Top performing European short term rental markets through COVID-19

Which are the top performing European short term rental markets attracting higher demand through COVID-19 and what’s the outlook for 2021?

We’re all well acquainted with the detrimental impact to the vacation rental industry as a result of the COVID-19 pandemic. At the beginning of April last year, European reservations were down 92% on 2019. Some areas however, have climbed out of this abyss, and through 2020 have secured more reservations than 2019. So which European short term rental markets are booming and how do they look through Q1?

Impact to short term rental reservations across Europe

Looking at the continent as a whole, we can paint a picture of the current levels of recovery across Europe. See the map below. While countries and regions are at the mercy of local restrictions and regulations, not to mention the severity of case numbers, they also attract different types of demand.

As demand shifts towards non-urban destinations and becomes almost entirely domestic, it favours more appropriate regions. Those with an existing, strong domestic contingent or better furnished with popular non-urban opportunities reap more benefits than their international or urban inclined neighbours.

Some of the best performing regions of Europe currently, are northern Romania, parts of Poland, and northwest France. These areas often border capital cities and offer rural escapes to city-dwellers.

Romania is home to 13 national parks, as well as the Carpathian Mountains and many forests. Poland’s top performing areas surround the capital, Warsaw, and also boast a multitude of national and landscape parks. In France, popular areas similarly reach out from Paris, and encapsulate the Champagne region, mountains and Alsace, popular amongst French and nearby Germans alike.

Top performing European short term rental markets

We took the top 500 European markets by number of vacation rentals, to ensure we were looking at significant destinations. Subsequently we reviewed their reservations throughout 2020 compared with those of 2019. As a result, we’re looking at the 25 top performing significant markets in Europe year on year.

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Remembering that the vast majority of European (and indeed, worldwide) markets suffered substantial negative change in reservations year on year, makes these destinations even more impressive.

The first observation is that Poland dominates the top performing European short term rental markets; 5 in the top 10! Secondly, by broad market classification, our top 25 contains a pretty conclusive 23 non-urban markets. These include 14 lake/beach destinations, 9 ski/mountain resorts, and leave just 2 urban markets. It should be noted that even the 2 markets classified as urban; Lübeck in Germany and Ajaccio in Corsica (France), are situated on the coast with beaches.

If you’ve got this far and you’re wondering where the other main European STR supply nations of Italy or the United Kingdom are going to feature, the answer is that they missed the list. Through 2020 the top performing markets in the UK were largely in southwest, coastal Cornwall. Newquay came in top with 18% growth in bookings year on year. Italy meanwhile, as the original European COVID-19 epicentre, lags further behind with Gallipoli in Puglia reaching a still-respectable 12% increase.

Overall, our top performing short term rental markets in Europe emphasise the resounding preference for non-urban destinations in 2020.

Top performing markets close up

Szklarska Poreba, PL

Szklarska Poreba, Poland is our top performing European market year on year. 133% more reservations were seen throughout 2020, relative to 2019, as a result of its non-urban offerings. The town is a national centre for mountain hiking, cycling and skiing.

Mamaia-Sat, Romania is a beach resort town on the Black Sea, around 2 hours east of the capital, Bucharest. Reservations are 57% higher year on year, and it is the beach destination with the most positive outlook over the coming weeks.

Mamaia-Sat, RO
Ajaccio, FR

Ajaccio, Corsica, France. While it may be classified as urban, Ajaccio is a port city on the Mediterranean with many beaches and coves. This no doubt helped it to the position of top performing urban market, and French market, in 2020 overall. Ajaccio is also the urban location with the best immediate future.

Kappeln, Germany is a town on the river Schlei, near the Danish border, famed for its riverfront and lighthouse. Of our top performing markets, it is the German destination with the best performance in early 2021.

Teulada, Spain was the highest performing Spanish destination last year. Situated on the Costa Blanca, it is known for its markets and hiking trails.

The UK‘s top market of 2020 was Newquay. With an 18% increase in year on year reservations, the famed Cornish surf town just beat many neighbouring coastal destinations to top spot.

Newquay, UK

Whilst it didn’t make the top 25, Gallipoli, Italy was the town in Europe’s top supply nation that performed best throughout 2020. Situated on a small island only accessible only by a 16th century bridge, it managed a 12% increase in reservations despite Italy’s severe outbreak and lockdowns. And the picture looks even brighter through the first weeks of 2021, as you will see.

2021 occupancy outlook for top performing European markets

In order to understand the outlook for European short term rentals, we have selected the above 7 markets, plus Paris as an urban reference point. In the below chart we look at year on year change in occupancy over the next 3 months.

Over the first 3 months of 2021 we can see that occupancy on the books is, for the most part, significantly higher for all of our top performing markets than at this time last year. Paris dives as low as -40% occupancy year on year, and averages -9% in Q1. Contrastingly, the least positive of our chosen top performing markets is Teulada, whose occupancy is still averaging 38% higher. In fact, 4 of these markets currently have more than double the booked occupancy of this time last year.

Additionally, we can see that beach/lake markets in yellow are looking most positive on average, with 129% average increase in occupancy. Meanwhile, the mountain resort of Szklarska Poreba in blue is fluctuating around a 107% increase, and our lone urban market in pink reaches 77%.

Why are some European short term rental markets booming?

While the pandemic has thrown shackles around life as we know it, the travel demand paradigm has shifted. What people are allowed to do, and what they want to do, has fundamentally changed, more domestic guests to less urban vacation rentals for longer stays.

As a result, markets best feeding those types of demand have seen their booked trips soar. Our 25 top performing European short term rental markets all cater to guests seeking the great outdoors; whether it’s beaches, lakes or mountains.

In addition, the Q1 outlook for 2021 looks incredibly strong compared with this time last year. All the indications are that this trend will surely persist for the full duration of travel risk and restrictions – if and when it shifts back remains to be seen.

Visibility over demand data and pricing in different segments has never been more critical to staying ahead of your competition and boosting revenue. Search your area with our free dashboard or book a market consultation with our Smart Rental PRO experts.

You can also read about the top performing US vacation rental markets here: