European STR Index: 2019 Year-End Report

Dillon DuBois | February 3, 2020

Europe Sees Massive 15-Point Surge to Finish 2019

To better explain the gravity of this year-end boost to the European vacation rental market, consider this: throughout the past four years of tracking millions of rental properties in Europe — only twice have we seen a jump to this scale. 

In November of 2019, the doomsayers had a point — revenues had effectively fallen off a cliff since September, and they found themselves backpedaling to the same point from July of 2017. Then, in a moment’s notice, European vacation rental markets catapulted and made up for more than 5 months of shaky returns. 

As for the calendar year of 2019, European short-term rental markets lost 10.3 points on the index. Generally speaking, this is the same trend we saw in the United States, and it’s one we’ve documented in a new joint report that will likely continue into 2020. 

As you’ll see below, MarketMinder standouts from this month’s report span far and wide as high-growth areas were found in France, Italy, Germany, Portugal, Belgium, and Malta among others. 

Here’s how European vacation rental markets wrapped up the decade.

Urban vs. Destination Markets

The principal difference between Europe’s big-city, urban markets, and their resort-based counterparts is the degree to which they fluctuate. 

Urban markets are a bit more stable while destination markets tend to be more erratic: higher highs and lower lows. There is often more risk (and seasonality) assumed by managers in resort-based destinations, whereas urban destinations are often more conservative. 

In this month’s year-end European AirDNA Index, the two segments ended just about on par with one another. 

Urban Short-Term Rental Markets Up 10 Points

Increasing Revenue

  • Brussels, Belgium: Holding down the top spot on this month’s report is the EU capital. With over 23% year-on-year revenue gains, it’s far and away the fastest-growing market as we launch into 2020. 
  • Milan, Italy: Building on momentum from last month’s AirDNA Index, Milan crossed the decade finish line with 18.6% year-on-year revenue growth. The economic heart of Italy is now becoming a vacation rental hotspot. 
  • Dublin, Ireland: Dublin is also another capital shining in back-to-back months. The city’s 5,400 active rentals (compared to 15,000 in Milan and nearly 70,000 in London) show there is still plenty of room for growth. 

Decreasing Revenue

  • Reykjavic, Iceland: Iceland is on the opposite side of back-to-back revenue trends. Over the last two months, Reykjavic has averaged 17% monthly losses. Despite huge government-run travel incentives, the vacation rental market has yet to truly budge.
  • Istanbul, Turkey: Similarly, Turkey’s capital finished the year on the downslope. Tourism in December isn’t nearly as big in Turkey as it is in other parts of Europe, which could explain the fact that it struggled to keep up this month. 
CityDecember '19 RevenueY/Y%Active Rentals
Brussels, Belgium$2,19823%6,596
Munich, Germany$2,33420%5,996
Milan, Italy$2,12619%15,441
Dublin, Ireland$3,37317%5,396
London, United Kingdom$4,33416%69,599
Stockholm, Sweden$2,37916%2,297
Amsterdam, Netherlands$3,40513%10,810
Copenhagen, Denmark$2,40312%11,306
Lisbon, Portugal$1,62312%17,423
Berlin, Germany$1,98412%14,758
Madrid, Spain$2,50011%18,830
Budapest, Hungary$1,48411%12,397
Moscow, Russia$99410%18,283
Edinburgh, United Kingdom$2,8679%10,024
Kiev, Ukraine$8108%8,625
Paris, France$2,5257%38,690
Rome, Italy$2,1277%29,951
Warsaw, Poland$1,0137%7,037
Athens, Greece$1,0176%10,281
Vienna, Austria$2,4295%10,783
Prague, Czech Republic$2,0621%13,102
Barcelona, Spain$2,5050%20,134
Istanbul, Turkey$780-2%18,381
Tbilisi, Georgia$369-11%15,311
Reykjavik, Iceland$3,202-11%2,566
Top 25 city markets by population and active listing count, ranked by revenue.

Destination Markets Up 15.2 Points to End the Year

Increasing Revenue

  • France: Three major cities in France — Bordeaux, Nice, and Marseille — all ended the year on extremely strong notes. With 20%, 14.3%, and 6.4% respective growth rates, France is making a good case for Europe’s strongest vacation rental market. 
  • Italy: Same story here — three major cities in Italy shined as 2019 wrapped up. Florence (19.2%), Naples (13.2%), and Venice (3.1%) all stood out (in addition to Milan in the Urban segment) from their European neighbors. 
  • Porto, Portugal: Portugal’s second-largest city has become a haven for ambitious travelers looking to escape the tourist traps. 15.3% year-on-year growth is right on part with last month’s report. 

Decreasing Revenue

  • Corfu, Greece: There’s no easy way to put it — Greece’s traditional vacation rental destinations have been far from an economic boon for the country struggling with debt. Corfu has reported massive back-to-back losses giving property managers in the region reason to reconsider. 
  • Antalya, Turkey: Similar to nearby Istanbul, Turkey’s standout destination city of Antalya reported negative year-on-year returns with a slouch of nearly 19%. 
CityDecember '19 RevenueY/Y%Active Rentals
Bordeaux, France$2,04121%4,046
Florence, Italy$1,99719%12,332
Porto, Portugal$1,27215%8,297
Nice, France$1,42814%8,169
Naples, Italy$1,20813%8,814
Valletta, Malta$1,88313%494
Dubrovnik, Croatia$1,70313%4,001
Malaga, Spain$1,6669%6,674
Marseille, France$1,1576%7,687
Batumi, Georgia$2525%10,474
Snowdonia, United Kingdom$4,0373%4,205
Venice, Italy$1,8623%9,392
Bergen, Norway$1,5532%1,050
The Highlands, United Kingdom$2,4991%5,358
Zadar, Croatia$941-1%3,483
Azores, Portugal$930-1%3,525
Split, Croatia$1,147-3%5,793
Marbella, Spain$2,387-3%5,816
Varna, Bulgaria$686-7%1,566
Crete, Greece$1,521-7%13,593
Budva, Montenegro$534-10%4,942
Odessa, Ukraine$332-10%4,493
Cannes, France$1,772-13%9,075
Antalya, Turkey$777-19%8,912
Corfu, Greece$1,726-21%3,651
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 European 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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