Business & Investment

Will 2021 be a great year for short-term rentals?

The travel industry was hit in 2020. United Nations World Tourism Organization, Global export revenues fell by an estimated $ 1.3 trillion due to a decline in international travel. This shrinkage has caused many people to do their jobs, and the tourism-dependent communities have declined.

Logically, many owners of short-term rental (STR) properties were concerned that the damage to the tourism industry would be to them. Without reservations, many small and medium-sized investors will face ongoing costs without income. Fortunately for many STR owners, the worst did not happen.

by Data from STR.com and AirDNA, Revenue per available room (RevPAR) decreased by only 4.5% in the first half of 2020 compared to 2019. Although numbers have declined, the same study shows that hotel RevPARs declined by nearly 65% ​​over the same period. Same market. So, relatively speaking, the STR survived the 2020 storm better than the hotel.

According to the property management company Guesty, 2021 may be an even better year for STR.

In total, the number of reservations for the summer of 2021 in the United States has increased by 110% compared to the summer of 2020 (this includes June, July and August). Of course, a recovery from 2020 is expected, but it will be even more encouraging. The fact that bookings are currently 6% higher than pre-COVID levels in 2019.

As your average length of stay and income increase, so does your income. For example, the average booking for August 2021 is 10% longer, with 8% more revenue than August 2020.

The data also suggest that Americans are ready to enjoy their vacation again. Anniversary reservations have increased by 71% compared to this point last year, and July 4th reservations have increased by 50%.

Other indicators show that 2021 should bring a strong recovery to the tourism sector.

According to the Transportation Security Administration (TSA), the number of people passing checkpoints is steadily increasing until the first quarter of 2021. The numbers are still about 38% below 2019 levels, but are steadily increasing. This seems to be a combination of recovery and normal seasonality.

For those who have already invested in STR, all this data is good news. Combined with a strong unit economy and a macroeconomic tailwind, 2021 could be the best year ever.

For those who are interested in STR but haven’t invested yet, now may be a good time to dive into this new strategy.

Will 2021 be a great year for short-term rentals?

https://www.biggerpockets.com/blog/short-term-rental-recovery Will 2021 be a great year for short-term rentals?

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