The United States AirDNA Index
The United States’ short-term rental industry has officially entered its shoulder season. Whereas revenues remained strong throughout the late-summer push, September saw the onset of fall and an abrupt snap back to reality. Occupancy rates sputtered, ADRs diminished, and money was left on the table.
With the AirDNA index settling down to 132.4, hosts and property managers in the United States witnessed a 10.4-point drop in revenues earned from the previous month. When also considering the year-on-year dip (4.8% less revenue than September of 2018) it’s fair to say that seasonality isn’t entirely to blame.
This being said, there is still room for cautious optimism and the long-term trajectory of the vacation rental market is still resoundingly positive. This month’s AirDNA index is up 12 points from two years prior, and with the holiday season on the horizon, there’s certainly reason to celebrate.
This much is clear: there is a handful of select cities and destinations who are truly carrying the load. Before diving into market specifics, here’s the snapshot of the current vacation rental market in the United States.
Metropolitan vs Destination Markets
Prior to May of 2018, most profits in the United States vacation rental landscape were found (curiously enough) in places not traditionally associated with vacationing. It was the big urban markets like Dallas, Portland, and Washington D.C. that stood the most to gain.
After last May, however, the paradigm shifted and traditional ‘destination’ markets took the lead. For the last 15 months, AirDNA has been tracking a short-term rental ecosystem that highly favors places like the Florida Panhandle and the Colorado Front Range — places that put the ‘vacation’ in ‘vacation rental.’
Based on our data from this month’s AirDNA index, it seems we may be in for another inflection point. While both sectors lost steam, vacation markets took a 12.7-point hit while urban markets only saw a 5.13-point hit. The current standoff is neck and neck (only a 3-point difference between the two sectors), and it could very well be signaling the reemergence of the big city.
Urban Short-Term Rental Markets
In terms of the urban markets, the United States’ southern gems are currently performing best. Cities throughout the American South in states like Texas, Georgia, and North Carolina are seeing very impressive numbers while their northern counterparts look a bit worse for wear.
- Atlanta, GA – It’s truly rare to see a city with nearly 11,000 active vacation rentals see year-on-year revenue increases of over 15%. From hosting the Super Bowl to world-renowned festivals, Atlanta is no stranger to primetime events and hosts are starting to take notice. Shoulder months mean peak season in Georgia’s capital.
- Texas – Revenues just seem bigger in Texas. Of the nine cities experiencing the most revenue growth, five are located in Texas. Dallas, Austin, San Antonio, Fort Worth, and Houston all deserve recognition as cities that consistently deliver results.
- Charlotte, NC – From Gatlinburg to Asheville and the Outer Banks, there’s no shortage of short-term rental hotspots in North Carolina. Charlotte, however, is a big city that often gets unfairly lost in the mix. After seeing a 9.7% year-on-year revenue increase, that’s no longer the story.
- Columbus, OH – Losing nearly 16% year-on-year revenue is never great, but it’s a truth hosts in Columbus are starting to come to terms with. It may take a bit more investment and tourism to really establish this Midwestern capital as a viable vacation rental market.
- Indianapolis, IN – Despite having become as an impressive breakout candidate since 2018 and seeing a 17.4% revenue increase in last month’s AirDNA STR Index, Indianapolis finally saw growth taper off. The 4% downturn marks the first setback in quite some time.
|City||Revenue Sep '19||Y/Y%||Active Rentals|
|San Antonio, TX||$2,178||6.4%||3,433|
|Fort Worth, TX||$2,701||4.8%||1,088|
|Los Angeles, CA||$3,339||1.7%||20,535|
|San Diego, CA||$4,204||.02%||11,490|
|New York, NY||$4,293||-3.9%||37,677|
|San Jose, CA||$3,143||-7.3%||2,600|
|San Francisco, CA||$5,095||-8.5%||7,013|
Traditional Vacation Rental Destinations
Just because the traditional vacation rental destinations saw decreases this month doesn’t mean there aren’t any success stories. Miami, Breckenridge, and three cities in Hawaii all carried their weight. That being said, there was one state in particular which bore most of the negative brunt.
- Fort Lauderdale, FL – Last month’s AirDNA STR Index noted Fort Lauderdale as one of the biggest losers. In September, however, the southeastern seaside city reeled in 21.8% more profit than in September of 2018.
- Gulf Shores, AL – As one of the original vacation rental powerhouses popping up in the 1970s, Alabama’s Gulf Shores genuinely hasn’t looked back since. With 11.5% year-on-year revenue growth, a B+ grade on MarketMinder, and a 100/100 score for investability, Gulf Shores shows no signs of letting up.
- Hawaii – Lahaina (11%), Honolulu (4.6%), and Kihei (4%) all deserve shoutouts as Hawaii continues to see notable vacation rental growth throughout the length of the year.
- Florida – Two of Florida’s most sought-after regions — the Panhandle and the area surrounding Orlando and Disney World — took a significant hit in this month’s AirDNA STR Index. Four cities along the southern-facing stretch of coastline straddling the Gulf of Mexico witnessed negative year-on-year returns: Destin (-17.4%), Panama City Beach (-14.6%), Miramar Beach (-13%), and Santa Rosa Beach (-8.2%). Meanwhile, the drop-offs in Kissimmee and Davenport could suggest a future relaxation in the markets surrounding Orlando.
- South Carolina – the Atlantic coast of South Carolina is another historic vacation rental powerhouse that’s showing some signs of easing. Hilton Head Island (-8.2%), Myrtle Beach (-6.5%), and North Myrtle Beach (-3%) all showed curious year-on-year contractions. Interestingly enough, North Myrtle Beach witnessed the most year-on-year revenue growth in last month’s AirDNA Index.
|City||Revenue Sept '19||Y/Y%||Active Rentals|
|Santa Rosa Beach, FL||$4,486||-8.2%||5,190|
|Park City, UT||$4,145||2.4%||4,567|
|Hilton Head Island, SC||$3,764||-8.2%||7,706|
|Las Vegas, NV||$3,635||0.0%||9,605|
|Orange Beach, AL||$3,471||-3.3%||5,994|
|Gulf Shores, AL||$3,463||11.6%||6,796|
|North Myrtle Beach, SC||$3,253||-3.0%||4,829|
|Fort Lauderdale, FL||$3,235||21.9%||4,819|
|New Orleans, LA||$3,168||4.1%||8,248|
|Miramar Beach, FL||$3,099||-13.1%||5,488|
|Panama City Beach, FL||$2,815||-14.6%||10,310|
|Miami Beach, FL||$2,764||0.1%||7,211|
|Saint Petersburg, FL||$2,485||16.4%||5,946|
|Myrtle Beach, SC||$2,324||-6.5%||7,481|
Short-Term Rental Report Methodology
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.