According to Grand View Research, the short-term rental market held an estimated value of US$109.76 billion in 2022. The market’s expected compound annual growth rate has been projected at 11.2 per cent from 2023 to 2030. Key drivers for demand and supply include healthy post-Covid travel recovery and trends such as staycations.

While short-term renting has existed for decades, it is still relatively new to Kiwis. Property owners would not be alone in assuming Airbnb was the only notable platform, but this could not be further from the truth. Airbnb does hold one of the largest market shares worldwide, but there are plenty of other online travel agents that should be considered when creating listings.

Booking Holdings is particularly popular across European countries, with Hospitality Europe reporting a market share of 71.2 per cent in 2021. In 2022, Holdings recorded US$121.3 billion in gross travel bookings. The company’s brands include booking.com and Agoda, both travel specialists in short-term rentals, with the latter primarily serving the Asia-Pacific region. Roughly 89 per cent of the travel conglomerate’s revenue comes from booking.com.

Us And The World

In the US, Apptopia’s most recent market data on travel apps lists Booking.com with a market share of 21.56 per cent and Airbnb with 17.13 per cent. Worldwide, Booking.com takes in just under 35 per cent with Airbnb sitting at 22.90 per cent. Expedia surpassed Airbnb in the US with a share of 19.88 per cent, but came in third worldwide.

Expedia falls under the Expedia Group’s network of brands, also home to Vrbo. According to Peter Kern, Vice-Chairman and CEO of the Expedia Group, their third-quarter results in the market for 2023 hit record figures for revenue and profitability, reflecting “the resilience of travel demand” in a post-Covid world.

Despite market share breakdowns, 2023 data from Lighthouse suggests that only one-third of vacation rentals are listed across multiple OTAs worldwide. Most inventory is exclusive to Airbnb. For self-managed properties, creating listings across every major booking channel requires time and technologies that owners often do not have.

When you join a professional management company, your property will be pushed to every platform it needs to be on to ensure your global marketing reach is maximised. Of course, some channels are exclusive to property management companies, such as Homes & Villas by Marriott International. This platform caters to the luxury travel market, with a global reach of over 157 million Marriott Bonvoy® members.

Premium Rates

Unlike the likes of Airbnb, Homes & Villas will only partner with property management companies that uphold their quality service standards. At The Stay Hub, luxury properties can command premium rates hitting up to $5,000 per night, especially in peak short-term rental season.

As we kickstart 2024, the past year has seen a huge uptake in travel and tourism expenditure. Alongside staycations, the sudden surge of people using short-term rentals for work and leisure has played a key role in demand. Airbnb CEO Brian Chesky has said, “We wouldn’t have recovered so quickly from the pandemic had it not been for millions of people working from Airbnbs.”

According to the platform’s latest quarterly results, the company’s business in Asia-Pacific has “fully recovered to pre-pandemic levels”. Compared to Q3 2019, gross nights in the region grew 23 per cent in Q3 2023.

Across the New Zealand market, Auckland has held a healthy rental demand score of 95/100 on AirDNA for the last quarter of 2023, while revenue growth has sat between 92 and 95*. According to the leading data platform, other top-performing markets across the country include Wellington, Queenstown and Dunedin.

Demand Curve

With pandemic restrictions now a thing of the past, it has become clear that demand for short-term rentals is not slowing. This could perhaps, in part, be attributed to the more intimate nature of short-term renting, which avoids the often-crowded hotel environment. Expedia’s 2023 Travellers Index has reported 35 per cent of travellers still prioritise minimising Covid-19 exposure, while 51 per cent state safety and cleanliness is a top priority for travel.

The Stay Hub had a phenomenal year, with bookings up 80 per cent as we end 2023. If you are interested in finding out what you could earn in the industry, reach out for a free appraisal.

*AirDNA data current as of December, 2023