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STR, AirDNA release Analysis of Hotels and Short-Term Rental Performance

HENDERSONVILLE, Tenn. — The hotel industry has made promising weekly gains in occupancy since its low point during the COVID-19 pandemic, while short-term rentals are nearing last year’s levels in Revenue Per Available Room (RevPAR), according to a joint analysis of 27 global markets (including 15 urban markets and 12 regional markets) conducted by STR and AirDNA.

To measure the impact of the global pandemic on the two hospitality segments, STR and AirDNA analyzed performance of traditional hotels, hotel-comparable short-term rentals (studios and 1-bedroom units) and larger short-term rentals (2 bedrooms or more). The analysis used weekly data from January 2019 through the week ending June 27, 2020.

At the end of the studied period, hotel RevPAR in the 27 markets was 64.8-per-cent lower than the previous year. Short-term rental RevPAR, on the other hand, was down only 4.5-per-cent year over year.

Hotels bottomed out at 17.5-per-cent occupancy for the week ending March 28, while short-term rentals fell to a low of 34.3 per cent. Hotels were hit harder due to greater reliance on group demand and business travel. Largely a result of its further drop, hotel occupancy has since increased 124.0 per cent from its low point.

Steeper declines in hotel Average Daily Rate (ADR) came as travellers migrated toward mid-scale and economy-class properties. At its low point, hotel ADR fell 50.4 per cent year over year, while hotel-comparable rentals and large short-term rentals saw a more modest ADR decline of 11.6 per cent and 6.4 per cent respectively.

Prior to the pandemic, hotels historically had the upper hand in performance compared to their short-term rental counterparts. In 2019, for instance, hotel occupancy was on average 11.4 percentage points higher (75 per cent) than occupancy of hotel-comparable rentals (63.6 per cent) and nearly 20 percentage points higher when compared to larger short-term rental (56.3 per cent). The same was true with Average Daily Rate (ADR), which was 22.7-per-cent higher for hotels (US$161.39) compared with hotel-comparable rentals (US$131.50)

As the hospitality industry has emerged from the performance lows of mid-March and early-April, traveller behaviour has made regional tourism destinations more popular than their urban counterparts for all accommodation types. This represents a distinct shift form the pre-COVID-19 economy, where urban markets traditionally had an occupancy advantage over regional markets. Urban hotel occupancy held a 6.7-point edge over regional market hotel occupancy in 2019. The urban advantage for short-term rentals also was apparent last year, albeit less pronounced.

The complete report is available at str.com.

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