Funding to the short-term rental space is cooling dramatically in line with the rest of the travel industry, but has stayed more resilient in comparison to other travel categories.
An analysis of Phocuswright’s Travel Startups Interactive Database reveals that when comparing 2022 through the third quarter of 2023 to the past 10 years, the STR category has clearly been one of the strongest verticals across both time periods.
That said, while there are typically multiple $100 million-dollar-plus funding rounds that occur in the short-term rental space in a given year, 2023 featured only one, when property management company Hostmaker raised $175 million in private equity in May.
Economic uncertainty is increasingly a reason for cautiousness, in addition to the restrictive factors outlined in this report.
Yet 2023 was another record year for Airbnb on the wave of persistent demand, indicating a resilient market for what is still an emergent product with plenty of room for growth.
In the coming years, STRs will continue to attract investment, reach new audiences, implement new technologies and provide an increasingly high-quality guest experience on par with hotels on the path to mainstream travel adoption.
Interested in shaping Phocuswright’s next STR research project?
The upcoming U.S. Short-Term Rentals Special Project will focus on research objectives in both B2B and B2C areas, exploring consumer preferences and perceptions, drivers of satisfaction, key trends, market sizing, growth patterns, tech adoption, inventory and more. Project sponsors get a wealth of benefits beyond the data and thought-leadership.