirDNA forecasts a second year of declining occupancy, though to a lesser extent than previously forecasted, remaining well above pre-pandemic levels at 57.6%. Occupancy rates are strong outside of the peak summer months, with growth in the shoulder and off-seasons empowering hosts to strategically boost revenue throughout the year.
"A headwind affecting demand growth is the slow return of international travel. While the strong dollar means Americans have re-embraced traveling abroad, inbound travel remains low," said AirDNA's Chief Economist Jamie Lane, "If this deficit closes, there is a huge opportunity for the largest cities, where foreign guests represented more than 20% of STR demand pre-pandemic."
The outlook varies by location: small and midsize cities are set to continue their growth, with revenue per available rental (RevPAR) growing 3% in 2023. However, occupancy pressures in coastal and mountain or lake destinations and rebalancing demand from suburban to urban areas will cause RevPAR nationally to reduce slightly (-1.1%) in 2023. Hosts and property managers should keep a close eye on the data to beat the competition and protect their revenues.
"We're forecasting STR revenue to reach $78 billion by the end of 2024, up from $39 billion in 2019. While this growth can be variable in terms of who's seeing it and who's not, broadly, we think this paints a very positive picture," commented Demi Horvat, AirDNA CEO, "As strong believers in informed decision-making, our mission is to empower industry stakeholders to navigate this dynamic and changing environment with accurate data and trusted insights every step of the way."
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