What’s actually going on this summer for short-term rental markets in the U.S.? With conflicting reports, different data sources, and cherry-picked data & trends, it’s difficult to know where your vacation rental business stands. However, our extensive data from pricing hundreds of thousands of listings globally, allows us to get more definitive answers as to how short-term rentals (STRs) are performing in summer markets across the U.S.
We’ll get into specifics below, but the short answer: it’s complicated. We can see right away that vacation rental hosts and property managers need to start using new tactics and strategies in order to gain success in this ever-changing landscape.
One key to unlocking more money and better performance for your vacation rental business this summer? Search data. By leveraging search data to power your vacation rental pricing, you can make more proactive, informed decisions and see tangible results – how does 9% higher RevPAN (revenue per available listing) sound?
Let’s take a look at three macro trends for U.S. summer markets this year, and how search-powered pricing and advanced insights are key to your success.
Macro Short-Term Rental Trends Across the U.S. This Summer
Trend #1: Increased Supply = Increased Competition: Unfortunately, this trend isn’t going anywhere. We are continuing to see the same supply increase now that we have seen in the last few months. In the U.S., there are about 729k Airbnb hosts in the U.S., and there are 1.3 million listings on Airbnb today - a 16.7% increase from the beginning of 2023.
We can also see that these listings are getting more competitive, offering more amenities, and stepping up their game in order to better attract guests:
- 3% of Airbnb hosts are Superhosts
- 82% of Airbnbs are full houses and 17% are rooms
- 32% of Airbnbs allow pets
Trend #2: Property Managers and Owners Holding on to Higher ADRs: Average daily rates (ADRs) in 2023 are only starting to come down for peak summer and are 2.5% below last year. However, ADRs in May came down 5.3%, while June is down just 1.8% and August is only down 1.4%.
Based on this data, we can see that most property managers are holding out hope that they might get booked at high rates. We also know that owners can be behind these optimistic rates, so having conversations about changing prices is imperative to be able to adjust your strategy in time to capitalize on current demand.
Trend #3: Those Higher ADRs Affect Occupancy Rates: While rates are down slightly year-over-year, they are still high and that has had an impact on occupancy for summer: Occupancy is down 3.3% from last year at the same time, with early June suffering the worst. Additionally, the U.S. is only up 1% when compared to pre-pandemic occupancy levels in 2019.
With search data powering your strategy, responding to macro trends like this is simplified. You can pinpoint how your specific market is behaving, what your potential guests are searching for, and take action to stand out from the competition. Read on to see how to combat these trends!
Responding to Macro Trends With Search Data (+ Examples!)
With search data powering your revenue management strategy, you stand to increase bookings and revenue because you can get ahead of trends like these. Search data is future-facing data, meaning that your strategy instantly turns from reactive to proactive. Additionally, you can drill down into your guest booking habits and how your specific market is behaving, and use that data to fuel your decision-making and lead owner conversations.
1. Avoid Sacrificial Bookings
Search data is a valuable resource that provides insights into the preferences of potential guests before they make a booking. By analyzing this data, property managers can identify trends, adjust their strategies, and prevent a loss in bookings. For example, if search data reveals that guests are searching for shorter stays than the minimum requirements set, property managers can adapt their offerings accordingly. Now, property managers no longer have to miss out on potential bookings.
2. Beat Your Increasing Competition
We already know that most markets are facing oversaturation, so let’s drill down and focus on U.S. Coastal Markets to get a better understanding of how a property manager can mitigate this issue with search data.
When analyzing the revenue per available night (RevPAN), pacing in these markets compared to the previous two years, it becomes apparent that there is a stagnation in demand due to an oversupply of properties. As a result, the pacing from now until the peak summer season is declining. Specifically, when examining the performance around the July 4th holiday, the weekdays are not following the usual trend and are disappointing. This is primarily caused by the overpricing of the entire "July 4th period" instead of focusing on the specific days when people want to travel.
Property managers who utilize search data in their pricing strategies have already adjusted their rates weeks ago to account for this trend. As a result, they are able to secure bookings and avoid missing out on potential guests. By relying on search data, property managers can gain a more realistic and up-to-date understanding of the future demand, rather than relying solely on overly optimistic or outdated data.
3. Make the Most of Existing Demand
With short-term rental markets behaving the way that they are, it’s important for property managers and hosts to get the most value they can out of existing demand in their areas. Search data from Beyond feeding into your revenue management strategy means that your rates automatically adjust in real-time. By analyzing both longer-term trends and daily search patterns, our algorithm immediately identifies changes so that you're listed at the best price. We also catch any new changes to demand instantly – so if a new concert gets announced and people start heading to your website, our system increases the pricing right away.
To see this in action, let’s look at a real Beyond customer located in the Georgia Mountains that recently received a June booking on their 3-bedroom rental. Since they are using Search Powered Pricing, our algorithm positioned their rental at the best price, and their booking came in at a 23% higher rate than it would have without search data. This is 10% higher than they got last year in the same month. In fact, nights priced with Search Powered Pricing from Beyond see a 15% increase in booked reservations' Average Daily Rates (ADR).
4. Know Where to Invest for Maximum Payoff
Search data reveals where to reinvest your profits for the highest return. As an example, let’s look at Beyond customer, Kauai Kahuna Vacation Rentals. Since implementing search data from Beyond, the team at Kauai Kahuna Vacation Rentals appreciates having the data to back up decision-making that will generate more revenue.
“Adding search data into our revenue management is such a game changer. Early data about what people are searching for showed us that we could be charging substantially more per night for units that have air conditioning, which is intuitive, but hard. Data is a better decision-making tool than intuition,” said Daniel Landis, General Manager at Kauai Kahuna Vacation Rentals. “We can quantify the potential revenue increase, and now we’re focused on using these insights to talk with owners who have been on the fence about installing air conditioning, and we have the data to support why they should do it.”
Right now, the short-term rental market can feel hectic, unpredictable, and an around-the-clock operation. It’s vital to have access to the right tools and data to keep up with demand and maximize revenue. Search data has the ability to radically change your business – it’s a definitive source of insights specific to your market and guests that cuts through the noise of other reports and data sources.