AirDNA Research - Supply and Demand Growth for Short-Term Rentals Outpaces Hotels

When planning a trip, most travelers have the option between booking a hotel or rental property. The unique circumstances of the trip - the purpose, budget, location, and size of the group - may make one accommodation type more appealing than the other. A family hoping to get a feel for a local neighborhood may opt for a vacation rental, while a business professional traveling for an annual conference may return to the same hotel year after year.

These distinct consumer preferences evolved during the COVID - 19 pandemic, as remote work and the need for physical distancing made long - term stays in vacation rentals more desirable. Tourists gravitated toward locations that provided space from neighbors, like mountains, lakes, and rural areas. In these sparsely populated areas, short - term rentals frequently outnumbered hotels, making them a sensible option among travelers.

In this report, we use aggregate data (2018  - 2023) to examine changing trends in supply, demand, and ADR for vacation rentals and hotels in the United States. AirDNA contributes data on short - term rentals (STRs), while STR/CoStar provides traditional hotel data. Using these comprehensive data sets, we also forecast industry trends in the second half of 2023 and into 2024.

Our analyses show that rental shares of supply and demand have accelerated. Small city/rural and suburban locations drove this growth, as they provided consumers with physical space during the pandemic. Larger homes also contributed to growth, with 3 - bedroom rental properties accounting for a larger share of growth than 1 - bedrooms. In the year ahead, the rental share will continue to grow, and hotels are expected to feel the impact.

The full report is available here.