Last updated on November 17th, 2022
LISTING OF CONTINENTS AND TOP STR MARKETS
Are you thinking of purchasing or subleasing a property for the purpose of Airbnb & short-term rental? Then you might have heard Airbnb hosts and investors discuss certain key metrics on forums like BiggerPockets or Facebook Groups. In order for your property to succeed, it’s important to learn about Airbnb key metrics such as occupancy rates and average daily rates. And when we say succeed, we mean profitable!
These Airbnb key metrics will help define and reassure you that your hard-earned money will turn into an even greater profit for each property that you’ll invest in. Airbnb occupancy rates by city vary depending on specific neighborhoods and suburbs, which should also be considered when starting an Airbnb business.
In this article, we gathered the essentials that all property investors and Airbnb hosts should know about finding Airbnb occupancy rates, how to analyze a target property for short-term rental, along with the top 3 markets of Airbnb occupancy rates per continent – WORLDWIDE! Continue reading to learn more and be a pro in the short-term rental industry.
Defining Airbnb Occupancy Rate
Defining a particular area’s Airbnb occupancy rate is certainly an effective way to gauge whether a property investment will be profitable or not. In the first place, it’s worth knowing that pouring hard-earned money into property investment will result in profitability and success.
For instance, based on an accurate Airbnb calculator, property investors can easily tell that investing in an Airbnb in Brighton will exceed their expectations on occupancy rates. By looking at various competitors’ performance within your preferred area, you can have an overview of revenue potential based on certain property types & amenities.
Source: Airbtics Dashboard
Essential Airbnb Key Metrics
Aside from tracking your competitors’ performance, Airbnb key metrics or vacation rental metrics are primarily important to help hosts and investors to set expectations towards the business, overcome challenges during off-seasons, and help calculate overall finances.
To cut the story short, Airbnb key metrics help one’s success in the business. This is why it’s important to rely on accurate data when it comes to identifying a property’s Airbnb key performance to make sure that expectations are met. Here are some of the Airbnb key metrics that one should take note of:
1. Occupancy Rate
Airbnb occupancy rates refer to the number of days that a property is booked by guests in a particular time period within a calendar year. To properly understand the market’s demand, it can be calculated by dividing the number of booked nights by the number of available nights.
2. Seasonality
The seasonality of an Airbnb property refers to a cyclical variance in the traveler’s demand throughout the year. While there are peak and off-seasons in the short-term rental business, it’s essential to be extra creative and strategize. If there is a huge gap between the high & low seasons, it can be outdone by renting out the property to digital nomads, students, and other guests during off-seasons.
3. Average Daily Rate
The Average daily rate (ADR) represents the daily revenue that a property can make. While other hosts track their ADRs annually, you can also track them quarterly depending on your preference.
This can be calculated by dividing the total bookings revenue by the total number of nights booked. However, the results can be more accurate by considering the expenses including taxes & cleaning fees.
In addition to this, another important Airbnb key metric to gauge your business’ performance is the RevPAR (Revenue per available room). Based on your property’s average daily rate and occupancy rate, this key metric will help you determine each unit’s revenue generated. It can be calculated by multiplying your property’s average daily rate & occupancy rate.
4. Cash-on-cash Return
Cash-on-cash return measures the annual return made by an investor on a particular property. It can be calculated by dividing the received net cash flow by the amount of money invested.
For investors who are handling more than 1 property, they can also compute and compare the most cost-effective properties through a key metric called Revenue per Property. Revenue per property can be computed by dividing the gross rental revenue by the total number of available properties in a certain period of time.
5. Net Operating Income
Setting aside a property’s operating expenses, the revenue that it generates is called a Net Operating Income (NOI).
This will help hosts & investors determine whether it’s necessary to make improvements in terms of lowering operating costs to gain more profit. It can be calculated by deducting your gross income from the overall operating expenses.
6. Average Length of Stay (ALOS)
This Airbnb key metric refers to the average number of days that an individual guest has booked a property. ALOS can be calculated by dividing the total number of nights booked by the total number of various guest bookings. Typically, it falls into one of the following categories: single night, short stay (2-5 nights), weekly stay (5-15 nights), and mid-term stay (30-90 nights).
How to Find Airbnb Occupancy Rates?
In order to accurately gather a property’s occupancy rate, the best technique is to use an Airbnb occupancy rate calculator. Generally, getting a particular area’s occupancy rate is never an easy task, which is why Airbtics gives hosts and investors the superpower to access accurate data from across the globe.
Source: Airbtics
By simply indicating your city on the search bar and changing the filters according to your property type & the number of bedrooms and baths, you can find occupancy rates and other very important data crucial to your property’s success. Using Airbtics’ calculator, you can discover the following comprehensive data points:
- Occupancy rates, average daily rates, and annual revenue
- Seasonality
- Average Length of Stay (ALOS)
- Top-performing listings & hosts in a preferred area
- Revenue heatmap
How to Analyze an STR Property?
When performing an analysis on a short-term rental property, it’s important to understand the following terms that investors use:
1. Cash-on-cash Return
How long will it take for your invested money to reciprocate? Cash-on-cash return refers to the calculation of cash income earned in an investment property. A high cash return means that in a specific amount of time, you will be able to start a second investment property.
2. Net rental yield
How much money will a property generate every month? By measuring the gap between a property’s overall costs and income, net rental yield can be calculated. A high net rental yield will represent a high volume of cash flow on a monthly basis.
There are also other factors to consider in order to properly create an analysis on a short-term rental property:
Location
Depending on your preferred location to start a short-term rental business, looking closely at a specific area is essential to identify your target market. For instance, if you’d like to invest in a small city or destination location near coastal areas, you are more likely to attract tourists or digital nomads.
Pro tip: Targeting the market in your area with the highest occupancy rate = more profit!
Demand & Supply
Short-term rental demand usually differs according to tourist attractions, festivals, year-round popularity, business centers, shopping districts, and the like.
Taking a close look at an area’s demand and supply can instantly give you an idea if there are sufficient rentals to start a business in your preferred area.
Seasonality
There are short-term rental properties that are situated in high & low seasons – which should be considered when performing an analysis on short-term rentals. For instance, one of the most popular beach areas in the UK is Brighton, which has shown an impressive occupancy rate of 84% in June and 100% in July. Because it is the summertime season, more tourists are expected to book.
Having low seasonality means that you will get bookings consistently year-round.
In certain places, this is more desirable than high seasonality. One of the best examples of a high seasonal market is ski resort towns. Properties in ski resort towns often get good bookings only during the winter, so hosts and investors are likely to have low cash flow in non-season. Some people prefer it, but when it comes to the attractiveness of investment, the low-seasonal market is considered better.
Revenue
The revenue performance of an STR property can be measured using the mentioned Airbnb key metrics such as average daily rates, RevPAR, and gross annual revenue. Some of the factors that affect revenue are:
1. Promoting Airbnb listings & maintaining consistent positive reviews.
2. Offering the best amenities for Airbnb & vacation home rentals.
3. Airbnb pricing strategies and discounts offered during off-seasons.
Airbnb Occupancy Rates Worldwide 2022
Since the importance of Airbnb occupancy rates has been well-defined in this article, let’s continue to highlight and discuss the Airbnb data per continent. In order to figure out the best places to do short-term rental investments, we used Airbtics’ calculator to filter the top 3 markets to invest in for each continent!
AFRICA
According to Quartz Africa, Airbnb’s growth in the African continent has been one of the eight fastest-growing markets globally. Particularly in Nigeria, Ghana, and Mozambique, Airbnb has been considered one of the most affordable lodgings available for travelers in Africa.
- Average Occupancy Rate in Africa: 3%
- The highest occupancy rate in comparison to West Africa
TOP 3 SHORT-TERM RENTAL MARKETS IN AFRICA:
Seychelles
Seychelles is known for its white-sand beaches, lofty granite boulders, palm-fringed forests, and azure waters are the ethos of Seychelles tourism. With over 500,000 tourists visiting Seychelles yearly, this 115-island archipelago offers Asian and African cultures.
- Median Daily Rate: $151
- Occupancy Rate: 50%
South Africa
South Africa is notably remarkable for having 10 of UNESCO’s world heritage sites because of its exquisite landscapes and wildlife. Relatively, there have been over 14 million tourists visiting South Africa annually.
- Median Daily Rate: $67
- Occupancy Rate: 23%
Cape Verde
Known for most Europeans’ winter escape, Cape Verde offers a tropical paradise with tasty gastronomy. Cape Verde is one of the domestic travel destinations in South Africa with over 3 million visitors every year.
- Median Daily Rate: $67
- Occupancy Rate: 23%
EUROPE
Europe is the second smallest continent in the world, but it offers so many extraordinary sceneries at minimal distances for travelers. Airbnb in Europe declares that there are over 345,000 jobs which generate a whopping amount of €19 billion because of tourist spending.
- Average Occupancy Rate in Europe: 37%
- The highest occupancy rate in comparison to all continents worldwide
TOP 3 SHORT-TERM RENTAL MARKETS IN EUROPE:
Luxembourg
Known as the second richest country worldwide, Luxembourg offers fantastic wages to the majority of employees. Its combination of French & German cuisine attracts both local & international tourists from across the globe.
- Median Daily Rate: $93
- Occupancy Rate: 71%
The Netherlands
The Netherlands is one of the most visited countries in Europe because of its labyrinth of romantic canals, windmills, cheese markets, and so much more. Over the last year, there have been 6.3 million foreign tourists that stayed in Dutch tourist accommodations.
- Median Daily Rate: $112
- Occupancy Rate: 68%
Iceland
Iceland is recognized for its rich cultural history and folklore, along with its wondrous volcanoes and glaciers. Its foreign overnight visitors have increased by 44% with a total number of 700,000 visitors annually.
- Median Daily Rate: $164
- Occupancy Rate: 64%
LATIN AMERICA
Known as the most urbanized continent in the world, Latin America is now Airbnb’s fastest-growing market, according to recent news. Currently, people speak more than 370 languages in Latin America. This continent also has a wide variety of natural resources and a very interesting history of art and literature.
- Average Occupancy Rate in Latin America: 22%
- The highest occupancy rate in comparison to Oceania
TOP 3 SHORT-TERM RENTAL MARKETS IN LATIN AMERICA:
United States Virgin Islands
The U.S Virgin Islands are known for their white sand beaches, good fishing, and superb outdoor activities. With over 2 million visitors annually, this area is visited mostly for popular destinations such as Virgin Islands National Park, Magens Bay, Trunk Bay, Tortola, and many more!
- Median Daily Rate: $247
- Occupancy Rate: 70%
Puerto Rico
Puerto Rico’s spirit and extensive history – not to mention the breathtaking views of the ocean! The famous go-to tourist attraction in El Castillo, along with other tourist destinations in Puerto Rico welcomes almost 4.8 million local and international visitors annually.
- Median Daily Rate: $133
- Occupancy Rate: 68%
Bermuda
Bermuda is certainly one of the most preferred paradise by divers from across the world because of its gorgeous views of coral reefs and underwater caves. According to government statistics, Bermuda’s tourism sector provides hundreds of millions of dollars in government revenue.
- Median Daily Rate: $192
- Occupancy Rate: 62%
OCEANIA
Oceania may be the smallest continent in the world by land, but it has the world’s two largest coral formations. The countless small islands in Oceania are recognized from across the globe and are being revisited by numerous tourists because of their various natural attractions.
- Average Occupancy Rate in Oceania: 20%
- Highest occupancy rate in comparison to Central America
TOP 3 SHORT-TERM RENTAL MARKETS IN OCEANIA:
Australia
This top-ranking country in Oceania welcomes about 9.3 million visitors annually because of its rainforests, beaches, and exquisite wildlife. Some of Australia’s tourist attractions include the Sydney Opera House in NSW, Bondi Beach, Great Barrier Reef Marine Park in Queensland, and many more.
- Median Daily Rate: $154
- Occupancy Rate: 56%
New Caledonia
New Caledonia is a popular tourist destination because it offers various exciting outdoor activities and picturesque landscapes. Let’s not forget that it’s also a whale-watching destination!
- Median Daily Rate: $59
- Occupancy Rate: 42%
New Zealand
New Zealand’s beautiful lofty mountain peaks, lakes, and glaciers truly attract the majority of tourists to visit – with a remarkable 4 million annual tourists across the globe. Some of its tourist attractions include Tongariro National Park, Golden Bay, Wai-o-tapu, and many more.
- Median Daily Rate: $114
- Occupancy Rate: 39%
SOUTH-EAST ASIA
South-east Asia’s world-class cuisine, diverse cultures, and plenty of must-see beaches rank it as a favorite destination across the world. While it’s also popular for its year-round tropical climate, there are various tourist attractions in South-East Asia.
- Average Occupancy Rate in South East Asia: 4%
- Highest occupancy rate in comparison to Africa
TOP 3 SHORT-TERM RENTAL MARKETS IN SOUTH-EAST ASIA:
Singapore
Singapore’s international travel has a minor decrease in comparison to 2020’s travel, but Statista’s data still reveals that there are still approximately 0.33 million visitor arrivals! Some of the top-rated tourist attractions in Singapore include Marina Bay Sands, Botanic Gardens, and Singapore Zoo.
- Median Daily Rate: $86
- Occupancy Rate: 12%
Malaysia
Tourism is one of the greatest sectors in Malaysia, which boomerangs to providing almost a quarter of the total workforce in the country. Malaysia’s mesmerizing Petrona’s Twin Towers, Penang Hill, and Batu Caves are some of the tourist’s favorite places to go to.
- Median Daily Rate: $47
- Occupancy Rate: 12%
Philippines
With over 37 million tourist arrivals annually, the Philippines is mostly visited by various local & international visitors because of its pristine beaches, amazing nightlife, and various local cuisine.
- Median Daily Rate: $38
- Occupancy Rate: 8%
SOUTH AMERICA
South America is home to the longest mountain range, the largest lake, and the longest river. Aside from its variety of natural attractions that draw millions of tourists, its tourism industry also plays a huge role in the overall economic impact.
- Average Occupancy Rate in South America: 13%
- Highest occupancy rate in comparison to the Middle East
TOP 3 SHORT-TERM RENTAL MARKETS IN SOUTH AMERICA:
French Guiana
French Guiana offers a wide variety of beautiful seascapes with both French & Brazilian cultures on the side. While this country may require you to speak French to get by, tour companies are readily available to help less experienced travelers.
- Median Daily Rate: $68
- Occupancy Rate: 52%
Brazil
Brazil’s famous Amazon and waterfalls are recognized across the globe, but also for its carnival festivals and soccer! According to Airbnb’s recent statistics, there has also been steady growth in Brazil.
- Median Daily Rate: $54
- Occupancy Rate: 19%
Chile
Chile is often known to have a strong, diverse culture, but it also offers a very interesting history of literature and art. Some of its tourist attractions include Valle de la Luna and the Atacama Desert, Torres Del Paine National Park, and Marble Caves.
- Median Daily Rate: $68
- Occupancy Rate: 19%
MIDDLE EAST
The Middle East is generally known for its vast oil reserves and has various places for tourists to enjoy visiting. It welcomes a wide array of activities and historical events, with unique ethnoreligious heritages and natural attractions.
- Average Occupancy Rate in the Middle East: 10%
- Highest occupancy rate in comparison to the Asia
TOP 3 SHORT-TERM RENTAL MARKETS IN MIDDLE EAST:
Cyprus
This country’s extraordinary Mediterranean cuisine with breathtaking scenery is just one of the many favorites of tourists. Based on recent statistics, there has been an increase in Airbnb demand in Cyprus (52%) which recovered after the pandemic started.
- Median Daily Rate: $85
- Occupancy Rate: 38%
United Arab Emirates
UAE’s two largest cities – Dubai and Abu Dhabi are attracting millions of visitors annually because of their stunning engineering and business hubs. Generally known as the third-richest country in the world, the United Arab Emirates is famous for Burj Khalifa, Desert Safari, and Louvre Abu Dhabi.
- Median Daily Rate: $131
- Occupancy Rate: 35%
Israel
Israel’s strong economy and landmarks to several religions across the globe are also recognized as some of the world’s holy sites. With many devotees traveling to Israel, the country also has top-rated tourist attractions including Jerusalem, Nazareth, and The Dead Sea.
- Median Daily Rate: $172
- Occupancy Rate: 31%
ASIA
Asia is the world’s largest regional economy and the birthplace of many religions. With various historical landmarks and sites including the Petronas Towers, Angkor Wat, Taj Mahal, and many others – Asia remains to have an upward growth in Airbnb. In addition to this, the UAE and Israel, which are also part of Asia, are among the top short-term rental markets in the continent.
- Average Occupancy Rate in Asia: 8%
- Highest occupancy rate in comparison to South East Asia
TOP 3 SHORT-TERM RENTAL MARKETS IN ASIA:
South Korea
South Korea’s sub-tropical islands, high-tech cities, and famous tourist destinations including Changdeokgung Palace, Seoul Tower, and the National Museum of Korea are commonly attracting millions of visitors worldwide.
- Median Daily Rate: $71
- Occupancy Rate: 35%
Japan
Airbnb in Japan is certainly popular and it has increased by 45% YoY. Some of the fascinating tourist attractions in Japan include Mount Fuji, Kinkaku-ji, Historic Kyoto, and many more.
- Median Daily Rate: $72
- Occupancy Rate: 23%
Taiwan
Taiwan is widely recognized for its Sky Lantern Festival, the business centre of Taipei 101, and Shilin Night Market. According to recent news in Taiwan, Airbnb is also one of the most preferred choices for travelers.
- Median Daily Rate: $70
- Occupancy Rate: 16%
WEST AFRICA
While West Africa offers unique architecture and rich ecology with beautiful landscapes, Airbnb in the area is an up-and-coming trend. Based on recent African Business news, tourism in West Africa is still recovering and is improving its inadequate infrastructure and services.
- Average Occupancy Rate in West Africa: 2%
- The lowest occupancy rate in all continents
TOP 3 SHORT-TERM RENTAL MARKETS IN WEST AFRICA:
Liberia
“Monrovia skyline“, by blk24ga, licensed under CC BY 3.0
Known to be the first African republic to claim independence, Liberia is rich in mineral and natural resources such as rice, plantains, yam, and cassava.
- Median Daily Rate: $75
- Occupancy Rate: 12%
Senegal
Senegal is home to ancient local traditions with a combination of French and North African influences. It is also known to be West Africa’s most-visited destination.
- Median Daily Rate: $46
- Occupancy Rate: 4%
Gambia
Gambia’s famous wildlife, peaceful beach towns, and national parks are popular with tourists, along with exciting outdoor activities including birdwatching.
- Median Daily Rate: $35
- Occupancy Rate: 3%
CENTRAL AMERICA
Central America has one of the most remarkably well-preserved Mayan pyramids and colonial sites. Because of its hundreds of islands, Central America is also known to be a favorite holiday destination.
- Average Occupancy Rate in Central America: 16%
- Highest occupancy rate in comparison to South America
TOP 3 SHORT-TERM RENTAL MARKETS IN CENTRAL AMERICA:
Costa Rica
Costa Rica’s thrilling outdoor activities such as river rafting, zip lining, and exploring exotic wildlife are a top preference for travelers who are up for adventures.
- Median Daily Rate: $81
- Occupancy Rate: 28%
Mexico
This country is not just known for its incredible culture and monuments, but also for its must-taste cuisine! Mexico has a lot to offer to tourists – from live music to pristine beaches, it’s certainly one of the favorite places of both local & international travelers.
- Median Daily Rate: $59
- Occupancy Rate: 24%
Belize
Belize is popular for its wondrous rainforests and Mayan sites. The world’s biggest double barrier reef is also home to Belize, which is considered as a major tourist attraction.
- Median Daily Rate: $113
- Occupancy Rate: 23%
NORTH AMERICA
Next to Europe, North America has the second highest occupancy rate worldwide. Known as the third largest continent, North America is home to some of the world-famous landmarks including the Grand Canyon, Niagara Falls, and Hawaii.
- Average Occupancy Rate in North America: 24%
- Highest occupancy rate in comparison to Latin America
TOP 3 SHORT-TERM RENTAL MARKETS IN NORTH AMERICA:
Canada
Home to the national winter sport, ice hockey, Canada offers so much more than just maple syrup! Locals in Canada are generally polite and friendly, which makes it easier for tourists to get around. Canada’s nature and beautiful landscapes are a definite magnet to the majority of tourists.
- Median Daily Rate: $121
- Occupancy Rate: 63%
United States of America
The USA consists of a wide variety of landmarks and historic monuments, with an amazing film, art, & music industry. Usually called to be the ‘American dream’, Airbnb in the USA has also consistently thrived through the years and is among the top preferences of tourists.
- Median Daily Rate: $175
- Occupancy Rate: 62%
Greenland
Noted for its glaciers and the world’s largest island, Greenland also boasts its 3 UNESCO World Heritage sites – which attract the majority of tourists to spend vacations. Interesting fact: travel by land is only possible by snowmobile and dogsled in Greenland!
- Median Daily Rate: $103
- Occupancy Rate: 50%
CONCLUSION
In summary, because Airbnb is rapidly increasing and constantly changing for each city in the world, it is crucial to make decisions based on wild guesses. The data points mentioned in this article such as Airbnb occupancy rates per continent and each of their respective country’s occupancy rates and median daily rates should be your basis before starting an Airbnb business.
Hence, if the data presented above has given you ideas to boost your strategic pricing plan for your business, then an Airbnb calculator is certainly what you need for success in the long run. It’s a fact that some of the STR investors are also considering Airbnb Rental Arbitrage, but they still need to have a reliable data tool to base their conclusions on!
As we live in a digital era, an accurate data analytics tool can help your business stand out among your surrounding competitors and benchmark your property by tracking the occupancy rates of competing listings in your preferred city. With the help of our all-in-one analytics service, you can vastly enhance your monthly revenue, create a comparison for each neighborhood, add the appropriate amenities and so many more exciting features.
Robyn is a passionate content writer about short-term rentals and is dedicated to research & sharing property investment strategies and analysis worldwide. She is a graduate of Alliance Française de Manille, a songwriter, an animal advocate, and an avid fan of The Beatles since birth.
