Shift Take
Texas may be the future of the vacation rental market.
Elizabeth Casolo
Short-term rentals in cities and suburbs are struggling with their occupancy rates. At Skift’s Short Term Rental Summit, AirDNA chief economist Jamie Lane said the “mass exodus” of people from certain countries is redefining where guests stay.
As more people move to states like Texas and Florida, there has been a shift in US travel trends.
“These locations lead to people vacationing in completely different markets,” Lane said.
Occupancy is below pre-Covid levels. But AirDNA showed how the coastal, lake, mountain, small-town and rural vacation rental markets are doing well compared to 2019.
Everything is bigger in Texas
AirDNA looked at the changing demographics of the feeder – or origin – markets for those staying in short-term rentals. For example, someone who moved to a large Texas city might choose a long weekend stay in Corpus Christi or Fredericksburg.
Lane explained how AirDNA looked at each of these destinations and their feeder markets, identifying new hot spots for vacation rentals. A handful of smaller Texas destinations ranked highest, with areas known to fuel in-migration.
Vacation rental markets to watch, based on five-year population growth in feeder markets
| MArKet | Growth of the feeding population |
|---|---|
| Corpus Christi, Texas | 7.8% |
| Fredericksburg, Texas | 7.4% |
| South Padre Island, Texas | 7.0% |
| Galveston, Texas | 6.9% |
| Broken Bow Lake, Oklahoma | 6.8% |
Source: AirDNA
Ensuring supply meets demand
Short-term rental listings aren’t growing as quickly as they have in the past because of high interest rates, Lane said.
“This is actually a good sign [for current operators], – he continued. “Because we see increasing demand, and at some point those lines will converge. And convergence means increased occupation.â€
But this is not ideal for those trying to enter the market or add new listings. During the summit, Chris Osaka – CEO of modular construction company Tomu – suggested efficient ways to join smaller markets.
“There are a lot of markets where the demand is really growing, and the supply just isn’t there,” Osaka said. In Osaka’s experience, clients are typically “trying to cut back [their] Total development time, from a few years down to maybe a year, and get up and running faster.â€
#markets #drive #vacation #rental #growth
Image Source : skift.com