The short-term rental market is booming.
Five years ago, revenue from vacation and short-term rentals totaled $81 billion dollars worldwide. In 2024 it’s projected to surpass $100 billion.
There’s a lot happening in our industry and it can be hard to keep up on everything. So to get a better understanding of how short-term rental owners and managers fared in 2023, we decided to ask them directly.
We surveyed more than 300 property owners and managers, dove deep into the data, and created the first-ever Short-Term Rental Report by Hostaway.
Here are the three biggest takeaways.
The short-term and vacation rental gold rush is no longer a secret. Savvy property owners and managers around the world are seizing the opportunity to ride the wave.
The result? More competition. Like, a lot more.
Eighty-one percent (81%) of those who responded to our survey said their markets were more competitive in 2023 than in years prior. That is a massive number. It’s hard enough to find a handful of people to agree on something, let alone four-fifths of people.
But what’s even more shocking is that almost half (47%) said their markets were a lot more competitive in 2023 — not just a little.
As a result, owners and managers are looking for ways to gain a competitive edge in these increasingly competitive markets. And technology, the second and third biggest takeaways from the report, unsurprisingly plays a pivotal role.
2023 was a coming out party for generative artificial intelligence (GenAI). For the first time, the general public got to experience the magic and promise of this new technological age.
And while no one truly knows the upper-limits of AI, 42% of everyone we surveyed said they were already using AI for business purposes in 2023.
What’s interesting though, is that the number increases significantly in correlation with the number of properties owned and managed.
Fifty-three percent (53%) of respondents who manage more than 10 properties said they used AI with 47% saying they did not or were unsure if they did. Whereas only 34.4% of those who owned or managed 10 or fewer properties said they used AI for business purposes.
Beyond AI, technology in all its forms is an integral part of running a business in 2023. Four-fifths (80%) of all respondents said they used a property management system as part of their tech stack.
And though technology promises to make life easier, our respondents weren’t so sure about that. Technology was cited as the number one most common business challenge in 2023, followed by cleaning/maintenance, competition, generating more bookings and the economy.
Ironically, technology/software was also cited as the most common tactic for overcoming business challenges. While adjusting prices, marketing, and better hiring/training rounded out the top four.
There’s no other way to put it: the short-term industry is flying high.
Despite persistently high interest rates, increased competition and lingering worries of a recession, our respondents were optimistic about their prospects for 2023, with only a small fraction (less than 10%) predicting decreases in occupancy rates and average daily rates in 2024. And while we at Hostaway can’t lower interest rates, get rid of your competition, or predict the future, we are here to help you save money, gain a competitive edge and grow your business.
A big thank you to everyone who participated in our survey. And we’ll see you next year for the 2024 Short-Term Rental Report.