STR Demand Rebounds: World Cup Surge, Summer Travel Trends & What Hosts Need to Know

**Bram Gallagher** (0:05)
Welcome to the STR Data Lab.

**Jamie Lane** (0:12)
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, how are you doing?

**Bram Gallagher** (0:22)
I'm doing great, Jamie. It's always fun to be on the Data Lab, although it's going to be tough following up last week's Adam Sacks, one of the titans in the industry. We loved that episode and got a lot of great information from it.

**Jamie Lane** (0:33)
Yeah.
It's crazy how strong the hotel industry is doing this year. I have to think it's just like it did so bad last year, like it can only go up from here. But I'll say it hurts me a little bit internally when I see demand growth up 2 percent year-to-date in hotels and only up 1 percent year-to-date for short-term rentals.
It feels like something's wrong.

**Bram Gallagher** (1:00)
Well, to your point, they had a very difficult year last year. We had a pretty good first half of the year last year as well. They were working off of a weak comp and we were working off of a pretty strong comp because I guess we titled, what was it, it was the year-end. We titled it a tale of two halves because the first half of the year is very, very strong coming out of the gate with demand growth, double digits for most of the months in the first half of the year, and then it really tapered off pretty strongly.
I'm seeing some recovery here that, so I'm pretty hopeful that by the time we get to the year-end, we'll at least be managing the hotels if not outpacing them.

**Jamie Lane** (1:44)
Yeah, so typically, we start with the economy, but maybe we'll flip it a bit and talk a little bit about what's happening on the short-term rental performance side, because it is a better month. Like we had our first month of occupancy gains. We saw decent ADR growth. Maybe we could start with you just running through the numbers of what we saw in the month of May across the US short-term rental industry.

**Bram Gallagher** (2:21)
Yeah. So you're right. We did see a lot of positive numbers. So occupancy was up for the first time and it was a long time actually. What was it? I guess May of last year was the last time we saw a real positive increase in the occupancy rate. Maybe it's just the charm of May. But on the other hand, we do have that idea that as we're moving towards the latter half of the year, we're going to be against weaker comps. One other thing of course too is that we predicted at the beginning of the year, investment conditions were just better than they had been in a long, long time and they were for a brief moment in time.
I don't know if it was long enough though, because mortgage rates, they dip below 6 percent. Now, they've gone right around 6.5 percent since this war in Iran. We're worried about inflation, so of course, long-term interest rates are going up to accommodate inflation over the long term.
Maybe even some risk being priced into there as well. So I don't know if the window is long enough to really give that boost to supply like we were hoping.
So I think that is going to help occupancy as time goes on, be a little bit better than we predicted. In fact, we're going to be coming out with a meatier outlook pretty soon. And so far, yeah, I've revised occupancy up for most of the location types in the nation as a whole as well.

**Jamie Lane** (3:46)
Is that your way of telling me, Bram, like, yeah, occupancy was up, but it still wasn't a super positive demand growth story?

**Bram Gallagher** (3:54)
Well, the demand was up, I think, 1.5 percent, which is better than negative. We did see a negative demand in February because all the snow was atrocious this year or I should say the lack of snow.
The demand is not flying off the shelves at a rate of 1.5 percent growth. But if I were to go back in time, to that last May, that May of 2025, we saw almost 6 percent growth, which is pretty heavy.
We've seen a number of Easter shifts happen over the last few years, so there has been a little bit of discombobulation between April and March, and then now we're bleeding into the May month as well. So it's difficult to say. Is it a hard top? It's 6.2 percent. I'm sorry, I misspoke, May of last year, 6.2. So that was a difficult month to compare against. I think that demand is going to start looking up though. Those numbers are going to start getting higher as we do get into some weaker comps. Of course, we have demand generation going on in June and July with the World Cup. I'm thinking that is going to give us a meaningful boost, especially in the host cities. But it could also bleed out into other places. As we know, a lot of people are taking longer trips as well. So that's going to help international travel as Adam pointed out. It's been a headwind this last year or so with tariffs, but I think maybe with the World Cup, we might see a reversal.