When investing in a European holiday rental, location can make all the difference in the success and potential revenue that one can generate. How then, do you determine the most profitable places for a short-term rental investment in Europe? At Beyond, we use revenue per available night (RevPAN) and occupancy rates to determine the best places to invest in short term rental (STRs).
By using RevPAN, we can make the most accurate comparison by measuring revenue per night based on available nights. An STR, for example, might earn £10,000 one month and £20,000 the next. However, if the available nights to rent the STR also doubled in the second month, those months would reflect the same RevPAN. (For a more detailed explanation of RevPAN, check out our breakdown.)
In the next two blog posts, we’ll use the latest Beyond data to identify the most profitable European holiday markets to invest in, comparing the last 12 months to the previous13-48 months. On average, these destinations had a 48 % increase in occupancy rates and a 77% increase in RevPAN.
Let’s jump in, starting with the first 6 places on our list. All prices and percentages quoted below come from Beyond’s database and are for average nightly stays in a 2-bedroom rental.
12. Nice, France
First up on our list is Nice, located in the beautiful French Riviera. With something for everyone to enjoy, Nice is a great place to enjoy some sun, explore the outdoors, relax on the beach, and indulge in great food. Attracting tourists from all over the world, it’s a great place if you're looking to invest in a European holiday rental.
Occupancy remained at a stellar 54% in the first few months of 2021. A 24% annual jump in price translated to a full 61% jump in RevPAN, for an average of £110. Not bad at all!
Iceland is known for its dramatic landscapes, culture, hot springs and volcanoes! Despite this wild land being one of the most sparsely populated countries in Europe their tourism industry is booming. Many flock to Iceland hoping to catch a glimpse of the North Lights. Reykjavik is known for its arts, food, music, museums, outdoor pursuits, and other cultural attractions. Ever-exciting, Reykjavik embraces its Viking heritage exemplified at the world-famous National and Saga museums.
In Reykjavik, occupancy levels rose by 31% and RevPAN rose by 39%. Rural Iceland’s occupancy rates rose to 61% in 2022, a 39% jump from the previous year. Concurrent with that leap, RevPAN for a rural Iceland STR went from an average of £79 to £117, a 50% increase over the previous year.
10. Lugano, Switzerland
Whether your ideal holiday is skiing all day in the Swiss Alps, multi-day hikes or days spent on the water you will not be disappointed in all that multicultural Lugano has to offer. Sitting in the south of Switzerland’s Italian-speaking Ticino region, its Swiss-Mediterranean mix of cultures is closely related to that of Italy’s northern Lombardy region. This mix is reflected in its architecture and cuisine. The city stands on the northern shore of glacial Lake Lugano, surrounded by mountains.
With an average RevPAN of £109 so far this year, a 26% bounce up from 2021 rates, it’s also a great time to invest in an Airbnb or a holiday rental in one of Lugano’s many apartments or mountain cabins. And with it’s all around seasons you will never find your investment empty.
9. Glasgow, UK
Glasgow sits on the edge of the ancient River Clyde is home to art, culture, and more history than you could ever hope to consume. This city is also the most populated city in Scotland and 27th most populated in Europe. Glasgow solidified its status as a tourist hotspot in 1988 when it hosted the Glasgow Garden Festival. This legacy continues today with the city being named the European Capital of Culture to 1990. In 2008 the Glasgow was listed by Lonely Planet as one of the world’s 10 tourist cities. So, when looking to invest in or diversify your portfolio, Glasgow is one of the best UK holiday markets! Occupancy levels in the first few months of 2022 rose to a very healthy 60% with RevPAN more than doubling from £58 to £90, a 55% increase.
7. Lisbon, Portugal
From Glasgow, we move again to somewhere completely different. Lisbon is the capital of Portugal and lies in the western Iberian Peninsula on the Atlantic Ocean and the River Tagus. The westernmost portions of its metro area, the Portuguese Riviera, form the westernmost point of Continental Europe, culminating at Cabo da Roca. White sands, turquoise blue seas, and palm trees, the beaches of Lisbon from Cascais to Estoril could be mistaken for the beauty of the Caribbean on a macro level.
Surf, sand, and endless fun add up to excellent STR opportunities. Limited, in-demand land means higher rental prices especially as the pandemic’s opening has created enormous opportunity for Lisbon. RevPAN rose from £41 in the beginning of 2021 all the way to an average of £74 in 2022, an 80% jump.
6. Manchester, UK
Manchester, known as the “Venice of the North” boasts over 36 miles of canals. In 2021 more than 17 million people in Britain visited a canal. Walkers, boaters, joggers, anglers, and cyclists are being attracted to the nation’s waterways in record-breaking numbers. Unsurprisingly, occupancy levels in the first few months of 2022 rose to 65% giving those with holiday homes in the area a very healthy return on their investment, this equates to a RevPAN growth of 63% from £61 to £99. This makes Manchester a fantastic UK holiday market to invest in!
Up next, we’ll travel exclusively to southern Europe, taking in Italy, Spain, and Andalusia. Continue reading about the hottest European holiday markets by taking a look at our next blog post with apart 2 of our list of the best holiday markets in Europe in which to invest in. For other resources, check out our blog for the latest news and insights about the holiday rental industry or contact us to learn more!