Oh. The highlights...in part.
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Economic uncertainty could not halt American short-term rental (STR) momentum in January 2023. Coming off a strong holiday season, available listings (supply) jumped 21.9% year over year, and nights stayed (demand) grew 14.5%.
Occupancy (nights booked versus nights available) is a little more nuanced but still spells good news for the industry at large. In short, occupany rates have been downtrending since March 2022. However, the proportionate decline in both supply and demand this January led to an occupancy rate that was only 1.3% lower versus this time last year.
This was also the same YOY difference seen in December and tied for the smallest YOY decline since March.
(For reference, the largest occupancy decline was 10.2% in June 2022 and was 5.1% as recently as November 2022.)
At a Glance: Key U.S. Short-Term Rental Performance Metrics for January 2023:
- RevPAR (revenue per available rental) rose by 1.7% YOY to $153
- Available listings reached 1.33 million – up 21.9% YOY
- Total demand (nights) rose 14.5% YOY
- Occupancy declined 1.3% YOY to 49.9%, up +3.6% vs. 2019
- Average daily rates (ADRs) rose 3.1% YOY to $311
- Nights booked are up 17% YOY
There is some suggestive evidence for forthcoming supply increases in new listings. New listings, which had been trending downward since May of 2022, reversed course sharply in January, increasing by about 4,000 listings, or 6%, compared to December. While high in level terms for the month of January, when looking at new listings as a percentage of total available listings, the figure is fairly typical, falling in the middle of figures from the past five years.
In summary, January was a slight pause that let the STR market catch its breath after a breakneck holiday season. While demand growth slowed slightly from December, so did supply, and occupancy remained only 1.3% lower than a year ago. ADR, generally close to its lowest in January, had results that were mixed across locations but increasing in aggregate.
Meanwhile, forward-looking measures suggest continued strength as travel remains a priority to U.S. consumers, even as economic signals are ambiguous at best. Our baseline expectations at the beginning of the year were that demand would grow at about 5.5% for 2023. After two months of exceptional performance and forward booking rates in excess of 8% YoY for the next six months, the likelihood of the upside scenario is on the rise.
