Education for Investors
How to Analyze Airbnb Markets for Short-Term Rental Success
How to Analyze Airbnb Markets for Short-Term Rental Success
Picture this: you’re driving into a new city, eager to explore. Instead of winging it and hoping for the best, you probably pull out your phone to check Yelp for the top-rated spots. Why risk a bad meal or experience when you can have a treasure trove of reviews at your fingertips? That’s how we view data in short-term rental investments.
Think of data as your investment GPS. It guides you down the most profitable routes and helps you dodge costly mistakes. Just as you wouldn’t explore a new city blindfolded, you shouldn’t jump into a new rental market without solid information. Yet, many investors rely on gut feelings, crossing their fingers and hoping for the best.
Our mission is to help you make smart, fact-based decisions. Our Airbnb Data analysis transforms a confusing market into a clear roadmap. You can pinpoint where demand is soaring, discover what types of properties guests want, and make choices that are not just good ideas—they’re the right ones. Read this article to understand how to invest in short term rentals using data to drive smart decisions.
Understanding Short Term Rental Market Dynamics
Market dynamics are the forces that drive the demand and supply of short-term rentals in a particular area. These can include everything from seasonal tourism trends and local events to economic conditions and short-term rental regulations.
A thriving market doesn’t just happen by accident—it’s the result of these factors aligning. Airbnb market analysis is identifying the information most important for decision making for your short term rental strategy.
Skip the research and jump to the solution you need: Market Insight Reports for the top 50 STR rental and vacation rental markets in the U.S. or a custom report for your specific market.
It's the Airbnb analyzer you've been looking for.
Turning Airbnb Statistics into Strategy
Understanding market dynamics will help you transform raw Airbnb market data into actionable strategies for your short term rental business.
For instance, if two-bedroom properties are in higher demand than three-bedrooms, focusing on smaller rentals can lead to better occupancy and competitive pricing. Similarly, data showing that outdoor amenities like fire pits or hot tubs boost Average Daily Rate (ADR) investing in these amenities becomes an easy decision. Every dollar you spend should serve a purpose in enhancing your listing and attract higher-paying guests.
By leveraging Airbnb analysis tools, you can make data-backed decisions that turn potential risks into high-performing investments. This approach means your strategy is based on insight, not guesswork, driving both success and profitability for your short term rental business plan.
Which short term rental statistics matter
1. Market Summary
The short term rental statistics that matter:
Total number of active listings
Average daily rate (ADR)
Occupancy rate
Revenue per available room (RevPAR)
This overview provides a clear understanding of the market's overall health and potential. It offers a helpful snapshot of how the market is performing, allowing investors to see if it’s thriving, stable, or facing challenges. High ADR and occupancy rates indicate strong demand, presenting an opportunity to enter the market with competitive pricing.
2.Top Performing Cities within the Market
The short term rental statistics that matter:
Cities or neighborhoods with the highest average revenue
Top occupancy rates
Most active listings
This data reveals where the gold mines are within a broader market. Investors should see this as a targeted map highlighting where the most profitable opportunities lie. If one city shows significantly higher earnings but lower competition, that’s a signal to consider investing in that area. It’s like knowing where the best fishing spots are before you cast your line.
3.Submarket Analysis
The short term rental statistics that matter:
Detailed performance metrics for various property types (e.g., single-family homes, condos, luxury rentals) and sizes (e.g., 2-bedroom, 4-bedroom)
This breaks down the market into specific segments, showing which types of properties perform best. Investors should use this to refine their investment strategy, deciding not just where to buy, but what to buy. For example, if the data shows that 3-bedroom luxury homes make the most money, but there aren’t many available, this means it could be a great chance to invest.
4.Ideal Guest Persona Profiles
The short term rental statistics that matter:
Demographic details
Travel behaviors
Preferences for amenities
Average spending
This helps investors tailor their property design and marketing strategies to attract the right guests. The more you know about the the guests that actual travel to your market, the better you can engage them. If the ideal guest persona are families with kids, investors should focus on things like play areas, board games, and making the property safe for children.
5.Seasonal Trends and Demand Fluctuations
The short term rental statistics that matter:
Monthly occupancy rates
ADR fluctuations
Revenue changes throughout the year
This data helps highlight the natural changes in the market, offering insights into seasonal trends and shifts. Investors can use this information to fine-tune their pricing strategies, marketing, and maintenance plans. For instance, if demand slows in the winter, offering long-term rental options or adding winter-friendly amenities can help keep revenue steady.
6.Short-Term Rental Regulations
The short term rental statistics that matter:
Local laws and regulations regarding rental durations
Property types
Licensing requirements
Understanding these guidelines is key to making informed investment decisions and avoiding potential pitfalls. This data helps investors understand markets where rules might affect profit. It guides them to pick places where they can work within the law.
It’s all about knowing the boundaries and adjusting your strategy to thrive within them.
The short term rental statistics that matter:
Number of similar listings
Average review scores
Most popular amenities offered
7.Competitive Analysis
This data highlights the competitive landscape and shows how an investor’s property can stand out. Investors should use this to identify what competitors are missing and position their property to fill that gap. For example, if most competitors lack high-speed internet and workspaces, catering to remote workers could be a strategic move.
8.Revenue and Profit Potential for Different Property Types
The short term rental statistics that matter:
Revenue projections
Potential profit margins
Expected ROI for various property configurations
This is where investment strategy becomes more focused. Investors can view this as an Airbnb profit plan, helping them identify which properties align best with their budget and goals for the highest potential returns. It’s similar to having personalized guidance, offering clear insights on where to invest for optimal results in the short-term rental market.
9.High-Impact Amenities Analysis
The short term rental statistics that matter:
Popular amenities and their impact on ADR and occupancy rates (e.g., hot tubs, pet-friendly spaces, outdoor entertainment areas)
This data tells the story of what guests value most and how you can capitalize on those preferences. Investors can use this to make strategic upgrades that significantly boost revenue. For example, adding a hot tub might seem costly upfront, but if the data shows it can increase ADR by 15%, the payback period is short and the long-term gain is substantial.
10.Market Growth Potential
The short term rental statistics that matter:
Historical data on market performance
Upcoming developments
Economic indicators
This information provides insight into future trends and opportunities, helping investors anticipate what’s coming next. With this data, investors can spot places that might grow. This helps them make smart choices before anyone else. It’s all about staying ahead and positioning yourself for the next great opportunity.
Breaking Down the Key Elements
Let’s dive into the basic parts that shape how markets work and how they affect your investment choices:
1. Tourism Trends: Understanding tourism patterns is key to optimizing your rental strategy. Knowing when peak and off-peak seasons are can help you prepare for busy times. It also lets you change your prices to match demand.
In markets like South Dakota, for example, summer is the prime time for tourism, with visitors flocking to national parks and outdoor activities. During the winter, heavy snowfall can slow things down as access to remote areas becomes challenging.
However, we've identified a hidden opportunity in early spring, when off-season bookings surge because of popular events like the annual film festival and the highly sought-after snowmelt hiking trails. Most investors overlook these trends, but seizing them can offer an unexpected boost in revenue.
2. Economic Factors: How well an area's economy is doing can have a big effect on how well short-term rentals perform. A booming local economy often means more travelers coming for business or leisure, increasing demand for places to stay.
3. Local Events and Attractions: Local events can create a surge in demand. One prime example that comes to mind is Tennessee’s legendary music festival, Bonnaroo —a four-day festival that draws tens of thousands of music lovers to the small town of Manchester each year.
4. Regulatory Environment: Navigating local regulations can be tricky, but it’s a crucial part of market analysis. Different cities have different rules for short-term rentals, and these can drastically impact your profitability. Before you even think about buying, make sure you’re clear on the rules. Are there restrictions on the number of days you can rent? Is there a cap on the number of properties you can own? Are there specific "resort zones" that Airbnb are only allowed? These are make-or-break details.
5. Seasonal Variations: Understanding seasonal variations is key to maintaining high occupancy throughout the year. For instance, beach towns may thrive in the summer but struggle in the winter months. However, some savvy investors can turn this challenge into an opportunity. Our advice? Think outside the box. In the off-season, market your property as a cozy retreat for remote workers or offer long-term discounts for snowbirds looking to escape colder climates.
Knowing when peak, low, and shoulder seasons happen can help you set the right prices. This way, you can stay ahead of the competition.
6. Competitive Landscape: It's important to know who your competition is and what they offer. This is as crucial as knowing the strengths of your own property. We’re not just looking at the number of listings—we’re looking at what’s missing. If everyone’s offering the same rustic cabin experience, there’s room for something different, like a luxury glamping setup or a pet-friendly home. It’s about finding the gaps in the market and filling them.
How to Build an Investment Strategy with Data
These data points work together to give a clear picture of a market's potential. By looking at the data all together, you can create an investment strategy that fits your goals, takes advantage of market strengths, and reduces potential risks, helping you shape a solid short-term rental business plan.
From Data to Strategy:
Start with the market summary to identify overall health.
Dive into the top-performing cities and submarkets to find the best opportunities.
Align your property choice with the ideal guest persona to ensure high demand.
Use seasonal trends to optimize pricing and occupancy.
Be aware of regulations to avoid legal pitfalls.
Analyze the competition to make your property unique.
Maximize profits by investing in high-impact amenities.
Keep an eye on growth potential to secure long-term success.
By turning raw numbers into a strategic Airbnb business plan, investors can confidently make data-driven decisions that lead to higher profitability and sustainable growth in the short term rentals market. That’s the power of data storytelling.
Where to get the data
Where does one even start when looking for all of these data points?
We've complied a list of the best Airbnb data sites and Airbnb research tools that investors can use to gather raw data for short-term rental market analysis.
BUT ... if you want to save time and money the quick win is to invest in our Market Insights Report. It has the best Airbnb analytics done for you, all in one place, accompanied by our 1 hour walk through of the data showing you exactly how to use it to optimize your rental.
After just one hour you will walk away with actionable insights that you can use in your business right away.
1. AirDNA - $380 - $10,000+ annually
Type of Data: Market data for Airbnb and VRBO listings, including average daily rate (ADR), occupancy rates, revenue estimates, and property performance metrics.
How to Use It: Investors can use AirDNA to analyze the performance of existing short-term rentals in a specific area. You can look at numbers like average daily rate (ADR) and occupancy rates for different types of properties and areas. This helps you find the best-performing spots and see where to invest.
2. STR Insights - $1600 - $2340 annually
Type of Data: Comprehensive data on short term rental performance, including market trends, demand drivers, and competitive analysis.
How to Use It: STR Insights provides a detailed look at market dynamics, helping investors understand the overall health of a market and identify emerging trends. This is great when you are comparing several markets. It helps you decide where to invest by checking things like demand growth and how much money you could make.
3. Mashvisor -$360 -$1440 annually
Type of Data: Real estate investment analytics, including rental income, cash flow estimates, cap rate, and occupancy data for both short-term and long-term rental properties.
How to Use It: Investors can use Mashvisor to compare the profitability of different property types and rental strategies (e.g., short-term vs. long-term) within a market. This helps you choose the best way to invest for the highest returns.
Type of Data: Listing details like bedrooms and bathrooms, nightly rates, cleaning fees, calendars and availability, as well as guest reviews that provide so much detailed insights as to what guest love and what could be better.
How to Use It: Investors can look at these listings to improve their pricing based on rent data. They can check guest reviews to make their listing descriptions better and point out features that others don’t have. It’s also a good idea to add amenities that are missing in the market. This helps your listing stand out and justify higher average daily rates.
4. Airbnb and VRBO - Free
5. Google Trends - Free
Type of Data: Search volume trends for specific keywords related to travel and short-term rentals.
How to Use It: Google Trends can help investors gauge interest in particular destinations or whether travelers want to stay at vacation homes or hotels. For example, a rising search trend for “Tennessee cabin rentals” might indicate increasing demand, suggesting it could be a good time to invest in that market.
6. Local Tourism Boards and Chambers of Commerce - Free
Type of Data: Visitor statistics, tourism reports, and event calendars.
How to Use It: These sources provide valuable insights into the factors driving demand in a market, such as annual visitor numbers and upcoming events. Investors can use this information to identify peak seasons and plan marketing strategies that match traveler trends.
7. U.S. Census Bureau - Free
Type of Data: Demographic and economic data, including population growth, median income, and housing statistics.
How to Use It: Knowing the local population and economy can help investors estimate how many people will want to rent in the long run. For example, if a lot of people are moving to an area or if the average income is going up, it might mean that the rental market will do well in the future.
7. U.S. Census Bureau - Free
Type of Data: Demographic and economic data, including population growth, median income, and housing statistics.
How to Use It: Knowing the local population and economy can help investors estimate how many people will want to rent in the long run. For example, if a lot of people are moving to an area or if the average income is going up, it might mean that the rental market will do well in the future.
8. Zillow and Realtor.com - Free
Type of Data: Real estate market data, including property values, rental prices, and housing trends.
How to Use It: Investors can use these platforms to track property values and rental rates in their target markets. This helps figure out if properties cost too little or too much. It also shows the chance for price growth and rental income.
9. Yelp and TripAdvisor - Free
Type of Data: User reviews and ratings for local attractions, restaurants, and activities.
How to Use It: By analyzing what visitors are saying about local attractions and businesses, investors can get a sense of what draws people to the area and what they’re looking for in their experience. This can inform decisions about which amenities to include or highlight in a property listing.
How to Expertly Analyze an Airbnb Market In less than an hour
You could spend endless hours sifting through websites, analyzing countless spreadsheets, and trying to piece together a clear picture of the short term rental market for your Airbnb investment analysis, but why waste the time? We get it. As a savvy investor, your time is your most valuable asset—and that’s exactly why our Market Insights Reports are designed to do the heavy lifting for you.
Why waste precious time and resources on guesswork when you can have a complete, data-driven roadmap in your hands?
Here’s How Our Reports Save You Time and Money:
1. All the Data You Need in One Comprehensive Report
Our Market Insights Reports consolidate everything you need to know about a market—average daily rates, occupancy trends, top-performing property types, local regulations, and even ideal guest personas. No more jumping from site to site or struggling to make sense of fragmented data. It’s all right here, in one beautifully organized package.
Think about the time you’d spend gathering and analyzing this information yourself. With our reports, you get a crystal-clear market overview in minutes—not days.
2. Instant Actionable Insights
We don’t just give you raw data. We offer useful insights that help you make smart decisions.
You’ll know exactly which areas to target, which property types are in highest demand, and what amenities will boost your revenue. This means you can start making profitable decisions immediately, without second-guessing or unnecessary trial and error.
Skip the time-consuming research and strategy meetings. Jump right into action with our pro tips.
3. Avoid Costly Mistakes
Investing in the wrong market or property can set you back thousands of dollars—not to mention the stress and wasted time.
Our reports give you a heads-up about any hidden trouble spots like strict regulations or overcrowded markets. This way, you can avoid areas that are too risky.
This kind of foresight is invaluable, saving you from expensive missteps and ensuring you’re investing your money where it will truly pay off.
Protect your investment and avoid the costly mistakes that can derail your financial goals.
4. Leverage Our Expertise—At a Fraction of the Cost
Hiring a consultant to gather and interpret this level of detail could easily run into thousands of dollars. With our Market Insights Reports, you’re getting the same depth of analysis and professional insight at a fraction of the cost. It’s like having a dedicated team of data experts and market analysts working for you, without the hefty price tag.
Get top-tier expertise for a fraction of what you’d pay for individual consulting services.
5. Confidently Enter New Markets
Whether you’re a seasoned investor looking to diversify or new to the short-term rental game, our reports provide the clarity and confidence you need to enter new markets strategically. You’ll know exactly where your investment will thrive, allowing you to scale your portfolio with precision and confidence.
Why take the leap blindfolded when you can step into new markets fully informed and prepared?
6. Boost Your ROI—Faster
Our insights aren’t just designed to help you choose the right market—they’re crafted to help you optimize every aspect of your property to achieve maximum profitability. From pricing strategies to design tips tailored to your ideal guest, we show you how to turn every dollar you invest into a higher return.
Cut through the noise, focus on what works, and watch your ROI soar with data-driven decisions.
7. Ready to Make Your Next Investment Decision Your Best One Yet?
Say goodbye to scattered data and uncertain plans! Invest in a Market Insights Report for clear, actionable information that sets you up for success. With just one report, you’ll save valuable time, avoid costly mistakes, and be ready to achieve your best returns.
Don’t just invest—invest smart. Purchase your Market Insights Report today and start making decisions backed by real data, not guesswork. Your next profitable property is just one report away.
