Source: CBRE Hotels

Once dismissed as a relatively inconsequential niche product and a distant cousin to traditional hotels, Short-Term Rentals (STRs) have become a widely accepted, mainstream form of nightly accommodation. Our latest report analyzes the growth of this maturing sector and its impact on the performance of existing and new hotels.

  • STR growth continues, but at a slower pace
    The supply penetration rate of STR units to traditional hotel units reached 10.4% in 2019 and is expected to hit 12.2% this year. STR supply grew by 26% in 2019, down from 39% in 2018.
  • Recent STR growth has been primarily in suburban/rural areas
    Units in urban areas make up only 21% of total supply, down from more than 45% in 2014.
  • Los Angeles, New York and Orlando remain STR hot spots
    L.A. remained the largest supply market in 2019, with L.A., New York and Orlando accounting for about 12% of total supply in the U.S. last year.
  • Price and location are the primary motivators for guests
    On average, STRs offered a discount of about 5% across the 30 markets studied, while in the more urban U.S. cities the discount was as high as 20% to 30%.
  • STRs impact hotel valuations and underwriting assumptions
    Given the undeniable change in the lodging industry, a reasonable understanding of the STR market is required for properly valuing hotels.

Explore the full report for in-depth market analysis, CBRE's predictions for the sector and how the hotel industry will continue to adapt.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world's largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

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