Short-term rental market supply growth from 2022 to 2023

The first in a series of three articles analyzing short-term rental market growth between 2022 and 2023, today we look at supply evolution. As one half of the fundamental supply/ demand equation for short-term rentals, inventory is a significant indicator of health and performance. As we get further from the pandemic and claims left and right arise on the state of tourism, what does inventory truly look like today in comparison to one year ago? In this article we examine short-term rental market supply growth across 25 cities worldwide.

Read on as we rank global destinations by their active entire-home property count growth from June 2023 and June 2022, revealing where inventory has expanded the fastest, the evolving industry and growth trajectory.

Short-term rental market supply growth in highest inventory destinations of 2023

Growth has exceeded expectations as we discovered that 92% of the highest inventory markets displayed positive growth since June of last year. For instance, Kissimmee and Panama City Beach are the only markets with slight negative trends of -2.6% and -0.6% respectively. Overall, the average inventory growth across the top destinations totalled +20.3% growth.

Moreover, Kuala Lumpur in Malaysia has experienced the second greatest increase of 54%, and Paris follows with 41%. London is close behind with 39%. Nairobi and Milano share fifth place each with 28%, Nairobi’s growth slightly larger. Kuala Lumpur is another market that has experienced a remarkable surge in its short-term rental sector. Currently the Urban Planning and Design Branch is implementing initiatives aimed at achieving sustainable urban development. Consequently these, amongst other programs in the country and in others, are tied to rising demand and urbanization in these markets. Likewise, locations like Nairobi have prioritized focus on strategies such as the Kenya Tourism Board promoting domestic visitors.

The 25 global destinations with highest active short-term rental supply 2023

London, Paris and Rome are the three highest ranking destinations in terms of entire home properties in both 2022 and 2023.  

This June, London capped the list with 42k properties, a +40% increase since last June. Furthermore, the median property count across our largest short-term rental markets this summer sat at 16,700, a +22% increase. In total, these markets amount to 455k, which is a +20% growth since June 2022.

Finally this year, the US accounts for the greatest proportion of the largest short-term rental markets, including Kissimmee, Los Angeles, Panama City Beach, Houston, Miami and San Diego, and sees an average inventory change of +6%. 

One year prior, in June 2022, the top 25 markets inventory averaged 15,100 and we measured a median of 13,700. Cumulatively these 25 markets amount to 380k. London ranked first, capping the list with 30k properties. Second, Paris– home to 27.4k properties. In third is Rome with 24.3k properties. These three destinations have remained the three monoliths in property inventory, and so it is worth keeping in mind the relative size and maturity of each of these vacation rental markets when weighing the outcomes. Last in the top five are Kissimmee and Dubai at 23k and 20.2k respectively.

Measure and map short-term rental supply & growth in your market

Generally speaking markets garnering high supply growth have been methodically stimulating the interests of their guests, governments and communities with the mission to lead a balanced tourism ecosystem and lessen the impact of external economic fluctuations. And, in the course of time, are reaping the benefits.

When taking a look at the bigger picture, as of Q1 we see vacation rental supply has seen a general upward trend across the top 10 supply nations since the post-COVID demand uptick, demonstrating the boost to the vacation industry from a global perspective. Outside of the highest ranking 25 cities, when looking at a list of short-term rental cities claimed to have “collapsed” this year, our data continues to suggest little reason for concern that the “bubble” is popping. Take a look at the active listing count several of the US cities suspected to have been hit hard by the revenue collapse:

We anticipate that this gives you a more clear image on the state of the evolution of supply in key inventory markets worldwide. The equilibrium between vacation rental supply and demand shapes and sheds light on the dynamics of the hospitality industry– dictating pricing, occupancy rates, and market trends. Coming next are additional blogs on destination growth on demand and revenue in similar fashion so stay vigilant for the entire picture of the rental industry this year. 

Measure and map short-term rental supply in your destination and gain full visibility and insight over inventory. Discover what Lighthouse data you need for complete understanding of inventory, reservations, and revenue.