PHOENIX — The number of short-term rentals in the Valley has gone up 40% year over year.
According to AirDNA, which analyzes short-term rental data, there are now about 7,000 short-term rentals in the Phoenix metro area.
“Compared to 2019, it's been an increase of about 90 percent,” said Jamie Lane, chief economist at AirDNA.
Short-term rental operators in the Valley are noticing the increase in supply.
Andrew LeBaron, founder of short-term rental management company BuyMoreTime.com said the market is "highly saturated" and the market is getting competitive.
“Short-term rentals are getting a lot more difficult to fill up,” LeBaron said, “occupancies are starting to drop a little bit.”
Competition is pushing operators to offer different options to attract travelers too.
“There are a lot of hosts out there on specific platforms like AirBnB.com that allow early cancellations, no penalties, no cleaning fees,” LeBaron said. “People are getting pretty creative in what they’re offering."
Travel is still up and supply is also up across the country, Lane said.
But, what people are paying per day for an AirBnB or Vrbo isn’t going up much across the country, or is going down in some places.
“A lot of that is affordability,” Lane said. “So with how much they had increased so quickly, now, they’re starting to be some pushback in terms of how high those rates have gone and operators are adjusting accordingly,” Lane said.
While the increase in supply offering a variety of budget options in travel destinations is helping travelers, it’s becoming tougher for operators.
“You’re lucky if you’re increasing rates at all this year,” Lane said. “Even with two or three more years of minimal rate increases, the profitability of an average short-term rental will still be higher than it was in 2019.”
In the midst of the market right now, LeBaron is finding some rental operators are ditching the “short-term” in their rental.
“Right now, we’re seeing a lot of people decide, ‘Hey maybe just a long-term furnished rental off of AirBnB.com might be just as profitable, if not more profitable sometimes than having an AirBnB,” LeBaron said.
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