Homeowners are bringing short-term rentals online faster than guests can book them, even as demand for short-term rentals is booming. It’s presenting a new headwind for investors looking to cash in.

With the industry and the market changing faster than ever, make plans to come together with the best community in real estate at our flagship event. Join us at Inman Connect New York, Jan. 24-26, and punch your ticket to the future. Check out these just announced speakers for this must-attend event. Register here.

The rest of summer remained peachy for short-term rental hosts, as daily rates reached a new high, nights booked were up 17 percent and demand continued to spike.

And homeowners are rushing to get a piece of the action. The number of listings on short-term rental platforms was up 23 percent in August compared to last year, according to a summer outlook by short-term rental data source AirDNA.

That glut of new listings is one of several headwinds facing an industry that, by every other account, is in the midst of a gold rush. Average daily rates (ADRs) grew at a slower pace that didn’t keep up with rising costs caused by inflation.

“Due to the supply increases, hosts have faced an uphill battle in the effort to have cover costs with high inflation, currently tracking above 8 percent in the U.S. as per the August Consumer Price Index (CPI),” the report said. Average daily rates (ADRs) “were up a scant 2.8 percent year over year in August, following a 3.8 percent ADR increase in July.”

“The addition of more listings nationwide, rising labor costs and the persistent inflation will continue to put pressure on revenue per available listing (RevPAR), which hit record levels in 2021,” it said.

Occupancy rates fell in August compared to the same time last year. At 63.8 percent nationwide, the occupancy rate remains 7.1 percent above pre-pandemic levels.

That’s not to say short-term rental owners struggled this summer. Average daily rates are now at $288 per night, which is 22.8 percent higher than in 2019, the report said.

Demand was up 19.8 percent in August compared to the year before and it grew through the summer. In July, demand was up 17.8 percent.

The low rates many homeowners have may be pushing some of them to list their homes as short-term rentals rather than sell them, according to Redfin’s deputy chief economist Taylor Marr.

“There was a surge of available listings on short-term rental platforms just in August,” Marr said. “It’s coinciding perfectly with where we’d normally expect them to hit the for sale market.”

Occupancy rates fell 4.3 percent, the sixth-straight month with declines.

Eventually, the increase in available homes — both through lower occupancy rates and higher supply — could put a strain on nightly rates.

“When comparing the performance across 265 U.S. short-term rental markets as defined and collated by AirDNA, we see that the markets with the highest year-over-year increase in listings (40 percent growth or more) are seeing the sharpest decreases in occupancy, ADR and RevPAR (Revenue Per Available Rental),” the report said.

Email Taylor Anderson

Get Inman’s Property Portfolio Newsletter delivered right to your inbox. A weekly roundup of news that real estate investors need to stay on top, delivered every Tuesday. Click here to subscribe.

websites
Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×