Market Pulse: A Snapshot of the Short-Term Rental Market

Masterclass Tabatha Wild

By The Hospitable Team

Any business decision should be based on reliable market trends and customer behavior data to stay competitive in the short-term rental industry. Since navigating the complexities of the rental market can be challenging, the latest Hospitable Masterclass will help hosts stay ahead of current market dynamics and optimize their rental strategies to enhance competitiveness.

Our special guest on the Masterclass was Tabatha Wild, Business Development Manager at Key Data, which provides business intelligence and benchmarking tools for the vacation rental space. Tabatha shared actionable insights into market trends and explained what performance metrics you should track to benchmark against competitors and pinpoint areas for improvement. She also suggested some strategies that you can use to respond to current market trends.

Watch the full Hospitable Masterclass to discover the latest insights into the North American short-term rental market and use them to adjust your strategies to ensure your properties remain attractive and profitable throughout the year.

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Short-Term Rental Data for the US Market

Tabatha begins her presentation by explaining why Key Data is a trusted source of market insights. She points out that they directly source their data from over 60 property management systems, including Hospitable. “All the data we’re looking at today will be direct-source data. It’s all aggregated daily in real-time, and then those KPIs and visualizations we’ll look at are instantly updated,” she clarifies.

While discussing the direct data on supply vs. demand in the US as of January 2024, Tabatha points out that “supply and guest check-ins have increased but not at the same rate. So since supply grew quicker, the US short-term rental market experienced a negative guest check-in per property.”

In the first half of 2024, all regions saw more substantial supply growth than demand growth, except Hawaii, which remained relatively flat in supply with a decline in demand growth. The Midwest states’ supply grew by 11%, New England and the Rocky Mountain territory by 4%, the Southwest US by 6%, and the Western US by 8%. Guest check-in rates stayed between 1 and 2% across the board again, except for Hawaii. This imbalance leads to decreased occupancy.

US Vacation Rental Performance

Data on booked nights as of June 16th, 2024, in the US show that the short-term rental market is pacing down. Midwest US is the only region pacing up for the summer, and Hawaii Islands are still struggling to recover after last year’s fires and are working through recent STR regulations. Tabatha notes that the best practice here is to track occupancy for your local market to understand your performance against the competition and adjust your rates based on demand.  

While explaining the data on the graph that shows average daily rates (ADR) by market across the globe, Tabatha points out that the US and North America (including Canada) had lower rates in 2023 than in 2022, but the rates were still higher than in 2021. This year, ADRs in the US were down for the first half of the year and are on pace to go up in the second half, similar to 2023 trends.But keep in mind, rates will come down as we move through the booking window, and rates are ultimately lower to catch those last-minute bookings, so don’t be alarmed if you see ADRs lower in your market,” Tabatha clarifies.

As the presentation goes further, Tabatha notes that RevPAR (revenue per available rental unit) is a favorite metric at Key Data because it allows them “to track revenue performance changes over time regardless of any inventory changes.”

In the US and North America, including Canada, 2023 RevPAR was lower than 2022 due to the decreased rates and occupancy. Looking at summer pacing in 2024, June and July are down to last year. “To make the most of the rest of summer, it’s again important to balance occupancy and rates with opportunities in your market throughout those peak and shoulder seasons,” Tabatha emphasizes. “Understanding your RevPAR will help you develop that strategy in advance,” she adds.

Understanding Booking Sources

Tabatha explains that utilizing all booking channels is crucial to maximize your bookings. “That’s Airbnb, Vrbo, Booking.com, and Direct. Not just simply utilizing them but also understanding the strengths and weaknesses of each,” she underlines and illustrates this with an example.

“Airbnb and Booking.com have more market share, but direct bookings bring in most revenue. They are great options for last-minute bookings.” Tabatha also adds that Direct and Vrbo are good channels if you want to find guests who like to plan and book stays in advance.

Note: If you opt for Hospitable, you can build your direct booking website and manage bookings on all your channels from a single dashboard. Hospitable also integrates with Key Data.

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Short-Term Rental Reports to Watch

When discussing the analytics tools hosts and property managers should use weekly, Tabatha emphasizes that pacing reports will be key and explains why.

  • Pacing reports allow you to analyze your performance against last year’s top KPIs.
  • Benchmarking allows you to see how your properties are pacing against market trends, assess opportunities, and understand weaknesses where you can capitalize.
  • Tracking and understanding your booking curve allows you to find marketing strategies and set competitive pricing.

Tabatha also showed what the Key Data dashboard looks like and what reports users can create to inform their business decisions.

Watch the full Hospitable Masterclass to discover critical insights that will allow you to understand your property’s position within the local market landscape and make informed decisions in different aspects of your business to maximize your revenue. 

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