2023 Economic fundamentals for Airbnb and the STR Market

 

 

Demand: Get ready for an exciting journey as we dive into the captivating realm of economic fundamentals and the ever-growing travel bug. Brace yourselves for remarkable demand growth in 2023 that will exceed all expectations. Our latest forecast reveals a staggering surge of 10.4% year over year, leaving the previous estimate of 5.5% trailing far behind. But that’s not all; the adventure continues with an exhilarating recovery from a mild downturn, propelling the demand surge to a robust 8.5% in 2024. Get ready to experience a thrilling ride in the world of travel and exploration.

 

Supply:We have some intriguing updates on the short term rental real estate front. While mortgage rates are on the rise and occupancy levels are experiencing a temporary slowdown since the first half of 2022, there’s an exciting development to share. House prices are currently witnessing a significant drop, creating an opportunity for potential buyers. Additionally, we’re seeing the demand for housing continues to grow steadily, showing no signs of hitting the breaks.

In light of these factors, we have revised our supply forecast for listed nights in 2023, projecting a remarkable year-on-year increase of 14%. This substantial surge outperforms our previous estimate of 9%, highlighting the immense potential in the market. Get ready to seize the moment and make the most of these favorable conditions.

 

Occupancy: We still anticipate another year of declining occupancy due to the surge in supply. But fear not, the decline won’t be as steep as initially predicted. Thanks to the resilient demand, we’re now looking at an occupancy rate of 57.6% in 2023, up from our previous forecast of 56.4%. The occupancy party will continue to rock in 2024, with a predicted rate of 56.7% that towers over pre-pandemic levels. Looks like higher occupancy is here to stay for the foreseeable future.

 

 

Average Daily Rates (ADRs): It’s time to talk numbers! Economic uncertainty and persistent inflation have made travelers seek value like never before. But guess what? The first half of 2023 has thrown us a curveball with some unexpected economic goodness. That means we’re revising our forecast for average daily rates to a 2.1% YOY growth in 2023, outpacing the previous estimate of 1.7%. The value seekers have some pleasant surprises coming their way!

 

 

RevPAR (revenue per available rental): Now, here’s the plot twist. The modest improvements in ADR and occupancy won’t make RevPAR do a victory dance in 2023. But hey, keep your spirits up! Our revised forecast shows a smaller decline of -1.1%, up from the previous estimate of -1.6%. And in 2024, RevPAR will find its balance as the slight dip in occupancy meets its match with some ADR gains. It’s a bit of a seesaw, but progress is being made!

About Us: Shanti Mountain Properties is based in Asheville NC and has 14 years of experience accumulating over 6,000 reservations and 2,700 + reviews from our Airbnb properties. From our long standing property management experience we’re proud to have an excellent rating across all major platforms, a strong team, and a great relationships with Airbnb.Inc. We rely on our southern hospitality, customer service, longstanding property management history and with our newly constructed rustic/modern homes, tell us how we can be your property manager or host your stay in western North Carolina! Contact us from the drop down above, we’d love to hear from ya!!

Graph Credit: Airdna