After the year-long pandemic destroyed the travel industry, property investors want to know what the US Airbnb demand will be like in 2022.
2020 was the toughest year for both the real estate and travel industries thanks to the COVID-19 pandemic making everyone stay at home. There was no travel, which means no income for hotels and alternative lodgings like Airbnbs. While this year saw early signs of recovery, many investors are still unsure about the future. Will more people travel and want to stay in an Airbnb, or will they hesitate to go somewhere else in fear of catching the virus?
In this article, you will read about our demand forecasting for Airbnb for the coming year, which includes:
- The biggest drivers of Airbnb demand this year
- Airbnb market demand going into 2022
- The top 20 cities in the US with the strongest demand for Airbnbs
Airbnb Demand Forecast for 2022
According to the US Travel Association’s fall forecast, domestic leisure travel will surpass pre-pandemic levels in 2022. Meanwhile, domestic business travel may reach 76% of 2019 levels next year but will not fully recover until 2024. As for international inbound travel, demand and spending are expected to reach 72% of pre-pandemic levels in 2022 and then fully recover by 2024 or 2025.
What Does This Mean for Alternative Lodgings?
As travel continues to recover in the third quarter of this year, so are Airbnbs and other vacation rentals. Analysts estimate that alternative lodgings have improved from covering 24% of global lodging spending in 2019 to 33% this year. Many investors are feeling optimistic about this. As travel demand normalizes, they expect Airbnb, Vrbo, Expedia, and other vacation rentals to benefit in the long term.
While online-travel companies are showing positive earnings as early indications of travel recovery, they caution that the industry is not back to pre-pandemic levels yet because of remaining restrictions. Airbnbs in urban areas, for example, are still operating below 2019 levels, but analysts expect them to get more bookings as vaccination rates increase and local economies reopen.
Airbnb said in their recent earnings report that their gross bookings increased by 48% from last year, and were also higher than the same pre-COVID period. And as of the end of September, Airbnb had 40% more nights booked for Thanksgiving week than they did in 2019. The company saw this as a sign that strong demand for travel (and alternative lodgings) will extend into 2022.
These trends and forecasts might help property investors like you to decide on whether to start an Airbnb rental to meet the growing demand next year. And if you do go for it, where do you start looking? First, you need to answer the question, “Is there Airbnb demand in my area?”, and if there is none, you have to find which places are great for investing in an Airbnb business.
How to Determine Airbnb Demand
When choosing where to start your Airbnb investment, you need to make sure that you select a place that has a strong demand for alternative lodgings. The metric that you can use for this is Airbnb occupancy rate, which is the number of days that a property is booked over the total number of days that it is available for rent.
Determining Airbnb Demand by City
As cities reopen their economy, they naturally tend to attract more tourists. There might even be some business travelers as well. The patterns of business and leisure travel will indicate if there is a strong demand for Airbnbs and other short-term rentals.
To find out the demand for Airbnb in a city, neighborhood, or even a particular property, you need to use a tool like Mashvisor. We use real-time data taken directly from the Airbnb website to showcase accurate and up-to-date information for our users. For a list of the top 20 US cities with the strongest demand for Airbnb, feel free to skip to the next section.
When using Mashvisor to determine the demand in one city, just type in the city you are interested in. Then, activate the Airbnb demand map by toggling the heatmap dataset to display based on “Airbnb Occupancy Rate”. From there, you will have a quick overview of which areas in the city have low demand and which ones have at least 90% occupancy rates.
Determining Demand for Airbnbs at the Neighborhood Level
Savvy real estate investors know that getting the Airbnb highest demand cities is not enough information to use when making an informed decision. You need to zoom in on the neighborhood level as well since not every part of a city is an ideal lodging location for tourists or business travelers.
The traditional way to get the demand for Airbnbs in a neighborhood is by going out there and manually collecting Airbnb data, which can take a long time. But with the real estate technology that we have nowadays, you can collect all of the information that you need in 15 minutes.
Using Mashvisor, for example, just type in the neighborhood that you want to explore, or look for it in our heatmap. Aside from its occupancy rate, the neighborhood view will also display the following metrics:
- Median home price
- Price per square foot
- Airbnb cash on cash return
- Monthly Airbnb income
- Number of active Airbnb properties
- Optimal rental strategy (traditional or Airbnb)
You can also find historical rental income of active Airbnb properties in the area as well as links to their pages on the platform. Using this can help you further understand what makes this particular neighborhood perfect (or not good) for short-term rentals.
Determining Demand for Airbnbs in Each Property
When you have found the most in-demand Airbnb locations, it is time to find the property that you can turn into a rental investment. Just because these homes are in the same neighborhood does not automatically mean that they will earn the same amount of revenue. Your chances of getting bookings and earning income depend on the property type, amenities, and other factors.
Mashvisor can help you determine this as well. Aside from the selling price and the home’s characteristics, our property page contains an Airbnb calculator, which has the following data:
- Rental income
- Startup and monthly expenses
- Cash flow
- Cash on cash return
- Occupancy rate
You may notice that our AI has filled out most of the data. These amounts are based on comparable Airbnb properties in the area or costs that have standard pricing. You will be able to edit the numbers and even add custom expenses so you can get a more accurate projection.
After doing the calculations, scroll down and you will find our Investment Payback Table, which shows how much profit you will accumulate in the next 10 years. The numbers shown here are based on the amounts that you entered in the calculator. Based on this information, you can then decide on whether you want to buy this property or look elsewhere.
Click here to start looking for and analyzing the best investment properties in your city and neighborhood of choice.
Top 20 Cities With Highest Airbnb Demand
Our team at Mashvisor can understand how overwhelming it is to narrow down on the Airbnb highest demand cities without the proper data. So to get you started, below are the top 20 cities with the strongest demand for Airbnbs based on the data we collected on November 2021.
Note: Each city may have its own Airbnb regulations. Be sure to look them up before buying a property in that location.
#1: Sedona, AZ
- Airbnb Occupancy Rate: 81.70%
- Median Property Price: $1,145,177
- Average Price per Square Foot: $453
- Monthly Airbnb Rental Income: $7,049
- Airbnb Cash on Cash Return: 5.02%
- Airbnb Daily Rate: $234
#2: San Marino, CA
- Airbnb Occupancy Rate: 80.40%
- Median Property Price: $2,818,563
- Average Price per Square Foot: $936
- Monthly Airbnb Rental Income: $14,557
- Airbnb Cash on Cash Return: 2.62%
- Airbnb Daily Rate: $178
#3: Flagstaff, AZ
- Airbnb Occupancy Rate: 79.70%
- Median Property Price: $905,716
- Average Price per Square Foot: $390
- Monthly Airbnb Rental Income: $5,124
- Airbnb Cash on Cash Return: 4.65%
- Airbnb Daily Rate: $176
#4: Lancaster, PA
- Airbnb Occupancy Rate: 79.30%
- Median Property Price: $404,019
- Average Price per Square Foot: $198
- Monthly Airbnb Rental Income: $3,394
- Airbnb Cash on Cash Return: 5.47%
- Airbnb Daily Rate: $127
#5: Inglewood, CA
- Airbnb Occupancy Rate: 78.60%
- Median Property Price: $907,199
- Average Price per Square Foot: $519
- Monthly Airbnb Rental Income: $4,501
- Airbnb Cash on Cash Return: 3.61%
- Airbnb Daily Rate: $150
#6: Glendale, AZ
- Airbnb Occupancy Rate: 77.60%
- Median Property Price: $459,553
- Average Price per Square Foot: $245
- Monthly Airbnb Rental Income: $4,165
- Airbnb Cash on Cash Return: 6.65%
- Airbnb Daily Rate: $195
#7: Bloomfield, PA
- Airbnb Occupancy Rate: 77.30%
- Median Property Price: $283,771
- Monthly Airbnb Rental Income: $2,446
- Airbnb Cash on Cash Return: 5.36%
- Airbnb Daily Rate: $105
#8: Portland, ME
- Airbnb Occupancy Rate: 76.90%
- Median Property Price: $915,022
- Monthly Airbnb Rental Income: $5,256
- Airbnb Cash on Cash Return: 4.01%
- Airbnb Daily Rate: $228
#9: Milwaukie, OR
- Airbnb Occupancy Rate: 76.90%
- Median Property Price: $488,387
- Average Price per Square Foot: $334
- Monthly Airbnb Rental Income: $4,423
- Airbnb Cash on Cash Return: 5.99%
- Airbnb Daily Rate: $133
#10: Bar Harbor, ME
- Airbnb Occupancy Rate: 76.80%
- Median Property Price: $780,455
- Average Price per Square Foot: $377
- Monthly Airbnb Rental Income: $6,312
- Airbnb Cash on Cash Return: 5.65%
- Airbnb Daily Rate: $252
#11: Greensboro, NC
- Airbnb Occupancy Rate: 76.70%
- Median Property Price: $335,452
- Average Price per Square Foot: $178
- Monthly Airbnb Rental Income: $3,230
- Airbnb Cash on Cash Return: 6.53%
- Airbnb Daily Rate: $111
#12: Downtown Pittsburgh, PA
- Airbnb Occupancy Rate: 76.10%
- Median Property Price: $518,975
- Monthly Airbnb Rental Income: $2,966
- Airbnb Cash on Cash Return: 3.80%
- Airbnb Daily Rate: $129
#13: Torrance, CA
- Airbnb Occupancy Rate: 75.90%
- Median Property Price: $1,025,164
- Average Price per Square Foot: $673
- Monthly Airbnb Rental Income: $5,653
- Airbnb Cash on Cash Return: 3.18%
- Airbnb Daily Rate: $202
#14: Honolulu, HI
- Airbnb Occupancy Rate: 74.90%
- Median Property Price: $849,545
- Average Price per Square Foot: $872
- Monthly Airbnb Rental Income: $3,609
- Airbnb Cash on Cash Return: 3.75%
- Airbnb Daily Rate: $156
#15: Oklahoma City, OK
- Airbnb Occupancy Rate: 74.90%
- Median Property Price: $327,228
- Average Price per Square Foot: $156
- Monthly Airbnb Rental Income: $2,673
- Airbnb Cash on Cash Return: 5.84%
- Airbnb Daily Rate:$94
#16: Crescent City, CA
- Airbnb Occupancy Rate: 74.70%
- Median Property Price: $459,938
- Average Price per Square Foot: $270
- Monthly Airbnb Rental Income: $4,002
- Airbnb Cash on Cash Return: 6.01%
- Airbnb Daily Rate: $214
#17: Fairbanks, AK
- Airbnb Occupancy Rate: 74.70%
- Median Property Price: $322,129
- Average Price per Square Foot: $171
- Monthly Airbnb Rental Income: $3,277
- Airbnb Cash on Cash Return: 7.23%
- Airbnb Daily Rate: $131
#18: Bellingham, WA
- Airbnb Occupancy Rate: 74.60%
- Median Property Price: $570,450
- Average Price per Square Foot: $405
- Monthly Airbnb Rental Income: $3,919
- Airbnb Cash on Cash Return: 4.20%
- Airbnb Daily Rate: $143
#19: Encinitas, CA
- Airbnb Occupancy Rate: 74.30%
- Median Property Price: $1,888,826
- Average Price per Square Foot: $862
- Monthly Airbnb Rental Income: $8,221
- Airbnb Cash on Cash Return: 2.66%
- Airbnb Daily Rate: $283
#20: Kihei, HI
- Airbnb Occupancy Rate: 74.1%
- Median Property Price: $1,251,216
- Average Price per Square Foot: $1,052
- Monthly Airbnb Rental Income: $7,274
- Airbnb Cash on Cash Return: 4.56%
- Airbnb Daily Rate: $486
2022: An Optimistic Year for Airbnb and Property Investors
After more than a year-long slog, we are seeing positive signs of rising Airbnb demand and other trends that show people’s desire to travel. Even though business trips, which make up a majority of travel spending pre-pandemic, will take a while to recover, tourists are likely to make up for the dollars lost in the past year.
If you have been wanting to start your own Airbnb business, now is a great time to purchase your own property so you will be ready to accept bookings by next year. You can start your search with the top 20 cities that have the strongest demand for Airbnbs, which are:
- Sedona, AZ
- San Marino, CA
- Flagstaff, AZ
- Lancaster, PA
- Inglewood, CA
- Glendale, AZ
- Bloomfield, PA
- Portland, ME
- Milwaukie, OR
- Bar Harbor, ME
- Greensboro, NC
- Downtown Pittsburgh, PA
- Torrance, CA
- Honolulu, HI
- Oklahoma City, OK
- Crescent City, CA
- Fairbanks, AK
- Bellingham, WA
- Encinitas, CA
- Kihei, HI
Like we mentioned earlier, analyzing each city is not enough; you have to know the Airbnb demand at the neighborhood and property levels as well. You can accomplish this by using Mashvisor.
Our platform has been helping real estate investors like you find lucrative investment properties all over the US, whether you want to become a landlord or rent it out on Airbnb. To get access to our real estate investment tools, click here to sign up for a 7-day free trial of Mashvisor today, followed by 15% off for life.