What's the STR forecast for 2023?
Member since 2022 · 4 posts · 6 votes
What's the STR forecast for 2023?
Most Popular Reply
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3yOpinions are like . . . you know.
Just because someone has been killing it for the last five years doesn't mean they are experts. If you want to know what happens with short-term rentals during a recession, talk to people that have been through a recession, not people that have only invested in an ideal market. Anyone investing in the last ten years - myself included - have had it easy. Go find some investors that have been around for at least 20 years. You'll find they have a few scars and stories to share that don't match the rosy picture painted by new investors that have never experienced a down market.
I know a very respected Property Manager in Florida. She has a great business and is seen as a leader in the management community, even though she's only been in the business less than 10 years. She got hit by the hurricane and within one week she was literally begging someone to buy her business because she couldn't handle it. I saw the same thing in the military. There were young guys in peak physical condition that would melt like chocolate in Death Valley the minute bullets start to fly. It's easy to look like a pro when all the conditions are in your favor.
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- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @V.G Jason:
For folks saying their bookings are already up or well reserved for 2023, what % of cancellations did you guys see in 2022 once it came to fruition?
I'm thinking 2023 may be a lot worse.
I only had two cancellations for 2023 but that spot is taken again within a week. We are full book until June though.
The STR in our market is very resilient because 50% is US tourists and the rest is international visitors. Also learning from history there's no seasonality factor except when there's Ironman, the price tripled. - 3yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Carlos Ptriawan:
Quote from @V.G Jason:
For folks saying their bookings are already up or well reserved for 2023, what % of cancellations did you guys see in 2022 once it came to fruition?
I'm thinking 2023 may be a lot worse.
I only had two cancellations for 2023 but that spot is taken again within a week. We are full book until June though.
The STR in our market is very resilient because 50% is US tourists and the rest is international visitors. Also learning from history there's no seasonality factor except when there's Ironman, the price tripled.Where is your STR?
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @V.G Jason:
Quote from @Carlos Ptriawan:
Quote from @V.G Jason:
For folks saying their bookings are already up or well reserved for 2023, what % of cancellations did you guys see in 2022 once it came to fruition?
I'm thinking 2023 may be a lot worse.
I only had two cancellations for 2023 but that spot is taken again within a week. We are full book until June though.
The STR in our market is very resilient because 50% is US tourists and the rest is international visitors. Also learning from history there's no seasonality factor except when there's Ironman, the price tripled.Where is your STR?
kona and maui
- 3yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Carlos Ptriawan:
Quote from @V.G Jason:
Quote from @Carlos Ptriawan:
Quote from @V.G Jason:
For folks saying their bookings are already up or well reserved for 2023, what % of cancellations did you guys see in 2022 once it came to fruition?
I'm thinking 2023 may be a lot worse.
I only had two cancellations for 2023 but that spot is taken again within a week. We are full book until June though.
The STR in our market is very resilient because 50% is US tourists and the rest is international visitors. Also learning from history there's no seasonality factor except when there's Ironman, the price tripled.Where is your STR?
kona and maui
Oh Hawaii, okay. Think that's a different ball game than standard 48 STRs.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @V.G Jason:
Quote from @Carlos Ptriawan:
Quote from @V.G Jason:
Quote from @Carlos Ptriawan:
Quote from @V.G Jason:
For folks saying their bookings are already up or well reserved for 2023, what % of cancellations did you guys see in 2022 once it came to fruition?
I'm thinking 2023 may be a lot worse.
I only had two cancellations for 2023 but that spot is taken again within a week. We are full book until June though.
The STR in our market is very resilient because 50% is US tourists and the rest is international visitors. Also learning from history there's no seasonality factor except when there's Ironman, the price tripled.Where is your STR?
kona and maui
Oh Hawaii, okay. Think that's a different ball game than standard 48 STRs.
That's precisely the reason Jason.
The STR is only possible when STR is located in the tourist destination. Just like in the good old days when actual BnB exists in the 90s....
Folks that are saying it's possible in 48 is because they are early and they capture the de-regulation era and perhaps manage the property well.
I'm looking at the problem from a very opposite angle. I see regulation as an opportunity.
There's zero reason the city/county/hotel business/your neighbor would not catch the Airbnb homeowner. This is not Uber business where Uber is going to fight for you to get legality status, Airbnb as a company would not help you because they do not have an interest in you.Airbnb is just saying I don't care about you, they do not have an investment with you.
You are competing with Hilton here at the first place where they pay hefty taxes. - 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Hey @V.G Jason, we had 2 cancellations for 2022 and they were booked up in less than a day. Both were AirBNB and they were booked by VRBO people.
Our home is on Lake Coeur d'Alene in north Idaho. There isn't a major hotel within 40 miles of our home. It is in a rural area about 36 miles down lake from Coeur d'Alene.
Our rental is seasonal for the most part. We are good from May to Oct. Usually booked solid. We are currently 30% booked for 2023 during those times. We end up about 49% occupancy for a year on average. This year we were about 52%. We have 2 bookings for 13 days in 2024.
I will say our bookings for 2023 are a bit slower than usual but things should pick up after Christmas. I am not concerned about the future of our property. It is a 5 star rated, family oriented place right on the lake. Summers are great and spring/fall are awesome for hiking and especially bike riding seeing as we are right on the Trail of the Coeur d'Alenes which is a 72 mile paved bike path that winds it's way along the lake, through woods and chain lakes.
Like most everyone has said, it all depends on the property. There aren't a ton of rentals in our area of the lake. Ours has the most reviews and all 5 star on both AirBNB and VRBO.
Past performance is no guarantee of future results, but there is no guessing on something like this. Hard work, preparation, proper setup and service goes a long way to assure a bright future.
- 3yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Michael Baum:
Hey @V.G Jason, we had 2 cancellations for 2022 and they were booked up in less than a day. Both were AirBNB and they were booked by VRBO people.
Our home is on Lake Coeur d'Alene in north Idaho. There isn't a major hotel within 40 miles of our home. It is in a rural area about 36 miles down lake from Coeur d'Alene.
Our rental is seasonal for the most part. We are good from May to Oct. Usually booked solid. We are currently 30% booked for 2023 during those times. We end up about 49% occupancy for a year on average. This year we were about 52%. We have 2 bookings for 13 days in 2024.
I will say our bookings for 2023 are a bit slower than usual but things should pick up after Christmas. I am not concerned about the future of our property. It is a 5 star rated, family oriented place right on the lake. Summers are great and spring/fall are awesome for hiking and especially bike riding seeing as we are right on the Trail of the Coeur d'Alenes which is a 72 mile paved bike path that winds it's way along the lake, through woods and chain lakes.
Like most everyone has said, it all depends on the property. There aren't a ton of rentals in our area of the lake. Ours has the most reviews and all 5 star on both AirBNB and VRBO.
Past performance is no guarantee of future results, but there is no guessing on something like this. Hard work, preparation, proper setup and service goes a long way to assure a bright future.
Not being near a hotel has gained you some serious longevity. I'm thinking the top 10% in each market will do better than previous years, the middle 60% do worse than average, and bottom 30% are on a thin rope. I'm thinking less overall bookings from upper upper middle class, and significantly less from the upper middle middle class. And a fraction from the middle class compared to 2021 and 2022.
Could be wrong, but I've already planned our two international family vacations for 2023 & am scouring for two domestic one's. When I get a sense from my usual family and friends most of them I think got hit with huge 2023 winter holiday expenses. I think it'll be a lot tighter net, but the best properties in the key markets will do a lot better I feel. I don't think the upper upper midle class will spend $400/night for B+, they'll shop the market to see the A+ for $500/night and make that the destination and for less duration.
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
@V.G Jason, I should clarify, there is a small hotel in the little town of Harrison. I have no idea what it brings in regards to numbers. There is also a small B&B as well. Never really looked into it either.
As a general rule, I look at those as non-competitors. Our home is 2700sqft and sleeps 10-12. You would need a bunch of rooms to hold a big family so we are a much better deal for a larger family get together.
I think the opposite of you on the folks booking. Our bread and butter are middle and upper middle class families. A place like ours (and others like it) are an easy sell. You can drive there, a bigger place can hold the whole family including grand parents and sibling families etc and is a good bargain.
I think places like Hawaii (fly to) destinations will take a greater hit. Flights are expensive, getting a big family there is tougher etc. Hawaii specifically has all the international travel that makes up for less US residents going so maybe not the best example.
Bottom line is that the economic downturn will effect people, but most people save up for a nice vacation to get away from the daily grind if they can.
I guess any of us could be wrong. It makes sense to be prepared if there is more of a downturn that we want/expect. Currently we have about 1 year of expenses in the bank for our STR. We have kept things at that level since the beginning. I know we could use that cash for other things, but I like having the buffer.
- 3yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Michael Baum:
@V.G Jason, I should clarify, there is a small hotel in the little town of Harrison. I have no idea what it brings in regards to numbers. There is also a small B&B as well. Never really looked into it either.
As a general rule, I look at those as non-competitors. Our home is 2700sqft and sleeps 10-12. You would need a bunch of rooms to hold a big family so we are a much better deal for a larger family get together.
I think the opposite of you on the folks booking. Our bread and butter are middle and upper middle class families. A place like ours (and others like it) are an easy sell. You can drive there, a bigger place can hold the whole family including grand parents and sibling families etc and is a good bargain.
I think places like Hawaii (fly to) destinations will take a greater hit. Flights are expensive, getting a big family there is tougher etc. Hawaii specifically has all the international travel that makes up for less US residents going so maybe not the best example.
Bottom line is that the economic downturn will effect people, but most people save up for a nice vacation to get away from the daily grind if they can.
I guess any of us could be wrong. It makes sense to be prepared if there is more of a downturn that we want/expect. Currently we have about 1 year of expenses in the bank for our STR. We have kept things at that level since the beginning. I know we could use that cash for other things, but I like having the buffer.
The 1-5% won't be changing their plans. The 5-10% will.
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
I guess we will find out! We certainly don't get the 1 percenters at our house.
- Investor · CO · Member since 2020 · 59 posts · 42 votes3y
Don't play from a position of fear. Planning, strategy and execution = results.
- Realtor · Branson, MO · Member since 2018 · 272 posts · 283 votes3y
STRs are here to stay. The top performers are going to do better, the bottom half will probably struggle more. Probably a great time to pick up another investment with prices declining. I'm extremely excited.
- 3yCole SchlackPro MemberRealtor · Hawaii, HI · Member since 2015 · 145 posts · 95 votesPrior to Covid I had STR's in Idaho, Utah, AZ, Boston and NH. They did ok breaking somewhere even over a 10 year period, then Covid came and everything doubled Occupancy, Rate and then Value. I Sold them, made some great appreciation , now as people return to normal vacation travel occupancy and rates are bound to go back to normal, people that bought them at double the price are going to have a hard time. I would only invest in a Resort area and I would look back at rental rates and Occupancy pre-covid.
Quote from @Isan Sahoo:
Hello everyone,
As a prospective investor in short-term rental, I would like to get some feedback regarding the upcoming demand for short-term rental. Considering the current economic climate, where layoffs are happening every other day, and interest rates are going off the roof, is it a good time to invest in STR or wait for some time? Also, in this market, will people go on vacations and spend money on STR?
- Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes3y
Quote from @Jenni Vega:
@Carlos Ptriawan
Respectfully disagree with you here. As a Superhost with 5 rentals across different markets and states, this is not the case. This is what one would assume, but this just isn't so. My small town Oklahoma, and my larger city Wisconsin Airbnb's get a similar cash on cash return as my Smokies Tennessee, and Grand Canyon Arizona rentals do.
People need lodging EVERYWHERE. And the Airbnb gurus out there - Avery Carl, Kai Andrew, Robbuilt, are they preaching to buy in Toledo, Ohio? No. They are preaching to buy in the Smokies and Myrtle Beach.
So what is going to happen to the Smokies and Myrtle Beach? Over-saturation.
While I am thoroughly enjoying being one of only 6 Airbnbs in the entire town of Podunck Oklahoma and where I am in Wisconsin, is not over-saturated yet.....not a single guest is coming to these places for a "vacation."
@Jenni Vega Wanted to chime in on the traveling for leisure note. I'm also a super host and advisor to people wanting to start a short-term rental portfolio in Oklahoma City. Although we're more densely populated with about a million in the metro area than where you likely own in OK, we also have a low vacancy rate and very few of our occupants are on vacation. There's so much medical traffic in Oklahoma City with the biggest and best hospital in the state. Work travel is a common denominator with our guests. Could that be impacted by the downturn? Of course! But I agree that it's not as obvious or straightforward as downturn=less vacations=don't position properties as short term rentals.
- Real Estate Agent · Kansas City, MO · Member since 2022 · 147 posts · 40 votes3y
Quote from @Isan Sahoo:
Hello everyone,
As a prospective investor in short-term rental, I would like to get some feedback regarding the upcoming demand for short-term rental. Considering the current economic climate, where layoffs are happening every other day, and interest rates are going off the roof, is it a good time to invest in STR or wait for some time? Also, in this market, will people go on vacations and spend money on STR?
Here in KC, we have investors making loads of cash with the STR market. I personally have some coworkers with AirBnb's. Give me a shout anytime, I'm always free to talk shop
- Member since 2022 · 5 posts · 1 vote3y
My STR is around St. Pete area in Florida. Anybody have a prediction for 2023 in that region?
- 3yMichael BaumPro MemberOlympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
Let me see. *vigorously shakes the 8 ball...*
All signs point to yes!
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Alyssa Dyer:
Quote from @Jenni Vega:
@Carlos Ptriawan
Respectfully disagree with you here. As a Superhost with 5 rentals across different markets and states, this is not the case. This is what one would assume, but this just isn't so. My small town Oklahoma, and my larger city Wisconsin Airbnb's get a similar cash on cash return as my Smokies Tennessee, and Grand Canyon Arizona rentals do.
People need lodging EVERYWHERE. And the Airbnb gurus out there - Avery Carl, Kai Andrew, Robbuilt, are they preaching to buy in Toledo, Ohio? No. They are preaching to buy in the Smokies and Myrtle Beach.
So what is going to happen to the Smokies and Myrtle Beach? Over-saturation.
While I am thoroughly enjoying being one of only 6 Airbnbs in the entire town of Podunck Oklahoma and where I am in Wisconsin, is not over-saturated yet.....not a single guest is coming to these places for a "vacation."
@Jenni Vega Wanted to chime in on the traveling for leisure note. I'm also a super host and advisor to people wanting to start a short-term rental portfolio in Oklahoma City. Although we're more densely populated with about a million in the metro area than where you likely own in OK, we also have a low vacancy rate and very few of our occupants are on vacation. There's so much medical traffic in Oklahoma City with the biggest and best hospital in the state. Work travel is a common denominator with our guests. Could that be impacted by the downturn? Of course! But I agree that it's not as obvious or straightforward as downturn=less vacations=don't position properties as short term rentals.
I always smiling when got reply like this :)
So I immediately opened Airbnb, I checked in OKC for booking next week in January, with super host status and entire place reservation. There are already 736 Superhost in this city, way too many. Then I checked the first seven hosts' booking for January, and all of them only have 4 to 6 days of booking for January. LOL
First, becoming super host itself means nothing as everyone is super host, and second, even the highest feedback host doesn't have a good booking number for the next 30 days.
....Just imagine why someone that has a million dollars sitting in CA would build Airbnb-approved STR in the middle of Toledoville or Arkansas.....while there are not many demands over there too. - 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Dan H.:
Quote from @Brittany Stradling:
Quote from @V.G Jason:
How can you tell? Aren't STRs going to be the quickest hit? Historical numbers will mean very little if in a recession and if anything will be misguided. Discretionary spending is going to be at the lows, question is how low is low?Quote from @Brittany Stradling:
If the numbers work, go for it. There is never a perfect time to invest. Last year, the market was on fire and it was hard to find a deal. Now, it is a fairer market but the interest rates are higher. You can always refinance. Yes, we are in a recession. People still travel during recessions; they just don't take big trips. So, if your investment is in a vacation market like the smokeys or Myrtle Beach, it will perform well assuming you're a great host.
Now from an investment standpoint, I would assume when it's in the lowest demand it's the best time to buy but if this STR could be a LTR you're playing in that same market. If it's strictly a STR market, you can see how prices fair to see if the market is feeling the heat.This is what Avery Carl preaches and this is her strategy. She always says STRs in vacation markets are basically recession proof.
>Avery Carl preaches and this is her strategy. She always says STRs in vacation markets are basically recession proof.
The Avery’s had no STRs at the Great Recession (GR), so I question their basis for the comment and have heard their theory about drivable destinations.
As someone who had (still have) STRs at the GR with a current population in excess of 20 million within a 2 hour drive (not sure what population was as GR, but it was high), I can state their theory was BS for the GR. The STRs with 20m population are beach area of San Diego (Mission Beach), we also had 2 STRs at Gulf Shores Alabama (no longer own these). Our San Diego STRs were 7 years old in 2006 (started STR in 1999). Gulf Shores were maybe 4 years old. Our occupancy fell so low that we converted the San Diego STRs to LTR in the school year and STR in the summer. This is because we were not even hitting 20% occupancy in the school year months. I do recognize the GR is an extreme case and hopefully we do not experience anything similar to GR.
So their theory does not match my reality as someone who actually had well established STRs at the GR.
I suggest you be leery of people who present theories without any experience related to their theory.
Also people who make money by having people purchase STRs have vested interest in under representing the associated risks. Not stating the Averys are intentionally doing this, they may simply be stating an opinion without the associated experience
Good luck
The chickens always come home to roost.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Victor S.:
where's avery and her hubby? Bueller...
It's semi-recession era in STR-landia..... not that bad, but not that great.
I read occupancy read nationwide now is moving back to pre-covid era, maybe less. - Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes2yI certainly believe this, as I hear it a lot- here on BP, as well as from clients who invest elsewhere. But it's strange to me, as here in my backyard my clients and I are rocking and rolling- we have it dialed in and we get solid returns. It IS fiercely competitive, though- you have to approach it just right, to get the tasty STR cakes.
Quote from @Carlos Ptriawan:
Quote from @Victor S.:
where's avery and her hubby? Bueller...
It's semi-recession era in STR-landia..... not that bad, but not that great.
I read occupancy read nationwide now is moving back to pre-covid era, maybe less. - 2yLevi BennettPro MemberReal Estate Broker · Charlotte, NC · Member since 2014 · 285 posts · 248 votes
Agreeing with @Carlos Ptriawan, it is a bit of a post-recession for STRs.. HOWEVER, there are certain areas that are dealing with different layers, like.. massive migration to the Southeast Region of the US, which means tourist areas near those areas (beaches and mountains) are still exploding and breaking records for STR market cap (money spent by guests on rentals). So, I think it definately takes more savvy these days, but there is still low hanging fruit in the Carolinas, Georgia and Florida everywhere I look.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Levi Bennett:
Agreeing with @Carlos Ptriawan, it is a bit of a post-recession for STRs.. HOWEVER, there are certain areas that are dealing with different layers, like.. massive migration to the Southeast Region of the US, which means tourist areas near those areas (beaches and mountains) are still exploding and breaking records for STR market cap (money spent by guests on rentals). So, I think it definately takes more savvy these days, but there is still low hanging fruit in the Carolinas, Georgia and Florida everywhere I look.
There's a specific problem when STR assets in the condo located in FL.
I heard in FL some condo HOAs have a one-time reassessment fee in the size of 100k. This is something related to HOA/insurance. Hence the condo owners are rushing to sell before a certain deadline. The number of condo being sold there is increasing rapidly.
Meanwhile, in other areas it's simply a supply/demand issue. Like in Phoenix lot of new SF inventory as well, I am not surprised if those are second house or ex-STR.
- Member since 2023 · 78 posts · 37 votes2y
Quote from @Isan Sahoo:
Hello everyone,
As a prospective investor in short-term rental, I would like to get some feedback regarding the upcoming demand for short-term rental. Considering the current economic climate, where layoffs are happening every other day, and interest rates are going off the roof, is it a good time to invest in STR or wait for some time? Also, in this market, will people go on vacations and spend money on STR?
While economic uncertainty typically dampens discretionary spending, including vacations, there remains a segment of travelers who prioritize unique and budget-friendly lodging options that STRs offer. Additionally, domestic travel may see a boost as people seek local getaways over expensive international trips. However, the increased cost of borrowing and potential downturn in consumer spending suggest caution. It might be prudent to monitor market trends closely and consider waiting for more economic stability before making significant investments in STRs.
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