Is Investing in Hotels a Better Move Than Scaling Short-Term Rentals?

BiggerPockets Daily

Pre-pandemic, short-term rentals (STRs) seemed to answer burned-out landlords’ prayers. Guests paid their money upfront, eliminating the need to evict, and homeowners could use their personal residences to earn extra income should they wish to travel or rent out individual rooms.

The hotel industry quaked and pressured cities to introduce restrictions. However, STR fever was rampant. Soon, entire apartment buildings were dedicated to the vacation rental phenomenon. Everyone with a granny flat, RV, and spare room seemed to be competing for STR dollars. Would it last? Were hotels over?

Inevitably, some markets became saturated, and the narrative about short-term rentals changed amongst investors. Post-pandemic, the number of vacation homes in the U.S. increased by 23.3% from October 2021-2022. That spring, at the height of the STR booking season, 80,000-88,000 new short-term rentals were added to the market monthly.

Bookings dropped, and landlords fretted. Hoteliers breathed a sigh of relief.

After a shaky couple of years due in part to the economic downturn, the short-term rental business is expected to grow at a stable pace. Equally, the hotel business in the U.S. is predicted to exhibit an annual growth of 3.8% (CAGR 2024-2029), with a projected market volume of $133.3 billion by 2029.

Keep reading the article here: https://www.biggerpockets.com/blog/is-investing-in-hotels-a-better-move-than-scaling-short-term-rentals

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