Weaker Short-Term Rental Players Face Mounting Pressures
Photo Credit: Short-term rental companies are facing an occupancy drop-off in what was supposed to be a blockbuster summer. Pictured is an Airbnb in the Dominican Republic. Skift / Dennis Schaal
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Softness in occupancy rates, onerous long-term leases, and investor demands for profitability have contributed to a greater strain on the weaker companies in the short-term rental sector.
The weaker U.S. companies in the short-term rental industry, those valuing growth over profits, are running into a difficult moment at the start of the summer.
Inflation soared, fuel prices led to are-you-kidding-me moments at the gas pump, and occupancy rates in the U.S. in the third quarter are currently at 39 percent, down from 45 percent during the same period in a standout 2021, according to Melanie Brown, director of analytics at Key Data Dashboard, which tracks vacation rental data.
Although there has been a dramatic falloff in third quarter occupancy compared with last year, it is still four percent higher than in pre-pandemic 2019, she said.
Revenue per available room for vacation rentals in the U.S. in the "third quarter is down by 7 percent," Brown said. "Revenues are still substantially higher than in 2019. Supply has increased over the last 12 months, contributing to lower occupancy rates."
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