February has brought much to celebrate, including a surge in ADR during the Super Bowl, favorable 2023 financial results for major OTAs, and a positive industry outlook for 2024. And did we mention that spring is just around the corner?
Let’s take a look at these updates as well as the latest in short-term rental regulations.
Who won the Super Bowl? Short-term rentals in Las Vegas
Yes, we know: The Kansas City Chiefs (or, for those of you who don’t follow football, Taylor Swift’s boyfriend’s team) won the Super Bowl. But surging nightly rates certainly made short-term rentals in Las Vegas winners, too.
According to data from AirDNA, by January 27, average daily rates (ADR) for Super Bowl weekend (February 9-11) had surged by 51% compared to the same dates from 2023. Nights booked by January 27 had an average ADR of $353, compared to $234 the previous year.
What’s more, demand for Las Vegas short-term rentals increased by 87% for Super Bowl weekend year over year (YoY).
All of these surges led to a whopping 180% increase in revenue for Las Vegas vacation rentals, underlying the continued importance that events are having on STR demand and profits. This should serve as yet another reminder for hosts and managers to be aware of upcoming events and set their rates accordingly—or to use a dynamic pricing tool that does this for them.
“Another incredible year for Airbnb”
Airbnb released both its Q4 and full-year 2023 financial results on February 13. Airbnb Co-Founder and CEO Brian Chesky called it “another incredible year for Airbnb” thanks to the company’s growth in its host community, core service upgrades, and active listings.Let’s take a look at some of the highlights:
- Net income for 2023 grew to $4.8 billion, representing 152% YoY growth.
- Q4 revenue was $2.2 billion, representing a 17% YoY increase. However, the company’s Italy tax dispute led to a Q4 net loss of $349 million.
- Global Airbnb hosts exceeded 5 million in 2023.
- Active listings grew 18% YoY in 2023, surpassing 7.7 million.
- There were 430 new features and upgrades designed to make Airbnb’s core service more affordable and reliable.
Additionally, Airbnb shared that guest demand remains strong—nights and experiences booked grew 12% in Q4 YoY—and expects a 12-14% YoY growth in revenue for the first quarter of 2024. Of course, this is all great news for Airbnb hosts, for whom strong demand means a full reservation calendar.
New records, restructuring, and layoffs for Expedia
Airbnb wasn’t the only OTA to release its Q4 and 2023 earnings in February. Expedia reported its highest-ever Q4 and full-year revenue, with both up 10% compared to 2022.
But it’s not all good news for Expedia Group: On Monday the company announced it would be laying off 1,500 employees. Combined with the 17,100 employees Expedia Group let go at the end of 2023, these layoffs make up 8.7% of its workforce. This is a result of changing priorities now that Expedia Group has finished moving Hotels.com and Vrbo onto the Expedia.com tech platform.
In lighter news, on February 8, Expedia announced that Ariane Gorin, current president of Expedia for Business, will replace Peter Kern as CEO in mid-May. Less than two weeks later, the company shared its plan to create two new divisions to replace Expedia for Business: Private Label Solutions and Travel Partners and Media.
Alfonso Paredes, previously the global senior vice president and general manager of Expedia Partner Solutions, is becoming the president of Private Label Solutions. And Greg Schulze, recently the senior vice president of Strategic Travel Partners, is now the president of Travel Partners and Media.
Expedia commented that these appointments represent a strategic move to take advantage of global opportunities, as Paredes and Schulze have collectively worked in North America, Latin America, Europe, and Asia.
Revealing the hottest STR markets in 2024
Anyone looking to purchase a vacation rental this year will be happy to hear that AirDNA has released its 2024 Best Places to Invest Report. The top five places?
- Columbus, Georgia
- Ellsworth, Maine
- Logan, Ohio
- Spring Hill, Florida
- Sneads Ferry, North Carolina
Of note is that Florida cities make up seven of the 25 best cities to invest in, making the state an investor’s paradise. Ohio and South Carolina also have two cities each on the list.
The report also shared an optimistic outlook on STR investments in general, with growth in revenue per available room (RevPAR). And despite increased home prices, AirDNA expects lessening declines in overall STR market performance.
So, if you’ve been looking for a final sign to make that offer, this might just be it!
Your monthly rules and regulations roundup
Short-term rental planning reforms in England
The U.K. Government has announced reforms to empower local councils in England to regulate short-term rentals, aiming to address housing affordability issues and prevent the displacement of residents.
These reforms include a new “use class” and planning application for short-term rentals that aren’t used for residential purposes. They’re also introducing permitted development rights that enable a property to be changed from a short-term rental to a standard residential dwelling, and vice versa.
These initiatives, along with a national register, are designed to give local authorities the information and authority they need to ensure housing availability and protect local communities. While the government recognizes the importance of short-term rentals to the U.K.’s tourism industry, they also want to give communities back the power to decide how many vacation rentals makes sense.
A new registration system in Australia
Meanwhile, in Australia, the Western Australia Legislative Assembly has introduced the WA Short-Term Rental Accommodation Bill 2024, signaling a significant change for the region’s short-term accommodation industry.
Just like England’s new reforms, the bill aims to balance the popularity of short-term rentals with the need for long-term housing availability. Property owners must register their short-term rentals before advertising and accepting bookings, with a register managed by Consumer Protection launching in mid-2024.
Additionally, there’s a $10,000 grant incentive for owners switching from short-term to long-term rentals, emphasizing a broader strategy to minimize short-term rental impact on long-term housing availability.
The legislation also distinguishes between hosted and unhosted properties, introducing changes to planning requirements, particularly for unhosted properties rented out for more than 90 nights annually. Compliance is required by January 1, 2026 to remain on the register.
Lodgify launches Dynamic Pricing
We have some major news closer to home, too: Earlier this week, Lodgify released its new Dynamic Pricing tool!
Lodgify Dynamic Pricing is our all-in-one solution for data-driven pricing that adjusts rates automatically to keep you competitive and booked all year. It uses a sophisticated algorithm that considers 40+ listing attributes to create a comparable set of listings for accurate pricing.
It also considers your historical booking data to learn from your rental’s past performance and make informed predictions about future rates. However, it’s anchored by your base price to ensure our recommendations don’t deviate too far from your expectations.
And the best part: using Lodgify Dynamic Pricing to fine-tune your pricing strategy can help bring you an average increase of 20% more revenue.
Check out our blog for more details about this launch and then learn more about the new features here. Your optimal pricing strategy is just a click away!
See you next time!
Whether you plan on spending March taking advantage of local events, high demand, and hot rental markets or adapting to new STR regulations, the upcoming month has lots in store. March brings the start of spring, Spring Break for many schools, and Easter, so make sure your rental is prepared for the changing seasons and a potential boost in bookings.
As always, we’ll be back with more news and updates soon!
