Market Data: How Coronavirus Has Affected Short-Term Rental Occupancy

Market Data: How Coronavirus Has Affected Short-Term Rental Occupancy

3 min read
Avery Carl

Avery Carl is a top 1 percent real estate agent and CEO/founder of The Short Term Shop, a national real estate firm that represents and mentors investors in the buying and selling of investment properties in the top short-term and vacation rental markets in the U.S.

Experience
Avery bought her first investment at the age of 26 on a $37,000 salary, and through strategically investing in mature vacation rental markets, scaled her portfolio to 30 doors (a mix of both vacation rentals and traditional long-term rentals) and achieved financial freedom by age 30. The Short Term Shop helps investors acquire short-term rental properties in the most recession-resistant markets and mentors them using the methods that led her out of the corporate rat race and into financial freedom.

On the sales side, Avery has connected investors with over $100 million in cash-flowing vacation rental investments since 2017 and was named the Tennessee Association of Realtors “Rookie of the Year” in 2017.

Press
Avery has been sharing her knowledge on how to use vacation rentals as a vehicle to accelerate cash flow and scale investment portfolios quickly on the BiggerPockets real estate network for four years, most recently serving as a speaker at the BiggerPockets Conference in 2019. She’s also appeared on two BiggerPockets Real Estate Podcast episodes, #364 and #375, as well as contributed to the BiggerPockets YouTube channel and blog.

In addition, she has written articles for USA Today, Realtor.com, Yahoo Finance, U.S. News & World Report, and the Turnkey Vacation Rental Blog. She has been a guest on the Joe Fairless Best Real Estate Investing Advice Ever podcast on two occasions, as well as on Real Estate Money School, Investing in the U.S., School for Startups, Wealth Without Wall Street, and Flipping America.

Education
Avery earned a Bachelor of Science from the University of Texas, as well as a Masters of Business Administration (Marketing) from Belmont University.

Accreditations
Licensed real estate agent in Tennessee, Florida, and Alabama.

Follow
Instagram @theshorttermshop
Twitter @shorttermshop
The Short Term Shop on Facebook
TheShortTermShop.com

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Today, I’m here to give you a state of the market—or state of the occupancy, more specifically—update on how the coronavirus has affected the three major types of short-term rental markets in the country.

First, I’ll give you a little information about the data that we have. My friends over at Key Data pulled the occupancy data for March, April, and May 2020 in comparison to March, April, and May 2019, which was just a regular year, to show us the difference in occupancy for each month.

We pulled this data on April 1st.

So both the April and May data are future data. Therefore, I’ll discuss this as a two- to three-part series. I plan to do another analysis at the end of April and then at the end of May to show any potential changes in occupancy and also to give you a forecast for the summer.

3 Vacation Rental Markets

Now we can get into the three types of vacation rental markets and/or short-term rental markets, and the sample data that we used for them.

So the three major types are:

  1. Major metro markets: These are not tourism-driven markets. These are markets where it’s been historically more normal to rent a hotel up until the past 10 years instead of renting a short-term rental. The sample that we used for these includes Austin, Los Angeles, Seattle, and Washington, D.C.
  2. Fly-to vacation rental markets: These are the tourism-driven markets that people go to on vacation. There’s not a lot of other industry besides tourism, but they’re a little more remote, so you have to fly to them. The sample that we used includes the Hawaiian Islands, Orlando, Telluride, and Jackson Hole.
  3. Regional drivable vacation rental markets: The majority of the tourists that visit these markets are coming in cars rather than in planes. These are also places that don’t have a lot of industry and are mostly driven by tourism. The samples that we used include Myrtle Beach, South Carolina, the Outer Banks in North Carolina, Tennessee Smoky Mountains, and Panama City Beach.

I’m not going to go through each and every market here with you because we could be here all day. What I am going to do is go through each of the three major types of markets and give you averages of what the occupancy in 2020 looks like versus the occupancy in 2019 for the metro markets.

Related: Airbnb & Coronavirus: How to Survive Short-Term Rental Losses

The State of the Markets: 2020 vs. 2019

Metro Markets

March 2020 finished out at 48 percent of 2019 occupancy. Looking forward, April 2020 is currently sitting at 41 percent of 2019 occupancy, and May 2020 is currently sitting at 67 percent of 2019 occupancy.

As a whole, from March through May, the major metro markets are sitting at 52 percent of their counterpart in 2019.

Fly-to Markets

Fly-to vacation rental markets for March 2020 finished down at 61 percent of 2019 bookings. April 2020 is currently sitting at 64 percent of 2019 bookings, and May 2020 is currently sitting at 81 percent of 2019 bookings.

So as a whole, on average, the fly-to vacation rental markets are sitting at 69 percent of 2019 bookings.

Related: How Airbnb, VRBO, & Other Vacation Rental Platforms Are Helping Hosts

Drivable Markets

Drivable vacation rental markets for March 2020 finished out at 64 percent of 2019 occupancy. Looking forward, April 2020 is currently sitting at 77 percent of 2019 occupancy and May 2020 is currently sitting at 85 percent of 2019 occupancy.

That means the drive-to vacation rental markets as a whole, currently (but this will change), are sitting at 75 percent of 2019 occupancy for March through May.

Key Takeaways

So, the data show that the metro markets are being hit the hardest. We’re all being hit hard—let’s not kid ourselves—but the metro markets are being hit the hardest. This is followed by fly-to vacation rental markets with drive-to vacation rental markets coming in third (or the first most stable in this current situation).

Again, we will re-pull the data at the end of April, because things will change. I expect all three of these to drop a little bit. Hopefully not significantly, but I do expect them to drop. And I am hoping they will start to trend back up in May. But that’s yet to be seen.

You guys stay safe and stay healthy.

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Questions about short-term rentals in the midst of the COVID-19 crisis? 

Ask me in the comment section below.