Air DnA Reliability for Analyzing STR markets

[Victoria Knutson]

Hi BP community, Does anyone have any insight on AirDnA and how accurate it's estimates on revenue, nightly rates and occupancy rates are? I have read that it wasn't very accurate several years ago, but now that there is more data available, I'm wondering if it has improved? Basically, can I use their estimates for a ballpark idea when analyzing STR markets?

[Michael Baum]

Hey @Victoria Knutson, I don't think AirDNA is wrong to use or anything like that. I agree with @John Underwood and @Bruce Woodruff.

Like any algorithm, the more data points, the more accurate the data will be. If you are looking at an area with a ton of rentals and competition, it will be more accurate. The fewer, the less accurate in general.

For example, in our area when I ran the numbers against our home, it was waaaay off. Our house is nice, lake front on Lake Coeur d'Alene in north Idaho. There are a number of rentals on the lake but nothing like Pigeon Forge or the Florida coast. It over estimated our nightly rate by about $700...per night... The occupancy was also over at 75%.

Now we are down lake from Coeur d'Alene by about 36 miles. So a ways out of town. We are over 90 minutes to the nearest skiing. So winter is pretty much dead. We get Christmas to New Years Day and Thanksgiving usually. Sometimes Valentines Day. Other than that not much after October. It starts back up in May. Our occupancy for a year is around 45% give or take. Depending on the fall bike riders.

The nightly rate they chose was about $1200 a night which was way out of the norm for a house like ours. Due to the fact there are fewer rentals, we got lumped in with some $7500 a night log mansions. We would never get a booking at that rate.

So, after cruising VRBO and AirBNB, it was much easier to see what we were going to be able to do. We are booking out for 2023 now. I think we have our place priced right and I just increased the nightly for 2022 with zero reduction in bookings. Maybe we are a bit under, but the numbers I see from other places doesn't say it is. We do have 5 stars and 4.9 stars respectively.

So, TLDR: Just look at all the places in that are similar to yours and you will get the best idea. Nothing is perfect. AirDNA can be useful, just don't rely on it 100% for decision making.