Actual royalty and pop royalty have something in common when it comes to short-term rentals: they boosted demand and daily rates massively during 2023.
coronation of King Charles III and Taylor Swift’s The Eras Tour.
Key Data found the coronation boosted short-term rental supply in London by 6% and helped listings increase their revenue by 60%, with the revenue per available room (RevPAR) jumping by 50%.
Meanwhile, Swift’s mammoth global tour is estimated to have contributed more than $10 million to America’s short-term rentals industry during 2023. RevPAR jumped by 28% in host cities, with daily rates up 14%, and occupancy increasing by 12%.
Seriously, if there was a Short-Term Rentals Personality of the Year, Taylor Swift would win it by a country mile.
Despite the impact of our regal duo, Sally’s presentation suggested 2023 had been a year of consolidation for short-term rentals following huge growth in 2022.
In the US, RevPAR, average daily rates, and occupancy levels have softened in the year to-date – but remain well ahead of pre-pandemic levels. While daily rates have dropped by only 1%, paid occupancy levels have fallen by 11% – which suggests the glut of extra supply is having an impact. Meanwhile, RevPAR has dropped 12% – from $120 per night in 2022 to $106 per night this year.
In terms of supply, the number of properties has risen by 11% in the US, with the guest check-ins per property down by 7%. Average stay lengths have fallen slightly – by 3% – which suggests cost of living factors are starting to bite.
In Europe, there is a rosier picture. Average daily rates and occupancy have each risen by 5%, while RevPAR has gone up 13% – from $55 per night to $62 per night (and this is despite a jump in supply of 19%).
The UK, meanwhile, has fallen between the US and Europe. Average daily rates are 8% higher this year – thanks mainly to strong performance between January and May. Summer saw a drop in paid occupancy levels compared to last year, with the final quarter of 2023 tracking behind 2022 so far. Local factors will undoubtedly be making an impact, including the cost of living, rail strikes, and poor weather.
In relation to 2024, Sally said short-term rental operators will face some headwinds due to rising supply, hotels biting back, guest demands, and owners expecting more revenue.
Perhaps Taylor could add a few more cities to her world tour to help us out.
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