Based on early data from its Market Review, 2024 is already looking to be a promising year for vacation rentals after a frustrating 2023.
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After a bumpy 2023, AirDNA is predicting a strong 2024 for short-term rentals.
In 2023, the short-term rental space was defined by its ups and downs, with the supply of available nights increasing 12.6 percent year over year, compared to a more subdued 6.5 percent annual growth in demand, according to AirDNA’s 2023 U.S. Market Review.
Regulatory challenges proved another bump in the road, with New York City implementing strict regulations around short term rentals, causing the STR inventory in the largest city in the United States to plummet. AirDNA’s report found, however, that rather than disappear, much of the demand has migrated across the Hudson River to New Jersey. Whereas demand for short-term rentals dropped a staggering 46.1 percent throughout 2023, demand in Jersey City and Newark has risen 53.7 percent — the largest spike in demand in the nation, according to the report.
Last year also marked the end of the incredibly high occupancy rates hosts and investors have enjoyed since 2021. Occupancy dipped 5.8 percent year over year to 49.9 percent — below pre-pandemic levels — as supply increased considerably. The increase in supply also brought average daily rates down 2.4 percent to $311.09.
At the same time, 2023 saw the most in-demand month on record, with nearly 24 million nights stayed in July, and the short term rental industry writ large ended the year at $64 billion — its highest value on record.
Based on early data, 2024 is already looking to be a promising year for vacation rentals. Demand in January is 8 percent higher than it was at the same point in 2022, and demand for the succeeding months is already between 13 and 21 percent higher for every month through June, reflecting the improved economic outlook for 2024 versus the start of 2023 when fears of a recession hung over many consumers.
Two large upcoming events — spring break and the Apr. 8 total solar eclipse — are expected to drive spring bookings, with a 225.8 percent increase in bookings on Apr. 8, which falls on a Monday.
“The total solar eclipse promises to have an even more radical effect on demand for small city/rural locations,” the report reads. “Star-gazers have rushed to book bucolic retreats that promise a clear view of the sky.”
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