Understanding STR trends

[Joe Fish]

For the experienced STR investors, what insights can you share about occupancy and rate trends? How is 2023 shaping up relative to the past few years?

I hear a lot about how over supply is driving down prices and occupancy. Has this been your experience? What types of markets and properties may be more or less affected?

For example, is this primarily an issue in urban areas or are you seeing this in regional tourism destinations too? 

Thanks for sharing your insights!

[Sabrina Calnan]

There are multiple factors at play. As always, the particular area and property are a factor.

We're seeing more saturation in areas where there isn't heavy regulation or restrictions on short-term rentals. I see you're in Arvada; it's one of the few areas in Metro Denver that allows non-owner occupied short-term rentals so there are a lot of larger Airbnbs in the area.

Second, short-term rentals have become very popular and even with regulations there's an increase in short-term rentals in the most popular tourist destinations. With that, If a property is near a popular tourist destination (for example near Sedona but not in Sedona) it may no longer show up in the search algorithms because there are enough properties in the desired tourist destination.

The last thing I would add is that the short-term rental market is maturing. In the beginning anyone who slapped up a property on Airbnb was successful. Now, only those who treat it as a true business and manage it appropriately will be successful. There are tons of properties out there doing really well or even better than before. Offering great product is key and the secret sauce is on the back end. This means working the platform algorithms and actively managing a dynamic pricing and revenue strategy.