US travellers escaping the city this summer will need to pay significantly more on accommodation than before the pandemic, as the price of short-term rentals jumps in line with rising vaccination rates and a loosening of Covid-19 restrictions.
Although international holidays are still officially discouraged, with the US state department recently expanding its do not travel list to include roughly 80 per cent of the world’s countries, signs are already appearing of sharp price increases for domestic short-term rentals.
Sites that offer detached single-family homes, such as Airbnb and Vrbo, have “become the preferred accommodation choice for those looking to social distance”, said Steven Jankowski, head of growth at All The Rooms, which analyses Airbnb data.
This has led to “short-term rentals significantly outperforming hotels over the last 12 months”, Jankowski added.
In many places, prices are exceeding 2019 levels, with the average daily rate for short-term rentals in the US up 26 per cent for this summer compared with two years ago, according to data from AirDNA, a short-term rental analytics company.
Jankowski said: “There’s a preference for more expensive, larger rural listings, and less demand for urban listings, which on average tend to be cheaper.”
Jan Louise Jones, professor of hospitality and tourism at the University of New Haven, said locations known for outdoor activities such as coastal areas, lakes, national parks and hiking destinations had registered the biggest increases in demand and prices.
“We are already seeing an increased demand for areas like the national parks,” she said.
The number of nights already booked in rural areas for this summer is nearly 50 per cent higher than were booked at the same point in 2019, while reservations in urban centers are down 65 per cent, the AirDNA data show.
Ted Rossman, an analyst at CreditCards.com, said the increased demand for outdoors locations was reflective of the fact that many cities still have significant pandemic restrictions in place, including “strict capacity limits at amusement parks, sporting events, concerts and other large gatherings”.
Analysts say that the increase in the price of short-term accommodation rentals is the first sign of a jump in travel inflation with Americans, who have been reluctant to go on holiday, preparing to take their first vacation in over a year.
“Bookings will continue to increase as more people get vaccinated and get comfortable travelling,” said Rossman. “Many trips might be planned on shorter notice than usual. There’s so much pent-up demand that, once people feel ready, they might just go.”
The increase in demand comes at a time of constrained supply, because second homeowners who previously rented out their properties to holidaymakers are now occupying them after fleeing urban areas at the start of the pandemic.
“Many homeowners have decided not to rent and instead use their homes,” said Dana Trotter, with Sotheby’s International Realty in Bridgehampton, which has a short-term letting business. “Pricing is much less negotiable and many homes even had rental bidding wars this year.”
However, Rossman said a sharp decline in business travel would continue to weigh on other sectors of the travel industry, such as hotels and airlines. “There’s a lot of pent-up demand among leisure travellers, but a much lower appetite for business road warriors.”