Despite a slight dip in demand growth in December, the short-term rental industry had a record year in 2021, according to new
research from AirDNA
.
Although the year started off slowly, new bookings began to rapidly increase in March and April, resulting in a 22.5% increase in nights stayed in 2021 compared to 2020 and a 2.7% bump over 2019 levels.
Revenues rose in tandem, with hosts charging significantly higher average daily rates (ADRs) and earning 37.5% more revenue than in 2020 and 25.8% more than in 2019.
AirDNA’s report points to several major drivers to higher ADRs, including a scarcity of available rentals in high-demand markets and the flexibility of work giving travelers the ability to travel outside of peak seasons.
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The recovery of demand in urban areas also allowed hosts to increase rates after dropping them in 2020.
Meanwhile, occupancy reached an all-time high of 60.8% in 2021, 14.1% higher than in 2020. Urban areas saw the biggest occupancy gains, jumping 19.3% year-over-year after falling by more than 17% in 2020 compared to 2019.
AirDNA expects occupancy levels to reduce some in 2022, due to new supply (predictions are a 15% increase in available listings in 2022), as well as difficulty in continuing to grow demand in some destination locations as travel patterns begin to normalize.
Listings, the report continues, lagged behind 2019 levels by 9.4% but increased 2.4% from 2020, with significant investments made in rural areas and small/mid-size cities. Throughout 2021, those areas increased supply by more than 11% of 2020 levels and are expected to see additional gains in 2022.
Supply also grew in destination/resort areas, with 5.2% more listings than in 2020. By the end of 2021, those markets had only just recovered to 2019 levels.
Omi’s impact
AirDNA reports that the Omicron variant has done little to slow short-term rental momentum moving into 2022.
In December, 3.6% more short-term rental nights were booked than in 2019 and 26.1% more than in 2020.
For the first quarter of 2022, nights booked are 71% higher than at the start of 2021 and 17% higher than in 2019.
The outlook for Q2 is even better, with booking pace 37% higher than in 2019 and 88% higher than in 2021. AirDNA’s current outlook calls for a 14.1% increase in demand year-over-year.
“All eyes are on the industry to see if 2022 can keep up the momentum,” says AirDNA vice president of research Jamie Lane.
“But as of January, the signs are good for a strong year, backed by continued economic growth and consumer confidence.”