EU AirDNA Index November 2019: Inaugural Report

Dillon DuBois | December 4, 2019

The EU AirDNA Index

Our team at AirDNA is proud to announce the inaugural European AirDNA Index. 

Much like the S&P 500 provides insights into the stock market, we set out to develop a resource that tracks the monthly performance of the European vacation rental market. 

For hosts and property managers operating short-term rentals in this region, the EU AirDNA Index serves as an invaluable tool for analyzing market-wide trends and discovering which cities are performing best. Data is crucial — but context and color commentary are necessary to developing smart revenue management strategies. 

The first installation of the EU AirDNA Index comes at an interesting time. We seem to be precisely on the brink of determining whether recent growth was a fluke anomaly or a real indication of future trends. 

In 2017, European short-term rental markets witnessed an immense leap and jumped from an index score of 104.88 to 159.21 — a 51.8% boost. The following year, however, European markets lost steam and dropped 9.21 points. In 2019 the downward trend continued and markets have been growing nearly 15% slower. This past month was particularly discouraging as EU cities dropped by over 11 points in a single month. 

Leading up to the year-end holiday season, this is when vacation rental markets in Europe will show whether revenues are truly tapering off or if there’s more room for growth. Here’s where the EU AirDNA Index stands as of November 2019:

Metropolitan vs Destination Markets

Historically speaking, Europe has tilted to favor traditional, resort-style markets rather than their larger urban counterparts. In fact, growth in vacation rental markets has outperformed urban markets in 26 of the last 27 months. That is — prior to this month’s report. 

Destination markets took a 10.2-point hit and are now growing at a slower rate than urban markets for only the second time in 27 months. While urban markets didn’t exactly see an improvement either (they lost 1.41 points) the drop-off wasn’t nearly on the scale of destination markets. 

Here’s how the two segments line up for November of 2019.

Urban Short-Term Rental Markets

As mentioned above, urban markets as a whole lost a marginal 1.41 points. That being said, 72% of the most populous cities saw negative year-on-year growth. Places like Lisbon, Athens, and Barcelona all experienced noticeable downturns. Here are some interesting markets standing out from the pack (for better or worse).

Increasing Revenue

  • Paris, France – With over 34,000 active listings, Paris is the world’s largest vacation rental market. And despite having some fairly restrictive regulations, revenue growth continues to be positive. This month Paris saw nearly 9% more revenue than in October of 2018.
  • Copenhagen, Denmark – It seems that the costs of living and travel have yet to truly deter tourists away from Copenhagen. Denmark’s idyllic picturesque capital saw 8.8% year-on-year growth and is showing no signs of letting up.
  • Dublin, Ireland – Listing growth has largely plateaued in Dublin, but that doesn’t mean there isn’t revenue to be made. Hosts and property managers in Ireland were up 7.4% from the same month in 2018. That’s reason enough to celebrate.

Decreasing Revenue

  • Reykjavik, Iceland – One of the region’s northernmost vacation rental destinations looked a bit worse for wear in our inaugural European Index report. Reykjavik currently shows a score of 4/100 on MarketMinder’s ‘Revenue Growth’ metric, and that much was clear this month. Reykjavic was down over 22%.
  • Moscow, Russia – Russia is another country struggling to develop its short-term vacation rental market. Moscow reported 20.4% less revenue growth than the prior year, and many other spots have struggled since hosting both the World Cup and the Olympics in recent years.
  • Warsaw, Poland – Poland’s capital has recently been touted as an up-and-coming hotspot with affordable housing and vibrant culture. Unfortunately for hosts, this month’s numbers came in 18% lower than last year’s average. 

 

CityRevenue Oct '19Y/Y%Active Rentals
Paris, France$3,0839.0%34,718
Copenhagen, Denmark$2,4068.8%10,774
Dublin, Ireland$3,8287.4%5,382
Amsterdam, Netherlands$3,7787.3%9,638
Milan, Italy$2,2196.2%14,832
Stockholm, Sweden$2,3081.4%2,002
Brussels, Belgium$1,9830.1%6,103
Rome, Italy$3,0990.0%28,977
Berlin, Germany$2,066-0.5%13,447
Madrid, Spain$2,599-0.9%17,495
London, United Kingdom$3,737-0.9%63,705
Prague, Czech Republic$1,842-1.5%11,534
Vienna, Austria$1,899-3.1%9,262
Lisbon, Portugal$2,195-3.9%17,226
Munich, Germany$2,107-4.9%8,090
Athens, Greece$1,254-5.2%10,699
Barcelona, Spain$3,395-5.6%19,361
Budapest, Hungary$1,262-8.3%11,100
Tbilisi, Georgia$523-8.7%14,834
Edinburgh, United Kingdom$2,394-9.6%9,412
Kiev, Ukraine$720-10.7%8,174
Istanbul, Turkey$803-15.7%17,338
Warsaw, Poland$858-18.0%6,944
Moscow, Russia$825-20.5%17,127
Reykjavik, Iceland$2,919-22.6%2,337
Top 25 city markets by population and active listing count, ranked by revenue.

Traditional Vacation Rental Destinations

Traditional vacation rental destinations are the markets largely accounting for this month’s steep decline. This segment’s index saw a 10.2-point drop this month, and many markets are struggling to stay afloat. That being said, there are a handful of places that are producing extremely positive returns.

 

Increasing Revenue

  • Batumi, Georgia – It’s probably surprising for most people to hear that an often-overlooked coastal city in Georgia has more active listings than Venice, Italy. Not only does Batumi have more listings, but it’s also witnessing higher rates of growth. Batumi saw a whopping 25.8% year-on-year increase.

  • Italy – Speaking of Venice, Italy as a whole fared particularly well this month. Venice, Naples, and Florence all rank in the top 8 for VR markets seeing the most growth.

  • Bordeaux, France – While well behind Georgia’s Batumi, Bordeaux came in second for this month’s AirDNA index with 8.7% year-on-year growth.

Decreasing Revenue

  • The Balkans – On the other end of the spectrum, the Balkan region of southeastern Europe hasn’t lived up to previous years’ growth rates. Budva (Montenegro), Dubrovnik (Croatia), Crete and Corfu (Greece) all reported negative year-on-year returns. 

  • Varna, Bulgaria – Bulgaria also struggled to keep up with last year’s growth rates as hosts in Varna saw 22% less growth than expected.  

CityRevenue Oct '19Y/Y%Active Rentals
Batumi, Georgia$44728.5%10,466
Bordeaux, France$2,0318.9%3,848
Venice, Italy$3,4946.6%9,794
Naples, Italy$1,3884.7%8,430
Marbella, Spain$2,9963.1%6,035
Porto, Portugal$1,7242.5%8,171
Florence, Italy$2,6572.4%11,755
Zadar, Croatia$9780.9%4,255
Nice, France$1,642-0.5%8,256
Malaga, Spain$1,660-2.5%6,733
Snowdonia, United Kingdom$3,617-2.7%5,297
Azores, Portugal$1,158-3.9%3,668
Marseille, France$1,225-4.7%7,544
Split, Croatia$1,213-5.9%7,097
Bergen, Norway$1,648-7.4%971
Valletta, Malta$2,669-7.4%496
Crete, Greece$1,783-8.0%19,078
Corfu, Greece$1,472-11.3%5,800
Odessa, Ukraine$384-12.2%4,641
Antalya, Turkey$1,122-12.7%9,829
The Highlands, United Kingdom$2,565-13.8%5,728
Cannes, France$2,192-15.0%9,599
Dubrovnik, Croatia$1,577-17.9%6,004
Varna, Bulgaria$567-22.0%1,680
Budva, Montenegro$464-23.0%5,584
Top 25 markets by active short-term rental listing count, not already in the urban market list, ranked by revenue.

Short-Term Rental Report Methodology

The EU AirDNA Index is calculated in two different ways. First, in order to gather an accurate sample size for urban metropolitan markets, we gathered the top 25 cities according to population and active listing count. We then adjusted for geographic distribution, and ranked the cities by current active revenue.  

In order to filter for the vacation rental markets, we analyzed the top 25 markets according to active listing count that were not already in the urban index. We further filtered by cities whose economies are largely driven by tourism and travel. 

In both scenarios, Seasonality is removed by using a revenue coefficient for each market’s monthly average rental revenue over the past five years. This allows us to remove the seasonality swings in each market and report a monthly trend.

After in-depth analysis of several different methodologies that included only analyzing the same basket of properties year over year, or adjusting for property size, to name a few, AirDNA found that the mean of all short-term rental performance provided the most simple and equally accurate indication of the markets’ movement.

The Index is based on all data available in the month prior to publication.

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