Is Year over Year data on STRs still wonky because of COVID?

Question

I just got my AirDNA membership and have been researching markets. I've noticed that for most markets, even highly valued ones, the numbers are down YoY. Is that because in early 2023 there was still a COVID and work from home impact? Or are people generally spending less money in this sector. I'm currently looking in South Central VT and it's not terrible but numbers are definitely off. Open to insights from anywhere though. Thanks! David

Sarah Kensinger · Answer

VT is very seasonal which is why the data looks bad. If you're really interested in that market, I would suggest talking with some local STR PM companies and see what they say about the numbers.

Michael Baum · Answer

Hey @David N., I think it is exactly the opposite. COVID didn't play a role in 2023 like it did for 2020 to 2022.

Owners who bought in 2021/2022 basing their estimates off of COVID time occupancy have been sorely disappointed in 2023.

2023 is essentially back to what it should be. Many saw a huge boost in occupancy and nightly rates during the pandemic. People looking for ways to get away without running afoul of mask mandates etc. took a lot of vacations at private homes in rural areas or whatever.

Now that the pandemic is over, people are traveling in more traditional ways. Overseas, Hawaii, cruises and the like.

If you have a great place in a great area, you can still be doing well. Just not like it was a couple of years ago.

Andrew Steffens · Answer

Chiming in from Florida - We are having YoY growth in 2016/17/18/19 and then an explosion in 20/21/22.  Florida was one of the few open states during those years and you could rent a trailer for $500 a night basically.  Now that everything is open demand has normalized.  Definitely a market correction as the lower rates and demand have forced a lot of lower quality properties out as well as equity rich investors here as well.  We are actually up 14% bookings YoY 2023-24 so I am still optimistic about the market overall, but it likely will never be like 20-22 ever again.

David N. · Answer

@Michael Baum I appreciate your reply. So then would you say that if YoY is down that I should take it as legit that there is less money flowing into that market? Because maybe I should be looking with our friend @Andrew steffan  in Florida. Florida is not my jam, but I suppose you can't argue with the investment potential and I need to put that first, over my own use of the property.

@Andrew Steffensundefined

Zachary Cain Humphrey · Answer

2023 data is nearing where it should be. There are markets that have been forever changed since covid such as Logan Ohio that was essentially noting pre covid to what it is today. Some markets boomed and then died once covid travel died down making those markets especially competitive now that demand was down but supply was high. At the end of the day each and every market is different, competition different, etc. Ultimately a good plan moving forward in my opinion is looking for secondary and tertiary markets that are fed by the larger saturate markets near them and really hunting for those undiscovered areas. Many gems still exist.

Michael Baum · Answer

Not necessarily less money. There could be a ton of different reasons. More STRs available, lower demand overall, other places with new, greater draws...all sorts of things can impact an area's numbers.Florida is a place that has a lot of draw, but has a lot of competition. Say you want to be near Disney. It can be done but there are 10's of thousands of STRs. Lots of competition so you need to buy in the right place with the right amenities. Like @Sarah Kensinger said, VT is very seasonal. You need to make the most hay in a shorter amount of time than you would in Florida. It's like our place in Idaho. We have 5 months plus a few weeks here and there to make it work. Which we do because we plan accordingly.

You need to decide what kind of risk you can tolerate. I wouldn't go to Florida if you don't really like it unless it is strictly a cash flow play. If you want to be in south VT, then plan for that. Look for the right property at the right price and go. Just be aware that there are thin times each year you need to plan to make it through.

Chai Xiong · Answer

I'm over here by Disney World.. @Michael Baum hit every points

Is Year over Year data on STRs still wonky because of COVID?

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