Short-Term Rentals Are Drastically Reshaping Seasonality Trends

In AirDNA’s October U.S. short-term rental review, we touched on the growing seasonality changes that are benefiting many destination markets throughout the U.S. 

The most obvious takeaway is this: occupancy has increased by 25% over 2019 levels since April in both mountain/lake and coastal destinations. 

Yet, there’s one other fascinating theme: the degree to which occupancy has expanded during the shoulder season.

Flexible working has expanded the time that many travelers now take vacations. Many destination/resort markets rely on just a few months to earn enough revenue to make their listing profitable. If the number of profitable months rose by even just one, it could dramatically increase an investment’s revenue and turn an unprofitable investment into a sure thing. 

For example, October’s occupancy in mountain/lake destinations (55.7%) was just shy of the peak occupancy for all of 2019 (56.2% in July). 

If we drew an arbitrary line at the pre-pandemic average occupancy of 45% and assumed that months over 45% were profitable and ones under 45% were not, we would be left with five profitable months: March, and June through September — but just two of those months (July and August) generate 87% of the excess demand (profits). 

If demand is limited to just a few months, the only way to traditionally increase profitability is to increase Average Daily Rates (ADRs) during those peak periods: no amount of discounting was going to convince someone to visit Cape Cod in March! 

Now, with the added flexibility that the pandemic has introduced to millions of workers throughout the world, we are seeing an expansion of the times when guests are willing to travel to these destinations.

Pro Tip: Take the time to look into booking and pacing trends in your market. If other listings in your area are upping their rates, that’s a good indication that they’re confident guests will pay higher rates before, during, and after the traditional busy season. If you’ve just launched your listing, consider undercutting the competition just a bit to edge out your closest competitors and rack up reviews before the slow season arrives. 

Using the same example as above, the entirety of March–October 2021 has now exceeded the levels of demand to show profitability, expanding excess demand by 200%. Now, July and August make up only 28% of the total, spreading out the profit earning season. In reality, there would also be the opportunity to raise ADRs during these new high-demand months. 

So, how does this look in a specific market? In the chart below, we show data for Coastal Maine, which includes Acadia National Park. It’s a highly seasonal market, with a traditional two-month high season (July/August) and a shoulder season of June/September.

The Acadia National Park area doubled its revenue-rich season, up four months from two months. While July and August used to be the main money-making months, short-term rental owners are now seeing elevated revenue beginning in June and extending into September. May and October are the new shoulder seasons, with demand up 50% and 42%, respectively. A widened summer season led local services to remain in operation longer as well, ensuring travelers had more options for food, drinks, shopping, and fun.

On the opposite side of the country, Coachella Valley has seen seismic shifts in its busy season, too. Before the pandemic, Coachella Valley could count on a two-month peak in March and April driven by the music and arts festival — but the pandemic pumped the brakes on the swarms of festival-goers.

Still, the Coachella Valley has seen demand increase each year and has transformed into a year-round market. ADRs are nearly as high on any given month in 2021 as they were during the peak seasons of 2018 and 2019. 

Pro Tip: Give travelers other reasons to visit your market in the widening busy season. If your market has lesser-known events or natural wonders worth visiting in traditional shoulder seasons, promote those weeks or months and take advantage of their booming interest.

Other markets are riding the highs of solid increases throughout the year 

Joshua Tree has seen some of the biggest boosts in demand and ADR throughout the pandemic. While its demand still roughly exhibits the same seasonality, it’s increased 55% throughout the year. A lack of supply drove this increase; STR owners have enjoyed elevating ADRs during each month of the year, with nearly 80% higher annual ADRs. 

So, what happened in Joshua Tree and elsewhere? The one-two punch of peak season expansion pushing rates and higher overall demand enabled owners to raise rates substantially — more than 40% higher than in 2019.

You don’t have to be in the Joshua Trees or Acadias of the U.S. to benefit from extended seasonality. If you’re in a popular market’s periphery, you should expect some spillover. Search for your location in MarketMinder to see what’s changed in your market.

Wondering if extended seasonality is happening in your market?

What Does the Post-Pandemic Short-Term Rental Landscape Look Like?

It’s hard to say how much of this increased demand will stick around once the pandemic ends, but flexible work arrangements do not. Remote workers’ flexibility means that even small changes in traditional season patterns may spell huge revenue increases for STR owners in many markets, especially more remote destinations. That’s also good news for local business owners who have relied on these seasonal swings to support them during the slower months may and they may also enjoy more revenue, too.

Wherever you’re at, don’t leave money on the table from extended short-term rental seasonality. Rely on AirDNA data to help you capitalize on these seasonal shifts and give more guests the chance to enjoy their time in your space. 

Curious about what the new seasonality looks like in your market? Or want to better understand how much your competitors are charging per night? Spend some time in MarketMinder to one up your competition and charge the rates that guests are willing to pay. 

Discover Seasonality Trends in Your Market

Or, if you’re just checking out how much you could be making with a short-term rental in your area, hop into Rentalizer, the Airbnb calculator. Just plug in your address, number of beds, baths, and guests, and instantly find out how much you could make on Airbnb. 

Destinations that used to rely on short windows for tourism are now seeing peak seasonality expand. Short-term vacation rental trends are benefiting marketers.