As the lines between accommodation sectors continue to blur, we take a look at vacation rental growth in the top 25 hotel markets in the US. First we rank those markets by STR supply, then we look at inventory growth before analysing rate evolution across the sectors.
Vacation rental supply in the top 25 hotel markets in the US
In our first analysis, it’s important to remember that we’re not looking at the largest short-term rental markets but the most significant 25 hotel markets in the US, ranked by the size of vacation rental supply.
Vacation rental growth in the top 25 hotel markets in the US
Whilst the table above shows the sheer numbers of vacation rentals in the most significant hotel markets in the states, the real meat of the story is in the growth those markets have seen.
The below map shows these same 25 major markets in terms of the change in short-term rental inventory over the past 3 years. Hover over the spots to see % growth at each location.
Tampa FL has seen the highest growth in short-term rental supply at 226% over 2019. Meanwhile, Houston TX, Detroit MI, Saint Louis MO and Phoenix AZ have all experienced in excess of 100% growth - that's a doubling of inventory.
Overall, 15 of the 25 most significant hotel markets have seen positive STR growth - 11 over 25%. In contrast, 10 have lost supply, including 3 losing more than 25%. These markets are Boston, New York and Los Angeles, all of which are subject to fairly stringent regulation.
Rate growth in hotels and short-term rentals
So what does this mean from a competitive standpoint? Demand and provision blurring between the sectors makes understanding pricing across accommodations in your market important. Below you can see the differences between 1 bedroom short-term rental rates and hotel rates in the top 10 growing markets from above.
For example, In Saint Louis, hotels are currently $91 more expensive per night than a vacation rental. Hotels are also more expensive in 6 other markets of the 10. However, Houston, Detroit and Phoenix are now seeing rental rates in excess of hotels. In fact, while in 2019 hotel rates were on average 45% higher than short-term rental rates across the top 25 hotel markets, in 2022, they are only 27% higher on average. This indicates the growing demand and establishment of vacation rentals across the most major and varied accommodations hubs - hotel strongholds.
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