You are using an older browser version. Please use a supported version for the best MSN experience.

Short-Term Rental Demand Surpasses 2019 Numbers -- but There's 1 Problem

The Motley Fool logo The Motley Fool 5/18/2021 Aly Yale
Short-Term Rental Demand Surpasses 2019 Numbers -- but There's 1 Problem © Provided by Millionacres Short-Term Rental Demand Surpasses 2019 Numbers -- but There's 1 Problem

There’s no doubt about it: Short-term rentals have officially bounced back (and then some) from the pandemic.

According to the latest data from AirDNA, a short-term rental data firm, demand for short-term rentals is now up 66.4% over 2020’s numbers as of April 2021 and 5.4% compared to 2019. The only problem? There’s just not enough supply to meet it.

“Higher levels of demand are putting pressure on short-term rental booking platforms like Airbnb (NASDAQ: ABNB) and Vrbo to rapidly increase their supply,” AirDNA reported.

It’s true: Airbnb CEO Brian Chesky even said so himself, telling CNBC the site needs millions of more hosts just to keep up with demand. Vrbo is also actively trying to pull hosts away from its competitor for similar reasons.

The investment opportunity

For investors, the high-demand, low-supply scenario presents a prime opportunity, especially as the summer heats up.

The report reads:

Booking pace for this summer rose even further in April, with all months now at or above 2019 demand levels. As of May 1st, June has 25% more demand booked than as of the same time in 2019. While demand is strong today, performance is expected to continue to improve throughout this summer with more and more countries and markets able to attract visitors and participate in the recovery.

If you’re looking to invest, data shows that mountain and beach towns are performing best. Demand growth is particularly strong in the following locations:

  • Gatlinburg/Pigeon Forge, Tennessee
  • Gulf Shores/Mobile, Alabama
  • Myrtle Beach and Hilton Head, South Carolina
  • Santa Rosa/Rosemary Beach, Florida
  • Panama City, Florida

In Gatlinburg, demand was actually up 69% in April, and Hilton Head is already 80% occupied for June.

The only areas not seeing short-term rental demand grow are the large, urban ones. In New York and Boston, for example, demand is down 74% compared to 2019’s numbers. Washington, D.C., has also seen a steep drop since the pandemic.

The bottom line

As Jamie Lane, VP of research at AirDNA, put it, “The search for new hosts is heating up.” If you’re looking to seize on the growing demand for short-term rentals, make sure to choose your market carefully, and stay in tune with STR travel trends. Post-pandemic travel looks a bit different than it has in years past, so you’ll want to be sure your property falls in line.

Finally, be ready to put some time and money in. It’s a hot market out there, and unless you’re willing to make a cash offer, expect some serious competition when buying a new property -- especially one in a vacation town.


Video: Unpaid taxes cost the U.S. $1 trillion a year (MSNBC)

UP NEXT
UP NEXT
SPONSORED:

Unfair Advantages: How Real Estate Became a Billionaire Factory

You probably know that real estate has long been the playground for the rich and well connected, and that according to recently published data it’s also been the best performing investment in modern history. And with a set of unfair advantages that are completely unheard of with other investments, it’s no surprise why.

But those barriers have come crashing down - and now it’s possible to build REAL wealth through real estate at a fraction of what it used to cost, meaning the unfair advantages are now available to individuals like you.

To get started, we’ve assembled a comprehensive guide that outlines everything you need to know about investing in real estate - and have made it available for FREE today. Simply click here to learn more and access your complimentary copy.

The Motley Fool has a disclosure policy. Editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from Millionacres is separate from The Motley Fool editorial content and is created by a different analyst team.

AdChoices

More from The Motley Fool

The Motley Fool
The Motley Fool
AdChoices
image beaconimage beaconimage beacon