STR slowing down/crash or ramping up?

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STR slowing down/crash or ramping up?

Real Estate Agent · San Diego, CA · Member since 2017 · 99 posts · 52 votes

I've researched attempting to locate data. So far, it's all predictive analysis. I want to hear from the actual STR operators, how has your business been impacted since March 2022 when the market shifted until now? Increase in bookings or overall decrease besides seasonal cycle?

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Nick Duncan

Member since 2020 · 2 posts · 9 votes

Palm Springs area. Have dropped rates significantly and occupancy a fraction of what it was last year. Not really worried as have cheap debt and we enjoy using it which we haven’t been able to do for the last year or so. But can’t understand who these people are who are still buying out there. The danger of relying on Airdna data I guess.

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Lisa Graesser
Rental Property Investor · The Villages, FL · Member since 2017 · 341 posts · 398 votes
3y
No decrease in bookings, I get inquiries daily for peak season Jan-March 2023 and 2024. I am booked through April with direct bookings in May, June and October. I think demand is determined by the popularity of the area where your rentals are located.
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Nick Duncan
Member since 2020 · 2 posts · 9 votes
3y
Palm Springs area. Have dropped rates significantly and occupancy a fraction of what it was last year. Not really worried as have cheap debt and we enjoy using it which we haven’t been able to do for the last year or so. But can’t understand who these people are who are still buying out there. The danger of relying on Airdna data I guess.
7 Reply
Trish Mccoy
Real Estate Agent · Grass Valley, CA · Member since 2017 · 185 posts · 198 votes
3y
I have 11 doors and some properties last year were on the decrease. I think that is mainly because of the surge of STR properties in my area. Some of them were constantly book, especially the smaller ones. I did use a combination of MTR and STR and continue to do so. I find that is a good way to fill in the gaps. I haven't really started booking up for 2023 - except for a couple of properties.
2 Reply
Brian Barch
Member since 2022 · 272 posts · 253 votes
3y
Are you asking when compared to 2021 (the anomaly super year)? Or compared to a normal year like 2019?

I don’t think 2021 was ever intended to last
3 Reply
Luke CarlPro Member
Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
3y
Steady as she goes for my 8 properties in 4 different vacation markets. Prices are higher than last year at the moment and bookings seem about normal to me.
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Brooklyn McCarty
Investor · Member since 2022 · 1k+ posts · 754 votes
3y
Our lead stones are shorter, but we are good
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Andrew SteffensBusiness Member
Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
3y
Tampa Bay area - We have slowed a bit in 2022 compared to 2021 and 2020, likely due to the following:
1. Florida surged during COVID
2. Many new properties on market.
We are still stronger than 2019. I think some of the newbies will weed themselves out and we will continue to be strong, as we have some of the best beaches in the country.
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
3y
I see no change. Bookings are still strong. We increased pricing on our Pigeon Forge cabin based on strong demand for this property.
I saw something on the news last week that talked about strong demand for travel. I think the biggest issue is saturation of certain markets.
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John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
3y
I’d bet a good amount of money that 2023 will not be as good as 2022. Looking at other properties in the area, I see A LOT of empty calendars for February and March in the smokies. Will be interesting to see how it all plays out. If we get through these next 3-4 months unscathed I think the bull market will continue….but we are at an inflection point.
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Patricia Andriolo-Bull
Member since 2022 · 527 posts · 413 votes
3y
In my Marco Island condo, having my best quarter in Q1 2023. Fully booked with my highest rates yet. That said, I did see a slowdown in Sept - mid-December (note, I took the property off the market for a 5 week reno in Fall but I still saw a drastic decrease in views and bookings prior to that compared to 2021). It doesn't appear that Marco Island had a decrease however. I did notice my listings had dropped dramatically in ranking so I did some listing updates which seems to have helped. I have a condo in Punta Cana which is not doing well. It still has not recovered from the alcohol issues of 2019 into COVID. I was hoping for a rebound this year but it's still less than I had hoped for. Not sure if international travel is different.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
We have one place that is already booked for half of '23. Another place is a 'little' slower than last year at this point and was down a little over '22.
So it depends entirely on your location and to a much lesser extent, the economy.
My feeling is that this slowdown will continue for a while and wash out all the people who got in because it was the 'cool thing to do'. But the STR industry, in general, is only heading upward as more people discover the concept and switch over from hotels to STRs....
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Patricia Steiner
Real Estate Broker · Hyde Park Tampa, FL · Member since 2019 · 2k+ posts · 3k+ votes
3y
Tampa Bay remains hot...the industry results show over 30% increase in revenue from previous year and bookings are up 10% year-over-year. Our hotel industry is a real force and zoning for vacation rentals is limited as a result - but where it is legally available, it is thriving. There's just one problem: inventory. It's very limited to non-existent but it's worth stalking and buying right.
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y
Quote from @Dulce Beltran:

I've researched attempting to locate data. So far, it's all predictive analysis. I want to hear from the actual STR operators, how has your business been impacted since March 2022 when the market shifted until now? Increase in bookings or overall decrease besides seasonal cycle?

The number of bookings are about normal for 2019, lower than 2020/2021. Prices are slightly higher. I believe people haven't really started tightening their belt yet and we may see it slow down in summer 2023.
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John WilliamsBusiness Member
Property Manager · Clarksville, TN · Member since 2018 · 443 posts · 210 votes
3y
My market seems to be over-saturated with operators. STR works for certain markets and with certain properties.... But I am seeing a lot of people trying to force it to work or hope that it works in the wrong market or with the wrong property. Lots of folks are listing their properties as MTR's as a plan B or simply selling.
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V.G JasonPro Member
Investor · Member since 2022 · 3k+ posts · 3k+ votes
3y
Quote from @John Williams:

My market seems to be over-saturated with operators. STR works for certain markets and with certain properties.... But I am seeing a lot of people trying to force it to work or hope that it works in the wrong market or with the wrong property. Lots of folks are listing their properties as MTR's as a plan B or simply selling.

You're talking about Clarksville specifically? Or do you invest in other STR markets?

As for bookings, I think talking about bookings for 2023 and 2024 are premature right now. Whatever % you're showing booked, be happy if you get 75% of it. I think only the standout STRs will get that. I expect cancellations at some point to happen faster than bookings in the Q1-Q2 turn. I have four family friends that invested in the Smoky Mountains, Blue Ridge and Scottsdale. All look good Q1 '23 but they told me over Christmas they're seeing some cancellations. Their Nov23-Mar24 Scottsdale booking by the same people they've had since 2017 cancelled on them on New Years eve. That's a niche booking that covers their entire year + some.

edit: If you invest with inspirato or whatever that company is called, ask them about force majeure clause on their pro forma they sent you that materialized into an agreement. if we enter a recession, they might call on something.
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Nick Duncan
Member since 2020 · 2 posts · 9 votes
3y
Quote from @John Williams:

My market seems to be over-saturated with operators. STR works for certain markets and with certain properties.... But I am seeing a lot of people trying to force it to work or hope that it works in the wrong market or with the wrong property. Lots of folks are listing their properties as MTR's as a plan B or simply selling.
I don’t know if it’s as forced as people think. My view is that most people aren’t calculating the cash on cash returns on an after tax basis. Take someone with 2m of net income in 22. 6m or so of STRs with 20% down will essentially wipe out their tax bill. So they put down 1.2m but saved 1m in taxes. Once you re run the numbers at 200k down they look very attractive vs other investment options. More and more non RE pro high income earners are catching onto this which I why I think that pretty soon it’s going to be hard to get STRs to pencil if you can’t take advantage of this. Unless the tax code changes of course.
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Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y

It's great that people are still interested in traveling and enjoying themselves. But it's important to remember that when demand is high and there is a limited supply of accommodations, prices will naturally rise. We made the decision to increase pricing on our Pigeon Forge cabin as a result of this trend, but we also want to make sure that everyone can still enjoy their stay without breaking their budget too much. Hopefully, by managing our pricing carefully, we can ensure that people can continue to visit and explore new areas without overspending!
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Deborah Vaupen
Santa Monica, CA · Member since 2014 · 6 posts · 0 votes
3y
Here in the Santa Monica area, so far so good. I have lots of bookings through summer 2023. I agree with the general consensus that location seems to matter most.
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Leslie Anne Morris
Real Estate Agent · Smoky Mountains, TN · Member since 2022 · 1k+ posts · 984 votes
3y
Booking lead time greatly reduced, back to school was a bit lower than it had been during covid since there was no school. All in all still booking well.
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Rick BassettBusiness Member
Property Manager · Greater New Haven, CT · Member since 2010 · 377 posts · 434 votes
3y
STR bookings seem to be much slower in our area. Ours had no activity over the holidays (Thanksgiving thru Xmas), which is extremely unusual. I've talked to several local Airbnb operators, and they said their December was pretty dead. I suspect the number of travelers to our area has remained constant over the last few years, but the number of properties/Hosts has increased substantially. Connecticut isn't a vacation destination, but it's a 'coming home for Christmas' destination often emulated in those Hallmark movies.
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John Carbone
Realtor · Gatlinburg · Member since 2020 · 1k+ posts · 957 votes
3y
Quote from @Leslie Anne Morris:

Booking lead time greatly reduced, back to school was a bit lower than it had been during covid since there was no school. All in all still booking well.
What would you estimate your average lead time is now?
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Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Dulce Beltran:

I've researched attempting to locate data. So far, it's all predictive analysis. I want to hear from the actual STR operators, how has your business been impacted since March 2022 when the market shifted until now? Increase in bookings or overall decrease besides seasonal cycle?

Just look at Evolve's income estimate for a few houses, it is scary. I'd rather do LTR.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
Quote from @Carlos Ptriawan:

Quote from @Dulce Beltran:

I've researched attempting to locate data. So far, it's all predictive analysis. I want to hear from the actual STR operators, how has your business been impacted since March 2022 when the market shifted until now? Increase in bookings or overall decrease besides seasonal cycle?

Just look at Evolve's income estimate for a few houses, it is scary. I'd rather do LTR.

Their income estimate is just that. No value to these predictions...
2 Reply
Wilson Hunter
Investor · Greenville, SC · Member since 2020 · 210 posts · 302 votes
3y
One problem with these threads is that "STR" is such a broad category. An urban condo in Detroit listed on Airbnb and a Smoky Mountain cabin are both considered STRs. I'm personally excited about investing in and operating vacation rentals and am confident that renting cabins and beach houses in classic vacation destinations is a timeless business model and isn't going anywhere.
5 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Wilson Hunter:

One problem with these threads is that "STR" is such a broad category. An urban condo in Detroit listed on Airbnb and a Smoky Mountain cabin are both considered STRs. I'm personally excited about investing in and operating vacation rentals and am confident that renting cabins and beach houses in classic vacation destinations is a timeless business model and isn't going anywhere.

200% !
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