As we move into 2024, let’s take a peek at national trends that might shape the short term rental market.
Things like interest rates, inflation, and travel trends.
Macroeconomic Factors Influencing the STR Market
Inman.com provides an interesting take on 2023’s occupancy rates.
“In 2023, the short-term rental space was defined by its ups and downs, with the supply of available nights increasing 12.6 percent year over year, compared to a more subdued 6.5 percent annual growth in demand, according to AirDNA’s 2023 U.S. Market Review.
Last year also marked the end of the incredibly high occupancy rates hosts and investors have enjoyed since 2021. Occupancy dipped 5.8 percent year over year to 49.9 percent — below pre-pandemic levels — as supply increased considerably. The increase in supply also brought average daily rates down 2.4 percent to $311.09.”
We can’t overlook that the Federal Reserve’s rate adjustments impacted both property prices and how much people spent on vacations, which had an impact on occupancy rates.
While travel trends might have more folks opting for staycations, or exploring new areas.
The Smoky Mountains Market: A Case Study in Resilience
The Smoky Mountains have always been a gem for vacation rentals, and 2023 was no exception.
Despite the economic ups and downs, this region proved resilient. Its natural beauty and diversity of attractions kept it high on the list for travelers!
This stability is key for investors. It means that, even in uncertain times, the Smoky Mountains remain a solid bet.
The Great Smoky Mountains National Park has seen over 10 Million visitors each year since 2015. There has been a 37% increase in visitation over the last decade.
Smoky Mountains STR Market: Opportunities in 2024
As 2024 unfolds, the vacation rental market is gearing up for what looks like an eventful year.
“Based on early data, 2024 is already looking to be a promising year for vacation rentals. Demand in January is 8 percent higher than it was at the same point in 2022, and demand for the succeeding months is already between 13 and 21 percent higher for every month through June, reflecting the improved economic outlook for 2024 versus the start of 2023 when fears of a recession hung over many consumers.”
The general economic outlook for 2024 seems more stable and positive compared to the start of 2023. This shift plays a crucial role in shaping consumer confidence and travel spending. With more people likely to plan vacations and trips, popular destinations like the Smoky Mountains stand to benefit significantly.
The Smoky Mountains region stands out as a promising area for investment in 2024. With its proven track record of resilience and its ongoing appeal to tourists, the area is equipped to capitalize on the positive trends forecasted for 2024.