STR Market. Starting to return?

Question

Hey, guys. Just doing some research on general vacationing here in America. As well as some preliminary research into buying my own property one day.

Wanted to see how the market is holding up for STR investors? I'm sure it was hard first part of 2020, but has it started picking back up for you?

Thanks for the insight.

Melissa Bovee · Answer

It more than picked back up over the summer in my market and many others. The strongest STR markets have been drive to vacation destinations. The STRs in urban cores have suffered much more than traditional vacation destinations.

Wyatt A Brady · Answer

Excellent data... music to my ears!

Nathan Gesner · Answer

Short-term rentals were completely dead because of the shutdown. I have a friend that manages about 65 rentals and almost every single reservation was canceled by late March. No new reservations were made until late May, early June.

By June, everything was booking up like crazy. By July, calendars were packed and prices were higher than usual. It was a very good summer and remained strong a month longer than usual.

People were afraid of COVID-19. They wanted to vacation, but they didn't want to fly or stay in hotel with other guests. It was a perfect situation for short-term rentals and I suspect most owners made at least what they normally would. All the rentals in our community out-performed previous years.

Wendy Schultz · Answer

We had a phenomenal year in our drivable destinations in Wisconsin. Some of our properties did 2-4x what they did last year. Our urban market was not good and our Disney market was meh. I agree with the comment above that we're getting many last minute bookings vs planning far in advance. However, we are starting to see a steady stream of bookings coming in for next summer already.

Brian Maloney · Answer

Here in the Orlando area, pool homes have done extremely well and homes that have amenities that allow them to stand out. With a slight shift in the type of traveler that can now work, go to school and vacation all at the same time we have seen a more consistent calendar. Slow season is not as slow as normal years. For those rental companies that don't rely on tour operators or international travel, this year has been a relatively large success. Great opportunity to purchase rentals with lots of international buyers listing their homes.

Paul Sandhu · Answer

EVERY year I get inquiries from my Airbnb ad for renting out my big house for Thanksgiving and/or Christmas.  I turn them away, since my minimum stay is one week and they probably can't afford what I charge.  This is the first year I have not had any inquiries.

Melissa Wesling · Answer

@Wyatt A Brady the recent studies are predicting that travel tends will stay the same, at least through the summer, with shorter distance domestic travel to remote locations rather than urban.  Vrbo reported that 62% of respondents plan to travel to a "outdoorsy" location (I assume this means both beach and ski), 82% of families have already planned their 2021 vacations with a 25% surge in remote locations.

I personally don't think the bookings will drop-off.  Even if some begin international travel, the people who weren't traveling at all last year will begin to ease back into travel to domestic markets.  I think the remote working trend will also continue for many at least through the first half of the year, keeping the "flexcation" trend going.  I think you are safe in a "ski/outdoorsy" market, especially if it's an area that is already drawing in tourists!

Wyatt A Brady · Answer

So where do we think it will go from here? Obviously AirBnB is here to stay, but from my anecdotal evidence, people are itching to travel further (especially international). I'm running numbers based off of current vacancy rates, but I feel like I may be overestimating because my market is in a drive-to destination, and I imagine that will drop off a bit in 21/22 once people can vacation in Mexico, etc.

I am looking at a skiing/outdoorsy community, hoping that those vacations wont drop off as much as the beach destinations.

Kerry Baird · Answer

I’m singing the same song...barrier island of the East Coast of Florida. Lost bookings early, picked them up later. Have more last minute bookings, some home school families, some work remote people, many driving from another spot in Florida, or North Carolina. Snowbirds coming as normal.

Brian G. · Answer

@William Shropshire been slammed since May

STR Market. Starting to return?

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