According to a joint analysis of 27 global markets by STR and AirDNA, the hotel industry has made “promising” weekly occupancy gains since the low point of the COVID-19 pandemic, while short-term rentals are nearing last year’s levels in revenue per available room.
To measure the impact of the global pandemic on the two hospitality segments, STR and AirDNA analyzed performance of traditional hotels, hotel-comparable short-term rentals (studios and one-bedroom units) and larger short-term rentals (two bedrooms or more). The survey did not include data from shared rooms or private rooms in listings with shared common space, as they are not viewed as directly comparable to hotels.
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A key theme in the early stage of recovery for each segment is a shift in travel patterns away from urban markets and toward regional destination markets. As such, STR and AirDNA tracked performance variances across destination types in 15 urban markets and 12 regional destinations.
The analysis used weekly data from January 2019 through the week ending June 27 this year.
Key Findings
At the end of the studied period, hotel RevPAR in the 27 markets was 64.8 percent lower than the previous year. Short-term rental RevPAR, on the other hand, was down 4.5 percent year over year.
Hotels bottomed out at 17.5 percent occupancy for the week ending March 28, while short-term rentals fell to a low of 34.3 percent. Hotels were hit harder due to greater reliance on group demand and business travel. Largely a result of its further drop, hotel occupancy has since increased 124 percent from its low point.
Occupancy decreases were felt uniformly within all 27 of the markets covered, with the exception of short-term rentals in Atlantic City. Among the worst-hit markets for both hotels and short-term rentals were New Orleans and Rome.
Steeper declines in hotel average daily rate came as travelers migrated toward midscale and economy properties. Nashville and Austin, Texas, were two markets to see more pronounced demand declines for higher-end hotels compared with the lower end of the market.
Through the early stages of performance recovery, regional markets have performed better than their urban counterparts for both hotels and short-term rentals. Key examples include Gatlinburg/Pigeon Forge in Tennessee and Australia’s Gold Coast.