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Recent short term rental market data indicates that the European short term rental boom could be coming to an end. Last year we witnessed market demand surpass pre-pandemic levels, with a 7% growth rate over 2019 figures, as well as year-over-year improvement on 2021’s performance. But recent industry data from Q1 of 2023 showed an occupancy decline of 11% in the region. If this downward trend is true, what does this mean for the continent’s vacation rental market?
To find out more, we’re diving into pacing data for the rest of 2023 to uncover how the short term rental market in Europe is truly performing.
Europe’s 2023 Short Term Rental Performance So Far
By analyzing scraped data as of June 1 for stays between January and June, here’s what we know about the short term rental market in Europe so far this year.
- Average daily rates (ADR) are experiencing a year-over-year growth rate of 11%. This increase has been witnessed across Europe and in the U.K. Current ADRs in these regions are €141.84 and £155.27 respectively.
- Occupancy levels have dipped by 3% across Europe for stays between January and June in 2023 versus 2022. The U.K. hasn’t fared much better with occupancy flat year over year. For comparison, the U.S. also recorded lower rates in recent months, with March occupancy being 5% lower than 2022 levels.
- Despite a lack of improvement in occupancy, ADR increases have contributed to a higher year-over-year revenue per available rental (RevPAR). The market data shows an 8% rise across Europe, and 10% increase in the U.K.
There could be many factors contributing to lowered occupancy rates in Europe, including January through June being the off season for many destinations (ie. those that are not ski locations) and tightening travel budgets due to inflation increasing the cost of living. Or, maybe, we are simply witnessing the leveling out of the vacation rental industry after a big boom in demand post-pandemic. To be sure, we’ve also pulled forward-looking (on the books) data for the rest of 2023.
Pacing for The Rest of the Year
Using scraped data as of June 1, 2023, short term rental stays already on the books for the year show…
- Europe’s short term rental ADR is 12% higher than last year for 2023.
- As the year goes on, Europe’s occupancy rates are actually due to surpass 2022 levels, by 5%. The U.K. shows a 6% rise.
- Thanks to these key performance indicators (KPIs) increasing, RevPAR shows a 17%-18% jump across the continent.
Is the Short Term Rental Boom Over in Europe?
While the first six months of year indicated declining short term rental occupancy rates across most of Europe, bookings already made for the rest of 2023 show the sector should, in fact, surpass 2022 levels. This strongly suggests that the European short term rental market is continuing to thrive and that guest demand for alternative accommodation across the region remains high.
So, in response to the question, is the short term rental boom over in Europe, the answer is no. The market data supports industry consensus that the sector will witness further growth in 2023, which is great news for property managers and hosts in the space. It’s also a good indicator for investors looking to grow their portfolios.
Key Takeaways
- The first six months of the year have been slow for European short term rentals.
- But, the European short term rental boom is not over.
- 2023’s occupancy rates are set to surpass last year’s levels.
Europe’s pacing data, based on booked short term rental stays for the remainder of 2023, is very positive for property managers, hosts, and even investors in the region. Despite a slow start to the year, the sector is set to continue its upward trajectory as the popularity of vacation rentals grows across the globe.
Want to know how the short term rental sector is performing in the United States? Check out our most recent overview. Or, if you’re looking for comprehensive data for a specific destination, get in touch with our team to receive a demo of our Key Data dashboard.
