The latest occupancy rates for February 2020 achieved by MadeComfy properties have revealed strong resilience in the demand for short-term rental (STR) accommodation, despite recent devastating bushfires over the 2019 and 2020 Summer period and international travel bans resulting from the Novel Coronavirus COVID-19.
MadeComfy properties located in Sydney and Melbourne in particular remained popular with short-term accommodation guests, finishing the month of February 2020 with strong occupancy rates above historical benchmarks for each city. In this article, we break down the latest performance results in these two key markets and discover why many professionally managed Airbnb rentals will continue to perform strongly in 2020.
- MadeComfy average occupancy rates for Sydney, February 2020: 81%
- MadeComfy average occupancy rates for Melbourne, February 2020: 79%
(note: average occupancy rates exclude recently onboarded properties within the first 60-90 days, as these listings will not include forward bookings from previous months that otherwise contribute to a property's occupancy rate).
There are a number of reasons why MadeComfy short-term rentals have maintained high occupancy rates within a challenging travel market.
Firstly, in order to maximise overall listing revenue, MadeComfy's pricing and revenue team monitors market trends and dynamically adjusts average nightly rates based on expected supply and demand. In response to changing market dynamics, Average Daily Rates (ADR) for Melbourne and Sydney properties decreased by 9% in February 2020 compared to the same period in 2019.
Secondly, there are several characteristics of the Australian STR and Airbnb market which have insulated MadeComfy's property performance from the effects of recent travel trends, as detailed below:
The majority of MadeComfy guests are domestic travellers
As analysed in a previous blog post of Airbnb guest origins, the majority of MadeComfy short-term rental guests are domestic Australian travellers, with just 3% of total travellers originating from China in 2019.
While Chinese travellers were the top inbound country origin and a recent drop in arrivals has had a significant impact on the wider tourism industry, this market has generally been concentrated among organised tour groups booking commercial hotels for accommodation, as opposed to using Airbnb.
The strength of the Australian domestic guest market should contribute to the STR market's resilience over the next few months, as more Australians choose to holiday within the country instead of going overseas. A very low Australian dollar which has made the cost of overseas travel relatively more expensive has also assisted the local tourism market.
Australian hotel occupancy rates have remained elevated compared to other APAC markets
According the latest hotel occupancy analysis by STR Group, the Australian accommodation market has posted surprisingly strong results in the first six weeks of the year, and was the only market in APAC apart from Indonesia (ex Bali) to show positive weekly growth from the start of the year to mid-February.
In contrast to the growth in hotel occupancy rates in Australia, other major Asian destinations posted significant declines for the same period due to regional concerns from the COVID-19 virus:
- Hong Kong -64%
- Singapore -45%
- Taiwan -59%
- Australia +11%
Flexible uses for STR properties
Finally, the popularity of short-term rental properties over hotels will continue to be seen as more guests have shown growing preference for the advantages of short-term rental spaces, eg amenities such as full kitchens and separate living areas - which are useful for longer term stays outside of the traditional tourism market.
In addition to international and domestic travel guests, MadeComfy properties are increasingly used in a variety of flexible accommodation uses largely unaffected by recent events, such as:
- Travel for work, and use by corporate guests
- Temporary accommodation for people moving between homes
- Short-term accommodation for new residents in Australia or a new city, to base themselves while they find a permanent lease.
Find out more about the short-term rental market in your area
Ask an Airbnb expert: want more information about short-term rental in Australia? Submit your question to the MadeComfy team below.
Featured image: Tourism Australia