AirDNA’s Monthly Review reports that for the first time since April 2021 demand for U.S. short-term rentals came in below 2019 levels, at -0.9% in August.

The outlook for fall and winter remains optimistic with short-term rental demand up 18% compared to the same time in 2019 and 88% higher than in 2020. In general, people are booking well ahead for their holiday travel this year.

The week of Thanksgiving is booking 38% higher than in 2019 and 85% higher than 2020.

“The surge in fall bookings shows that people don’t want to risk losing the most desirable properties for their family get-togethers. After a high booking summer, supply in top destinations is still not enough to satiate existing demand, even at higher rates,” said Scott Shatford, AirDNA CEO.

Average daily rates remain elevated, averaging $279 in August, up 18.5% relative to 2019. The rate of growth has slowed in recent months though, after peaking at 23% in May 2021. Rates began rising in the summer of 2020 as lockdowns initially ended and recovery began and travelers were choosing larger and more luxurious properties which further pushed the average rate higher.

When Will Travelers Return to the City?

A return to in-person work and school for many may be impacting the high demand in rural and leisure-oriented destinations where guests previously looked to escape the city. In markets like Big Bear and Coachella Valley, CA, the heightened demand growth noticeably slowed in August. Big Bear had a demand growth of 80% back in May 2021 but only registered an increase of a “modest” 32% in August.

Still, it doesn’t look like most of the large cities will attract pre-COVID demand levels until international travel returns. These markets include New York (-54.0%), Boston (-53.9%), and Los Angeles (-51.7%) which are traditionally highly dependent on international demand with more than 30% of their nights booked by foreign visitors.

“The U.S. typically gets more inbound international travelers than Americans are traveling overseas, with most of those visits in the major gateway cities,” said Jamie Lane, VP of Research at AirDNA. “With rising vaccination rates and the U.S. lifting restrictions on fully-vaccinated international travelers in November, this winter should mark a turning point in the recovery of urban travel demand.”

Source: AirDNA