Short term rental regulations are on the rise around the globe. Likely attributed to the surge in popularity the accommodation sector has received in recent years, we’ve witnessed a string of destinations bring in new rules:
- New York implemented a state-wide law — the Multiple Dwelling Law — to hinder the renting of non-hotel/temporary residence buildings for fewer than 30 consecutive days
- Paris cracked down on non-registered Airbnb hosts
- Portugal banned new Airbnb licenses and ended its ‘Golden Visa’, which allowed non-EU nationals to invest in real estate
- Lisbon introduced ‘containment’ zones to avoid oversaturation
- And, most recently, the UK Government proposed the introduction of new permission requirements.
Why is the short term rental sector receiving so much pushback? In some cases, oversaturation has had negative impacts on local communities. For example, in Portugal, the Golden Visa scheme led to rising house prices in an area where residents were already suffering from the cost of living crisis. The goal of its regulations is to protect the residents who live full-time in the community.
How Do Short Term Rental Regulations Affect Businesses?
The impact of short term rental regulations will be different depending on the city or state. How property managers adapt in one destination may not be the winning formula in another. For example, some locations will be subject to higher tax rates, so property managers and hosts may adjust average daily rates (ADRs) accordingly. In areas where new regulations are coming into play, those with existing properties may benefit from limited supply, enabling them to increase their prices.
For investors, regulations can make it very difficult to navigate new business decisions. This is especially true when they don’t know where new regulations may be introduced. Supply increases could indicate destinations that are becoming oversaturated, and therefore local governments may consider new regulations in the future to minimize the impact of short term rentals.
With this in mind, we’ve pulled together a list of locations, based on increasing supply, to help with those all-important rental projections and strategies. Based on scraped short term rental market data as of March 29, these are the areas (with more than 200 active properties) witnessing the highest levels of new supply in 2023.
1. Kimberling City, Missouri
Jumping from 136 properties to 254 (an 87% year-over-year increase between 2021 and 2022) to 364 (rising a further 43% in 2023), Kimberling City in Missouri takes the top spot for the largest increase in available properties in the U.S. so far this year.
2. Knoxville, Tennessee
With available 2023 properties rising by 40% (to 365) as of March 29, Knoxville, Tennessee, takes second place for U.S. destinations seeing the largest increases in supply.
3. Copper Mountain, Colorado
America’s third location for new available properties is Copper Mountain in Colorado. The ski destination has upped its short term rental supply by 34% (from 1,054 to 1,417 properties).
4. Glendale, Arizona
As of March 29, Glendale, Arizona boasted 1,027 short term rental properties (up a quarter from 2022 levels).
5. Sherman Oaks, California
Sherman Oaks, California, takes the fifth spot, gaining an additional 118 properties in 2023 (+23% increase year-over-year).
U.K. and Europe
Supply increases in the U.K. and across Europe have been less drastic than those witnessed in the U.S.
The U.K., in particular, shows some of the lowest percentage increases for new available properties — possibly as a result of uncertainty caused by pending regulations, with the top five destinations rising by 9% (North East Lincolnshire, England), 3% (Down, Northern Ireland and Ards, Northern Ireland), and 2% (Merthyr Tydfil, Wales and Eilean Siar, Scotland).
Europe hasn’t fared much better, with its top five destinations for rising supply being led once again by North East Lincolnshire, England, followed by Vir, Croatia (+7%), East Mani, Greece (+6%), Constanta, Romania (+6%), and Icaria, Greece (+6%).
Based on scraped data of increasing short term rental supply in destinations with over 500 active properties in 2023, these are the locations to keep an eye on…
- Copper Mountain, Colorado — 1,417 available properties
- Glendale, Arizona — 1,027 available properties
- Sherman Oaks, California — 636 available properties
- Wollongong — 906 available properties
- Seminole, Florida — 521 available properties
It’s important for investors, property managers, and hosts to consider this data alongside a range of other key performance indicators (KPIs) when assessing the profitability or investment potential of a destination, as well as what the area offers travelers and why people visit.
Are you looking to invest in a new destination and want to know what its market supply suggests about future short term rental regulations? Trial a demo of our data benchmarking platform, which provides in-depth destination analysis and insights for those in the industry.