After a record-breaking July, the US short-term rental (STR) market cooled in August, with demand growing 7.6% year-over-year (YOY), compared to 9.3% growth in July. Still, this was the biggest August ever, with 21.2 million nights booked, despite a punishing heat wave across much of the nation, devastating wildfires in Hawaii, and a hurricane passing through Florida.

Key Performance Metrics

• RevPAR declined 4.0% YOY to $235.50
• Available listings reached 1.53 million, up 13.7% YOY
• Total demand (nights) rose 7.6% YOY
• Occupancy was 4.2% lower YOY at 60.4% (-0.6% vs. 2019)
• Average daily rates (ADRs) grew 0.1% YOY to $324.85
• Nights booked increased 8.7% YOY

Occupancy Rates Dip

After several months of occupancy strong enough to approach 2022 levels, occupancy rates unexpectedly dipped below 2019 levels in August. A sudden surge in available listings in August significantly contributed to that dip. The difference between the actual available listings and the pre-COVID trend narrowed to 130,000 listings — its thinnest margin since March 2020.

Demand Growth Slows

Demand growth, which had been fluctuating within the 10-15% range since the end of 2022, also dipped to 7.6% in August, simultaneously with the jump in supply growth. The lingering impact of the summer’s blistering heat wave may be responsible for the decline in demand growth, as booking growth sharply declined in July. The July decline may have been a delayed effect, as people with previously planned trips may not have reacted quickly to news of high temperatures. July and August 2022 also saw sharp accelerations in booking growth, meaning that July and August 2023 faced difficult comparisons.

Natural Disasters Impact Demand

Natural disasters that heavily affected tourist markets in both Florida and Hawaii also likely influenced demand. After removing these two states from the US totals, demand growth actually increased to 9.0% YOY — much closer to the growth rates we’ve seen so far in 2023.

Demand and Supply Changes

The demand decline was widespread, although mountain/lake resort locations saw a particularly large decline, tying with urban locations for the slowest growth at 5.3% YOY. On the other hand, available listing growth actually declined in small city/rural locations but significantly increased in the resort and suburban markets.

Regional Trends

Several markets experienced a more acute drag on demand than others. Travelers avoided central Florida markets, including Orlando and Lakeland/Winter Haven, as the heat and potential landfall of Hurricane Idalia made travel risky. Cape Coral/Fort Myers, still recovering from the destruction of Hurricane Ian in 2022, saw the steepest decline. Still, Gulf markets Panama City, Destin/Fort Walton Beach, and Santa Rosa/Rosemary Beach also reported weak demand, either from the withering heat or the widespread fear of storms.

Interestingly, Sarasota, St. Petersburg, and Fort Lauderdale saw large increases in demand, perhaps as a destination for people displaced by the storm. Jersey City/Newark saw a sizable increase in demand YOY, perhaps due to some travelers looking for alternatives to New York City, where renewed regulations have ruled out most STRs for stays less than 30 days long. Minneapolis also had a large demand increase and has even recovered to 2019 demand levels in the past few months. Phoenix/Scottsdale and Coachella Valley also continued their pattern of strong off-season performance.

ADR Growth Stays Positive

Although slowing occupancy is usually associated with weak ADRs, rates actually grew by 0.2%, an improvement from July’s ADR decline of roughly 1%. These ADR gains were shared among most locations. In July, four of the six location types experienced lower ADRs than last year, but in August, only mountain resort locations saw decreasing ADRs, and even there, rate change improved. Small city/rural locations and mid-size cities had the quickest ADR growth.

Future Bookings Remain Strong

A look at future bookings still suggests that, despite the slowing demand and drop in booking in August, interest in the off-season remains strong. September is pacing 8.4% higher YOY, and the pace increases to 10.1% and 11.8% in October and November, respectively.

Overall, the US STR market remains healthy, despite the demand decline that was widespread. Although mountain/lake resort locations saw a particularly large decline, tying with urban locations for the slowest growth at 5.3% YOY. On the other hand, available listing growth actually declined in small city/rural locations but significantly increased in the resort and suburban markets.