AirDNA Market Review | Europe February 2022

First, the good news: Relaxed pandemic restrictions and a renewed appetite for travel clearly fuelled positive short-term rental (STR) trends during the first two months of 2022.

However, future projections for the European market remain slightly uncertain due to Russia’s ongoing attack on Ukraine, the possible influence of new COVID-19 variants, and the fact that STR demand continues to outpace supply.

Demand hit a post-pandemic high for the European continent in February 2022, with 20.8% more nights stayed versus February 2019 and 73.9% more nights stayed versus February 2021. This demand pushed average daily rates (ADR) 2% higher than this time last year and 28.9% higher than in February 2019.

For Europe, this all led to a 77.3% year-over-year STR revenue increase to €2.4 billion ($2.6 billion) for the month. (For comparison, January 2022 revenue also grew by 103.4% year-over-year.)

Seasonal travel demand is exceeding expectations

Europe, the Middle East, and Africa (EMEA) tallied 30.1 million nights booked during the month of February as travellers ramped up their spring and summer getaway plans. Spring months (March to May) typically see moderate STR demand, but current future pacing data is actually more closely resembling 2019 figures than 2021. Simply put: This is good news for STR owners and managers.

As of 1st March, spring booking pace was 113.5% ahead of the same period last year and 3.4% higher than at the same time in 2019. Meanwhile, spring ADR pacing is decelerating from 2021’s highs (-4.8%) but is still much higher than 2019’s (+24.6%).

Looking further ahead, current summer pacing data (June to September) shows a continuation of increased rates and demand during these peak months. As of 1st March, there were 74% more summer nights booked than in 2021, while rates continued to trend 4.2% higher versus last year (and 25.1% higher than 2019’s rates).

Supply is recovering, albeit slowly

The supply of available listings—previously diminished by the pandemic—continues to recover throughout the continent (+4.1%) but still remains lower than in 2019 (-7.5%). Assessing recent occupancy gains better completes the supply-versus-demand picture, though. In February, STR occupancy climbed to 47.8% relative to the low mark of 44.1% this time last year (and the 48.9% benchmark set in 2019). The average revenue per available listing in Europe also jumped by 17.5% year-over-year, which can be attributed to the increase in ADRs in tandem with fewer available listings.

As supply continues to re-enter the market, occupancy levels may normalise or even fall in some areas. But strong booking activity for stays that are more than three months in advance clearly indicates that there’s renewed travel confidence within the region. And as more countries lift pandemic restrictions, demand momentum will continue to influence rates and occupancy levels during peak periods (barring an increase in supply). 

European STR trends at a glance for February 2022:

• Each of the top 20 countries experienced year-over-year demand increases.
• Hungary saw the largest demand increase at 178%.
• Austria saw the largest supply increase at 16%.
• Belgium was the only country in which occupancy declined (-0.5%).
• Greece (+232%), Portugal (+196%), and Croatia (+151%) are all seeing exceptional growth in future summer bookings relative to last season.

Measuring STR recovery by market size

In order to contrast and compare the performance and recovery rates of different STR markets across Europe, we have established four categories based on average available listings maintained during 2019.

These categories are:

• Large cities: at least 5,000 average available listings (24.7% of total share)
• Medium cities: at least 1,000 average available listings, but less than 5,000 (28.7% of total)
• Small towns and cities: at least 200, but less than 1,000 (24% of total)
• Rural areas: less than 200 (22.6% of total)

As you can see in the chart above, the strongest year-over-year demand growth for February 2022 was found in large cities (+122.5%) and medium cities (+84.9%). Additionally, large cities recorded a slight dip in supply (-2.1%) versus this time last year, while rural areas experienced the strongest supply growth (+6.8%).

When measuring against February 2019, rural areas saw supply growth in January (+7.2%) and February (+4.7%). Small towns saw supply growth in January (+0.2%) but then lost supply in February (-1%). And large cities—in perhaps the most interesting takeaway here—have remained at least 20% below 2019 figures for every month since April 2020.

Additional market-specific highlights:

• As of 1st March, the strongest booking demand is in rural areas (+87.5%).
• Revenue and ADRs in rural areas are also trending ahead of last summer (+101.3% and +8%, respectively).
• Summer demand in large cities is pacing 50.5% ahead of 2021.
• Summer ADRs in large cities are trending just 0.5% higher than in 2021.

Amsterdam (-72.5%); Dublin (-69.9%); Munich (-63.9%); Hamburg (-61.3%); and Prague (-60.5%) are lagging the most in demand relative to 2019.

In summary, large cities have been most vulnerable to a decline in international demand, pandemic-related restrictions, and increasingly tight STR regulations. And as the ongoing conflict in Ukraine continues to unfold, another layer of adversity could stunt demand recovery as oil prices climb and a general sentiment of instability in the eastern portion of the continent deters travel.

Russia’s invasion of Ukraine is already impacting Airbnb travel trends

European STR demand in February was largely unaffected by Russia’s invasion of Ukraine that began on 24th February. During the month, Ukraine and Russia made up only 0.6% and 2.8% of the total European demand share, respectively. 

In 2021, Ukraine represented 0.6% of the total demand (1.6 million nights sold) for the continent, netting 0.3% of global demand and 0.1% of global revenue. Russia held 2.9% of European demand in 2021 (7.5 million nights sold), meaning 1.3% of global demand and 0.4% of global revenue. While these figures may seem relatively minuscule, the conflict’s effect on European travel is expected to be felt to a greater extent in coming weeks and months.

Nearly 3.7 million Ukrainian refugees have since fled to neighbouring countries, with more anticipated as the situation continues to unfold, according to the United Nations. In response, Airbnb and Airbnb.org have announced that Airbnb.org will offer free short-term housing to as many as 100,000 refugees.

Airbnb travel trends are currently appearing stable when compared with historical data for the region. However, Airbnb bookings have increased dramatically in nearby cities just across Ukraine’s borders.

Here are the cities in each nearby country that have recorded the largest upticks in bookings when comparing pre-invasion data (February 1-23, 2022) with post-invasion data (February 24-March 19, 2022):

• Chelm, Poland (+614%)
• Tulcea, Romania (+391%)
• Velence, Hungary (+311%)
• Chisinau, Moldova (+80%)
• Kosicky, Slovakia (+75%)

Both Airbnb and Vrbo made news headlines in early March by cutting off listings in Russia and Belarus. And in a related grassroots effort, supporters of the Ukrainian resistance also began booking Airbnb stays in Ukraine not for travel purposes but as a means of sending funds directly to local hosts. On 4th March, Airbnb CEO Brian Chesky tweeted: “In 48 hours, 61,406 nights have been booked in Ukraine. That's $1.9M going to hosts in need. Such a cool idea from our community. Thank you.”

• Ukraine has 17,325 active short-term rentals. The largest short-term rental markets in Ukraine are Kyiv with 5,638 active rentals, Odessa with 3,587 active rentals, and Lviv with 2,553 active rentals.

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• Gain more insights from the latest short-term rental trends in our new U.S. Market Review