Is the Short-Term Rental Market Recovering? September Data Explained

Jamie Lane (0:05)

Welcome to the STR Data Lab.

Hello and welcome to the STR Data Lab. I'm Jamie Lane, Chief Economist at AirDNA, and I'm joined again by my good friend and colleague, Bram Gallagher. Bram, welcome back.

Bram Gallagher (0:22)

Thanks, Jamie. Always fun on the Data Lab. Thanks for inviting me.

Jamie Lane (0:25)

Yeah, so lots to dig in on with September performance. We're sitting here now in mid-October. I just got back from a lot of travel around Nashville for the Verma Conference and then Lyon, France for the Vacation Rental World Summit.

So lots of talking with operators, property managers, other vendors in terms of what they're seeing around their market. But I do want to give a shout out to all our listeners that came up at all these events and said hi, told me how much they enjoyed listening to the show. And I think, Bram, across the board, everyone told me at least that they love you on the show and they love the data insights that they get every month. So great work there.

Bram Gallagher (1:17)

Thanks, that is so kind of everyone. So thank you, listeners.

I was wondering about the World Summit. Was there a lot of French operators there, or was it just in France and everyone was coming from around the world?

Jamie Lane (1:32)

It was in France and everyone was coming from around the world. I did meet a couple French operators, but it was by no means dominated by French operators.

I was actually a bit surprised how few there were there.

Bram Gallagher (1:47)

Yeah, considering what a big market it is.

Jamie Lane (1:50)

Yeah, I'm one of the second largest in the world behind the US.

Bram Gallagher (1:54)

Maybe they've all figured it out by now. They don't need any more info.

Jamie Lane (1:58)

Yeah, or I'm a plus side or downside, and the conference is all in English.

So that does limit some of the attractiveness of going to a conference when it's in France and it's not going to be in French. Though fortunately, and we had a lot of people come with the booth that wanted to speak to an AirDNA rep in their native language. So having our teams there from Barcelona that speak any number of languages was a big help. Yeah.

Bram Gallagher (2:29)

Maybe that's an opportunity, putting on a francophone event.

Jamie Lane (2:32)

Absolutely.

So I'll give you the rundown of what I heard from people, and then I want to get your response, Bram, of whether you think it's holding up in the data, or whether you think it's not. So the first sort of feedback I heard was about the overall economy, and that it's like, it's fine. Like, it's not growing extremely strong, but it's not weak, and that overall, the consumer is doing good enough to support future growth, but nothing, I'm too excited to get about on either way, and that you could look for really strong things in the data, and you could look for really weak things in the data, and depending on what you're looking for, you could probably find both. What's your response on that, on the economy?

Bram Gallagher (3:32)

Yeah, I think I have to agree wholeheartedly. I think the defining feature of this economy over the last maybe two years is this kind of ambiguity in the signal. Some of them are really good. We've got really low unemployment, so we're working on with pretty much natural unemployment, or even below natural unemployment. Inflation is a little bit elevated, but it's not to the levels that we had seen during COVID. And we've got a lot of movement going on in interest rates and that sort of thing. I think it's putting some plans on hold, not just in the short-term rental world, but more broadly in the economy. Some people, I think, are going to be waiting to see where interest rates land to do some stuff. So there's a little hesitation, I guess. But on the other hand, business investment is still really strong, particularly with the AI build out.

That may be creating actually a little bit of a drag on the GDP numbers.

But again, it's ambivalence, but it's productive capital that's going to hopefully be used in the future to enhance productivity. So yeah, we've got a lot of different signals, but I would say, yeah, it's muddling along. We've got some headwinds. Energy prices are not my favorite topic right now, and of course, the interest rates. But it's that kind of American can-do spirit, right? We're just still going to work. We're still making it happen. We're still expecting to enjoy the holidays. We're still expecting to have jobs next year as well. And the numbers seem to be backing that up, the recent ones.