AirDNA Index

Health of the U.S., European, and Oceanic Short-Term Rental Markets

Airbnb and Vrbo rentals across the United States have increased by 105% over the past three years propelled by a new wave of travelers looking for more unique and affordable hotel alternatives. Seeing the outsized returns that short-term rentals generate, U.S. real estate investors both big and small have jumped into this new asset class purchasing 1.8 million properties with the intent to earn short-term rental revenue in 2018 alone.

The question is no longer whether short-term rentals are the highest and best use of residential properties throughout most metropolitan cities and leisure destinations. The question is now: how sustainable is this spread between how much short-term and long-term rentals earn and how quickly will it erode, especially with a softening economy?

Many theories exist about how this delicate dance between hotels, private accommodations, and the discerning traveler will play out. The most likely outcome seems to be that cost sensitive consumers and income hungry homeowners will result in a glut of supply; decreasing rates over time for private accommodations.

After listening to different viewpoints of where “in the cycle” short-term rentals are and whether the good times are coming to an end, we at AirDNA decided it was time to add some data to the debate by producing a monthly report on the state of short-term rentals across major world markets.


Monthly Short-Term Rental Reports for Major World Markets

Much like the S&P 500 provides guidance on the fluctuations of the stock market or the Case-Shiller Index provides guidance on the change in home values, the AirDNA Index provide a high-level trend of the revenue generated by short-term rentals. The Index looks at the average revenue generated by all rentals listed on Airbnb or Vrbo to determine whether properties are earning more or less on a seasonally adjusted basis.

To best summarize the performance of the vacation rental markets in the United States, Europe, and Oceania, we included a representative sample of each region by comparing twenty five of the largest metropolitan cities by population and the twenty five of the largest destination markets, as determined by active short-term rental count.

AirDNA Index:
United States

AirDNA Index: Europe

AirDNA Index: Oceania