Revenue falling in real terms across Europe, the UK, and the U.S. Occupancy has fallen across the board.
FLORIDA – The U.S. short term rental market saw a summer slowdown, experiencing a 17% decline in RevPAR, according to analysis by short term rental (STR) data specialist Key Data1.
While signs of a similar dip could be seen in Europe, the U.K., and globally for stays in June, July, and August, the U.S. saw sharper declines in Revenue Per Available Rental (RevPAR) and was the only country to see Average Daily Rates (ADR) fall in raw terms.
RevPAR in the United States fell 14.1% to $115 – a 16.8% decline when adjusted for inflation. ADR fell 8.1% year-over-year, dropping from $328 to $302 (a real-terms fall of 11%), and paid occupancy fell by 6.5%, settling at 38%.
Contrast these declines with the rest of the world and it’s clear that while the American market slowed this summer, the UK and Europe likely lag behind the U.S. in returning to pre-COVID norms. The data shows that U.S. RevPAR declined more than twice as fast as Europe and the U.K., meaning property managers in the U.S. are under more pressure to defend revenues.
In Europe, ADRs rose 0.3% in real terms to $182, which helped offset an 8.2% drop in occupancy this summer3. This meant European RevPAR only fell 8% in real terms to $71. The United Kingdom saw RevPAR fall 6% in real terms to $86. Occupancy fell 2.4% in the UK, not helped by ADRs that fell 3.6% in real terms to $213.
Globally, RevPAR was down 9.8% in real terms to $705. Aided by a 4.9% real-term decline in ADR over June, July and August while occupancy also helped to drag revenues down, falling 5.1% annually.
Key Data is the only STR data provider to use direct data from property managers to better interpret the millions of scraped data points it collects from OTAs Airbnb and Vrbo. This allows it to adjust RevPAR and occupancy statistics worldwide to account for the days bookings are blocked by owners for their own stays and maintenance.
Outlook for the rest of the year (September to December 2023)
This is a very early stage picture based on bookings as they stood at the end of August. Occupancy and RevPAR figures should be treated with caution, and our forward looking data is not adjusted for inflation.
Looking at ‘on the books’ (OTB) data for September through December in the U.S., RevPAR shows a $20 drop, year over year, while occupancy is down by 6 percentage points over the same period. ADRs are expected to rise 0.9%6.
However, the data also shows that booking windows in the U.S. have shrunk 11.4% year-on-year for this period – from 68 days to 60 days – which potentially leaves room for property managers to make up ground through December.
U.K. RevPAR is pacing 22.9% behind for stays in September through December, and ADRs are currently up 6.7% to $220. Occupancy is currently down 28% year-over-year. Europe is currently seeing a softer drop in RevPAR (-11.8%), with ADRs up 15.9%, though occupancy is lagging behind last year, down 24%.
As it stands, Global occupancy is also down 31% from the same period last year, but ADRs have increased by 9.9%, pushing RevPAR down 24.1%.
Jason Sprenkle, CEO of Key Data, commented: “Many property managers in the U.S. were probably disappointed this summer. The rest of the world saw declines in RevPAR, but the U.S. should see improvement in 2024. It’s likely that the cost-of-living crisis coupled with an increase in short term rental supply has hurt revenues this summer. It’s still difficult to tell what the rest of the year holds but, as it currently stands, we do see lower occupancies globally.”
1. Scraped data as of 23rd August 2023 for stays between June 1st 2023-31st August 2023 (as of 23rd August).
2. Year-on-year price changes adjusted for June US inflation (CPI)
3. Year-on-year price changes adjusted for June Europe inflation (HICP)
4. Year-on-year price changes adjusted for July UK inflation (ONS)
5. Year-on-year price changes adjusted for July global inflation (OECD)
6. Scraped ‘on the books’ data as of 23rd August 2023 for stays between September 1st 2023-December 31st 2023 (as of 23rd August 2023).
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
