Short-Term Rentals: A Maturing U.S. Market & Its Impact on Traditional 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 2023 revenue). The company has more than 130,000 employees (including 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.