Exploring 2023 Rental Statistics from AirDNA
Exploring Vacation Rental Insights from 2023
There’s no arguing that the vacation rental industry has experienced major shifts over the past few years, and no one has covered the changing conditions of the market better than the AirDNA blog. Each month, they provide readers with statistics on the short-term rental industry’s growth or losses, allowing owners to better understand the reasons behind the constant ups and downs of the market.
Recently, AirDNA released a report detailing important 2023 short-term rental statistics, and today, we’ll be sharing some of their insights with you, along with information about how these statistics are relevant to you as an individual property owner. Join us as we dive deep in 2023’s market and see how it fared.
How is the Short-Term Rental Industry Faring Overall?
According to AirDNA’s 2023 report, the US vacation rental industry has reached a larger market size than ever before, boasting an impressive total of 64 billion dollars in revenue. Because the revenue of the short-term rental industry has grown so much, it has now become a well-known alternative to traditional hotels and resorts, with many travelers turning to Airbnb and Vrbo first when starting their vacation planning.
Not only that, but the number of hosts and listings has grown at a staggering rate as well: AirDNA reports that the total number of hosts grew to over 785,000 individuals in 2023, while the number of listings increased to 2,459,260. This means that competition is now at the highest level it has ever been, which has led to some declines in RevPAR and occupancy year-over-year for 2023. For new short-term rental hosts, the immensity of the industry has led to some challenges over the last year or so, and more and more hosts are looking for ways to give themselves a leg up on the competition.
Overall, however, the sheer size of the market has been a boon for the industry, which now has a larger market share and more consumer respect than ever before. Rather than being a niche or obscure alternative to the traditional hospitality industry, vacation rentals have become a category of their own, and they are expected to keep growing in the coming years.
Exploring 2023 Total Vacation Rental Nights, Pricing, and Revenue
Guest traffic is at an all time high according to AirDNA, who reported the total number of nights in 2023 as an immense 207 million. Guests are flocking to vacation rentals at a higher rate than ever before, but due to the amount of supply in the industry, individuals might not be seeing this growth like they did during the booming post-pandemic period. Fortunately, there are many ways you can improve your short-term rental business to bring in more visitors and revenue–click here to find out more about how to market your vacation rental like a pro.
When it comes to pricing, AirDNA reports that the overall average price of a vacation rental in 2023 hit $308 for a night, while individual hosts were able to reach $26,204 in average revenue. Having an excellent pricing strategy is now a necessity for short-term rental owners who are hoping to rake in the revenue–more and more these days, pricing is the number one reason why frugal and money-savvy travelers are choosing their short-term rental, rather than other factors. These figures also demonstrate that most vacation rental owners aren’t making hundreds of thousands of dollars each year, and if you’ve earned more than the average, you know you’re doing better than the competition out there.
Forecasting for 2024: Vacation Rental Industry Predictions
2024 is still in its first quarter of the year, but that doesn’t mean that AirDNA skimped on forecasts for how this year will play out. However, they did report that there are a number of factors that will affect the vacation rental industry, such as lower inflation rates, thriving wage and productivity growth, and a slightly more affordable housing market. Together, these factors could lead to increased demand, as well as better conditions for both hosts and guests to thrive.
AirDNA also reported that supply and demand are both expected to grow 10% in 2024, which will help to balance out the overabundance of supply that was seen in late 2022 and for most of 2023. Meanwhile, average overall occupancy is expected to stay stable at 55%, where it has sat for quite some time.
All in all, 2024 is shaping up to be a good year for the short-term rental industry, but it may never reach the same heights that it did in 2021 and 2022 again. That’s to be expected, however–the conditions that led to the boom in prior years are unlikely to coincide again in the near future.
Let the Experts Handle the Market Analysis with LocalVR
2023 was overall a good year for the vacation rental industry, even with losses in occupancy and RevPAR that many hosts saw. The future is looking bright as well, with supply and demand expected to come into better balance in 2024. Rather than looking back at 2021 and 2022 with rose-colored glasses, it’s better to gaze into the coming years with an optimistic viewpoint.
Not having an easy time making sense of short-term rental statistics on your own? Think about looking into LocalVR’s expert vacation rental property management services, where our revenue experts can break all of this information down for you with ease. Click here to learn more about LocalVR.