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Contrary to ‘booking slowdown’ fears expressed by Airbnb recently, latest data shows the short-term rental industry has actually strengthened in the second quarter of 2023, Key Data reveals1.
Airbnb’s share price crashed 12% last week despite beating Q1 expectations when it revealed to investors it expected a slowdown in bookings for Q2, partly due to pent-up post-COVID demand affecting the year-on-year comparison.
In its Q1 Shareholders Letter published this month, Airbnb stated, “Nights and Experiences Booked will have unfavorable year-over-year comparisons in Q2 2023 as we overlap pent-up 2022 demand following the COVID Omicron variant. We expect year-over-year growth in Nights and Experiences Booked in Q2 2023 to be lower than our revenue growth during the quarter. Although ADR continues to demonstrate greater than expected resilience, particularly in EMEA and North America, we anticipate a slightly lower ADR in Q2 2023 than Q2 2022.”
However, those fears appear to have proved unfounded. The number of nights booked for global Q2 stays is up 15.9% annually, with 22.6 million more nights sold than at the same point last year2, Key Data can reveal.
While average daily rate (ADR) has only crept up 1.4% over the same period — indicating a heavy fall when adjusted for inflation — occupancy has more than made up for it, resulting in a 17.4% increase (from $36.48 to $42.82) in revenue per available room (RevPAR). Occupancy has risen worldwide by 15.7%.
In the US, ADR is down 1.9% but total nights booked for Q2 have risen 10.2% annually while occupancy has increased by 1.6%. The combined effect of these two measures means RevPAR is flat year-on-year at $76.91.
Across the pond in Europe and the UK, RevPAR has increased dramatically.
In Europe, nights booked for Q2 are up 15.4% and ADR has increased by 13.2% year-on-year, jumping from €125.17 to €141.64. Occupancy is up 10.2%, while RevPAR has increased by 24.7%.
In the UK, hosts are enjoying a 15.2% increase in ADR, from £139.06 to £160.20, and a 14.4% increase in nights booked compared to last year. Occupancy has jumped up 9.4% and RevPAR has increased by 26%, now settling at £52.83.
Melanie Brown, Executive Director of Data Insights at Key Data, commented: “Despite Airbnb’s warning of a tougher second quarter, the market has been much more resilient than expected.
“At the halfway point for the second quarter of the year, the appetite for short-term rentals remains strong, with bookings for Q2 showing double-digit growth across the board. RevPAR in Europe and the UK are the stand-out successes but even in the US, the only place to record lower nightly rates, revenues are still stable.”