top of page
Writer's pictureEmily Barber

2023 Recap on the Short Term Rental Market and what's to come in 2024.

In 2023, the travel landscape continued to change. European travel, consumer price sensitivity, return of the cruise industry, and increased supply all played a role in the slowdown of the US short term rental industry. To establish a foundation for analyzing the variables that impacted the short-term rental market, let's begin by examining the market landscape of the nation.

US citizen travel overseas: 33.3 million from January through August 2023, up 35% from 2022.

Source: U.S. International Trade Administration


Both supply and demand have been growing year over year, but supply continued to outpace demand in 2023.




2023 was consistently down in occupancy compared to 2022 and with that the demand we saw in occupancy in 2021 was an anomaly. Most months in 2023 have been up to or inline with 2019 occupancy data in the U.S. The peak months of March and July were down -8% and -5%, respectively in the United States. In the Finger Lakes region July 2023 occupancy was down -7% compared to 2022 while July 2024 is down -3% compared to same time last year (second week in January) in 2023. Overall the Finger Lakes is inline with the nations occupancy performance if not doing a little better than some areas.


Demand growth greatly outpaced supply growth in 2021 which allowed hosts to drive rates while also capturing high occupancy rates. 2022 and 2023 saw more supply growth than demand growth which is one of the contributing factors to softer occupancy numbers across the nation.


The catalyst moving into 2024 will be to know demand generators in our market and be prepared to capitalize. When Taylor Swift’s Eras Tour went to Denver, Colorado on July 14th and 15th of 2023, that market alone saw a 87% occupancy increase which was a higher spike than Independence Day weekend in that market. Year over year ADR increased +93% and Denver prepared with pricing strategies.


Stay up to date on events and things happening in the Finger Lakes region so you can capitalize on the growth. Such as the Total Solar Eclipse that will be going over the Finger Lakes region on April 8th of 2024, hint, hint!




The United States started high in rate in January 2023 but have been lower than 2022 in all other months. Rates lost ground in 2021 starting in July. The 2023 yearly average is +24% higher than 2019. Rates are coming down after the 2022 peak. The Finger Lakes region saw only modest drops in 2022 and are still above 2021. Overall 2021 was mainly driven by high occupancy and 2022 was mainly driven by high rates.


The year over year length of stay changes are small but impactful for the U.S. The average length of stay across the nation has decreased by 0.9 days since 2021. In the Finger Lakes region in 2023 the average length of stay was 4.9 days, in 2022 it was 5, and 2021 it was 5.1 days.


Guests are booking closer to arrival date than previous years, they are confident they will find a suitable unit within their budget even during peak season in this short period of time. The key to success in 2024 will be trying to capture guests in the 60 to 90 day window. This will help mitigate the need to drop rates because guests who book further out are typically booking a higher ADR and longer length of stays.




With this comes the shift of the Millennials and Gen X’ers travel style of traveling more frequently for shorter lengths of stay. They are more likely to visit a variety of destinations and are happy to pay for those unique personal experiences unlike that of the Baby Boomer generation. Gone are the days of depending on guests to vacation in the same destination for the same time of year and the same amount of days. These two new generations are more unpredictable. Looking at your rates and how you are catering to these generations will pay off in 2024.


The 2023 travel landscape recap, European travel and cruise demand returned, consumers are price sensitive, supply growth has slowed down, but is still up and outpacing demand growth. As a result, Occupancy, ADR, and RevPAR have softened in the United States in the last year but still pacing ahead of 2019 numbers. Avg. Length of Stay and Avg. Booking Windows are shortening, making property managers work harder to maintain occupancy levels. Special event demand can generate big revenue wins if rate and booking windows are maximized.


In the Finger Lakes region the average booking window in 2023 was slightly higher than 2022 however 2024's current booking window is down from 2023 so guests are booking closer to arrival for 2024 than they were for 2023. 2024 is predicted to be inline with 2023 booking pace if not slightly behind 2023's year end performance.


As we look ahead into 2024, here are key trends to be prepared for.


  • Supply growth is slowing, but may continue to outpace demand.

  • Travelers are looking for luxury for less, shorter lengths of stay but more frequent trips, more affordable destinations, rest and relaxation, unique culture and experiences.

  • Demand has stayed strong despite economic uncertainty.

  • Travelers in higher income brackets are more immune to the economic headwinds and hotels are expecting 2024 to look similar to 2023.

  • 2024 will need strong navigation with your KPI’s.

  • Supply growth is slowing but it’s still up year over year and may continue to outpace demand.

  • Demand for traditional hotels is back.

  • Guests want more value for their money and owners want strong revenue returns.


For updates on short term rental performance metrics, educational material and all things short term renting in the Finger Lakes region join our mailing list here!





Commenti


bottom of page