Occupancy rate is a key metric used in short term rental property analysis. How frequently a vacation home is rented out affects both revenue and profit, making it a major factor for the success of a vacation rental business.
This article covers everything that Airbnb investors and hosts need to know about the occupancy rate: from what it is and how to calculate it, all the way to what is a good occupancy and what rates to expect in the US market this year.
Summer’s professional vacation rental property management services can help hosts not only maximize the occupancy rate of their rentals but also optimize overall performance. With pricing that starts at only 20% of revenue (excluding cleaning fees), Summer-managed properties outperform at least 95% of comparable listings, while investors earn passive income.
What Is Airbnb Occupancy Rate?
The Airbnb occupancy rate measures the share of time during which a vacation rental is rented out over a certain period, usually a month or a year. Occupancy is typically expressed as a percentage and is one of the most important and most widely used short term rental data points.
The occupancy rate can be used to analyze the performance of a single property and compare it to similar homes in the market. When buying an investment property to rent out on a short term basis, investors should look into the expected occupancy of the home, considering the average Airbnb occupancy rate in the city and the specifications of the property itself.
In addition, short term rental occupancy rate can be calculated for an entire market, such as a neighborhood, a city, or even a state. There are many factors that determine occupancy, and key among them is location. Thus, before purchasing a property, investors need to check out local data to know what to expect in the market.
When discussing the occupancy rate of Airbnb rentals and what it means for hosts, it’s important to consider a number of different metrics including:
- Occupancy rate: Strictly speaking, the occupancy rate measures the number of days for which a property is occupied over the total number of days in a month or in a year. For example, if an Airbnb listing was booked for 10 days in a month, the occupancy rate = 10/30 x 100% = 33%.
- Adjusted occupancy rate: This is a more precise metric, and that’s why it is more widely used in vacation rental analysis. The adjusted occupancy rate is the proportion of nights for which a property is rented out over the number of nights for which it is available for renting, excluding the blocked nights. We’ll use this metric for the rest of this article as it tells a more accurate story of how a certain city or a certain property performs compared to competitors. For instance, if the property from the example above was listed for renting for only 20 days in the month, the adjusted occupancy rate = 10/20 x 100% = 50%. You can see how different this is from the 33% occupancy calculated above.
- Vacancy rate: The vacancy rate is the opposite of the occupancy rate, showing the percentage of days for which a listing is not occupied in a certain period of time. For example, looking back at the property above, the vacancy rate = 20/30 x 100% = 67%.
Together, these metrics give a good idea of how well a listing is able to attract guests.
Why Are Airbnb Occupancy Rates Important?
The reason why the occupancy of an Airbnb rental property is so important is quite straightforward: Occupancy has a direct impact on the Airbnb income and the return on investment that this property is able to generate. In simple terms, the more guests a short term rental gets in a month, the more money the host is able to earn.
Together with the average daily rate (ADR), the Airbnb occupancy rate determines the monthly revenue of a vacation rental.
Let’s look at two properties: Both properties have an average nightly price of $300. Property A has an occupancy rate of 50% (booked for 15 days), while Property B has an occupancy rate of 67% (booked for 20 days) because of a superior marketing strategy.
Airbnb Income = ADR x Airbnb Occupancy Rate
Airbnb Income of Property A = $300 x 15 = $4,500
Airbnb Income of Property B = $300 x 20 = $6,000
Because of the higher occupancy rate, Host B makes $1,500 more per month, all else equal.
Moreover, the rental income is present in all profitability formulas in short term rental property investing, such as the cash flow, the cap rate, and the cash on cash return. The higher the income, the more profitable an investment property is. So, Host B generates a better ROI on their vacation rental.
In other words, hosts with better occupancy rates typically make more money than the rest. And the ultimate goal of any vacation rental owner is to earn as much as possible from their investment property.
How to Calculate Airbnb Occupancy Rate
Calculating the Airbnb occupancy rate of a property is done by using a relatively simple formula.
Airbnb Occupancy Rate Formula
To calculate the Airbnb occupancy rate of a rental, use the following formula:
Airbnb Occupancy Rate = Number of Booked Nights/Number of Available Nights x 100%
Airbnb Occupancy Rate Calculation: Step by Step
Here is how the step-by-step Airbnb occupancy rate calculation using the formula above looks like:
- Find the number of booked days: This information can be obtained from the booking calendar of the Airbnb listing or the host’s records.
- Figure out the number of available days: A well-maintained booking calendar should have this piece of information as well.
- Divide the number of booked days by the number of available days: The final step in calculating the occupancy of an Airbnb property is dividing the two numbers above and multiplying the product by 100 to get the occupancy rate as a percentage.
Let’s go through an example.
A property is made available for booking for 25 days in a month, and it gets rented out for 15 days in this particular month.
Airbnb Occupancy Rate = 15/25 x 100% = 60%
As you can see from the formula and the step-by-step calculation, coming up with the occupancy of a single property that you own and manage is an easy process. It entails using readily available Airbnb data and dividing two numbers.
However, occupancy rate calculations can get messy and time-consuming when it comes to analyzing an entire market, such as a city. In this case, you need to get the number of booked nights and the number of available nights on thousands of properties, and this information is not publicly available. Moreover, calculating all these numbers and their mean to get the average Airbnb occupancy rate requires many divisions and additions.
That’s why it’s important for hosts to get access to the best vacation rental data sources to compare and optimize the performance of their rentals.
How to Find Occupancy Rate on Airbnb
The Airbnb platform does not provide ready Airbnb occupancy rate data in a form that hosts and managers can use to check how their property performs compared to similar listings in the area. Importantly, the website does not have market-level data for investors to find profitable investment opportunities and ensure their property performs as expected.
Using the Insights tab on their Airbnb host account, owners can get the data they need to calculate their occupancy rate. These numbers include the blocked nights, the booked nights, the unbooked nights (which is the sum of the blocked nights and the available nights with no reservations), and the check-ins. The data covers the past 12 months. In this way, a host can calculate the occupancy of their property.
In addition, Airbnb shows some data on similar listings in the area, but this does not include a readily available occupancy rate. With additional calculations, owners can see how well their property is doing in terms of attracting guests and getting bookings.
What Is a Good Airbnb Occupancy Rate?
Generally speaking, a good Airbnb occupancy rate is 60% and above, but indeed the value depends on multiple factors.
The reason to define good occupancy as 60%+ is that according to AirDNA and Mashvisor, two of the most popular sources of short term rental data in the US market, the nationwide average Airbnb occupancy rate in 2024 is 55% and 57%, respectively. As a good host, you want to make sure that your listing performs better than the average Airbnb property in the US vacation rental market.
However, the truth of the matter is that this answer is very subjective. When deciding on what constitutes a good Airbnb occupancy for your rental, you need to look at the market averages as well as how this affects your revenue and profitability.
For example, having an occupancy rate of 50% in a location where the average is 30% is great. The average occupancy signifies a tough market with a lot of supply and/or little demand (though you should probably not invest in such a market to begin with).
Meanwhile, getting your Airbnb booked 60% of the time where the average host achieves 75% shows there’s something wrong with your vacation rental pricing strategy or marketing plan.
Another way to look at a good occupancy is to find the number that allows you to guarantee positive cash flow and maximize your revenue. Keep in mind that the revenue is the product of the occupancy rate and the ADR, so the best Airbnb occupancy rate is not necessarily the highest number possible, as it might lead to suboptimal income. If you lower your nightly pricing too much to boost occupancy, you might be leaving money on the table.
But in all cases, you should aim to achieve an occupancy rate of at least 50%. Alternatively, your property stays vacant for more than half the time while you still need to cover maintenance costs, HOA fees, and some utility bills.
Average Airbnb Occupancy Rates by City
When buying a vacation rental, investors should aim for the best short term rental markets, and one of the key characteristics of these top locations is an above-average occupancy rate.
To give you an idea of what range of occupancy rates you can expect in the US market in 2024, following are the top 10 highest and the top 10 lowest Airbnb occupancy rates by city.
10 Cities with the Highest Occupancy Rates
Based on AirDNA data, the highest Airbnb occupancy rate per city in 2024 is found in:
- Kauai, HI: 74.4%
- Oahu, HI: 73.4%
- Maui, HI: 72.4%
- DownEast and Acadia, ME: 67.7%
- Big Island, HI: 67.1%
- New York City, NY: 65.5%
- Denver, CO: 65.3%
- Anaheim, CA: 65.2%
- Boulder, CO: 64.3%
- Outer Banks, NC: 64.3%
The best occupancy rates that hosts can experience this year range between 64% and 74%, at the city level. Of course, these are just market averages, and individual properties are able to bring significantly better results.
One important Airbnb occupancy trend observed in the data above is that as many as four of the ten US cities with the highest rates are located in the State of Hawaii, which faces prohibitive short term rental laws and regulations. Thus, it’s worth taking a look at the top 10 cities for occupancy in 2024 in the Contiguous US.
10 Cities with the Highest Occupancy Rates Without Hawaii
According to vacation rental data from AirDNA, the following US cities - outside the State of Hawaii - have the best occupancy in 2024:
- DownEast and Acadia, ME: 67.7%
- New York City, NY: 65.5%
- Denver, CO: 65.3%
- Anaheim, CA: 65.2%
- Boulder, CO: 64.3%
- Outer Banks, NC: 64.3%
- San Diego, CA: 64.2%
- Sarasota, FL: 64.1%
- Lincoln City and Newport, OR: 64.0%
- Gatlinburg and Pigeon Forge, TN: 63.9%
In the Contiguous US, the highest occupancy rates range between 64% and 68%.
10 Cities with the Lowest Occupancy Rates
For beginner investors, it’s also important to be familiar with the markets that attract the worst Airbnb occupancy rate. It’s a good idea to stay away from these locations as they require exceptional marketing efforts to get a decent number of bookings and generate profit.
In 2024, the US markets that perform the worst in terms of occupancy, according to AirDNA, are:
- Oxford, MS: 34.9%
- Big Bear, CA: 39.6%
- Southbend, IN: 40.4%
- Texas East Area, TX: 41.4%
- College Station, TX: 41.8%
- Mississippi Area, MS: 42.1%
- Augusta, GA: 42.8%
- Pocono Mountains, PA: 43.2%
- California South Area, CA: 43.7%
- Louisiana Area, LA: 43.9%
So, the lowest average Airbnb occupancy rates by city are between 35% and 44%, which is pretty low. However, it is possible to achieve an occupancy rate of 50%, 60%, or even more in these locations as long as you choose your property carefully, manage it diligently, elevate the guest vacation rental experience, and market your rental exceptionally.
How to Increase Your Airbnb Occupancy Rate as a Host: 14 Tips
While the occupancy rate of a short term rental is largely determined by the location and the property itself, there are things that hosts can do to minimize vacancy and maximize occupancy.
Following are 14 strategies to improve the Airbnb occupancy rate of just about any vacation rental:
1. Choose the Best Market
First and foremost, it’s important to start with a top location that is well-suited for operating an Airbnb business. This means a city that features a well-established vacation rental market but is not oversaturated with listings. Focus on a place where Airbnb laws do not prohibit or severely limit such operations.
Keep in mind that the best Airbnb markets can be major cities, like Miami, FL, or small areas, such as Joshua Tree, CA.
Starting off on the right foot will make it much easier to achieve and maintain a good occupancy rate for your vacation rental.
2. Design and Furnish Your Vacation Rental Accordingly
Once you buy an investment property with a strong potential, you should pay attention to the interior design and furnishing. You should focus on classic interior design trends which also align well with the local market so that your rental doesn’t look obsolete in a few years. You need to provide enough furniture to offer a comfortable stay without going overboard by stuffing the space with too many items and wasting too much money. Similarly, in terms of decor, add a few extra touches to differentiate the experience you provide from competitors, but don’t clutter the property with unnecessary items.
If you don’t have previous experience with designing and furnishing a short term rental, Summer can help. We provide comprehensive, yet customizable services driven by the needs of the property and the preferences of the host. Pricing starts at only $10,000.
3. Add Airbnb Amenities
Amenities are a key factor that makes listings rank higher on Airbnb and that makes guests choose one property over another. Amenities, such as towels, pillows, linen, soap, and toilet paper are defined as essentials by Airbnb, and every rental needs to provide them.
However, there are dozens of extras that are not obligatory but can really boost your Airbnb occupancy rate. Furnished kitchens, swimming pools, hot tubs, fireplaces, and free parking are some of the most in-demand amenities on the Airbnb platform, but it’s also a good idea to do research on the top-performing listings in your market and check what extras they offer. Before deciding on any particular amenity, try to estimate if the required investment would be worth it, i.e., whether it will result in a significant increase in occupancy and daily rates.
After adding any new amenities to your Airbnb, it is equally important to make sure to include them in your photos, listing information, and property description. Potential guests cannot know what amenities you offer unless you clearly show them.
4. Set Up Dynamic Pricing
Applying a dynamic rental pricing strategy is another way to increase occupancy and maximize revenue. Dynamic pricing refers to conducting ongoing market analysis and adjusting your daily rates accordingly to account for changes in supply and demand, seasonality, and competitor listings.
For example, hosts can push rates up during the peak season to enhance revenue without having a negative impact on occupancy. Meanwhile, during the off season, they should lower prices to attract reservations without going below a level that brings positive cash flow and good ROI.
5. Provide Different Discounts
As part of your vacation rental pricing strategy, you can offer discounts for longer stays, bookings made way ahead, last-minute reservations, or repeat guests. You can also charge discounted rates for children or require only minimal pet fees.
All these deals will make potential guests feel special and choose your listing instead of similar listings that do not provide discounts. This, in turn, will help you get more bookings.
6. Avoid Unnecessary Fees
Cleaning fees, pet fees, and extra guest fees are standard in the short term rental industry. However, some hosts and property managers overdo it by setting up a range of additional costs that might reach hundreds of dollars per stay. This is something guaranteed to push guests away and result in negative reviews.
So, if you want to optimize occupancy, include only the fees that are absolutely necessary for the efficient management of your property up to industry standards in terms of hygiene, maintenance, and positive experiences.
7. Optimize Your Listing for Airbnb SEO and Guests
As part of your efforts to boost occupancy, you should work on the optimization of your listing on Airbnb and other platforms where you market your property. There are many factors that go into the Airbnb SEO algorithm, such as catchy titles, detailed descriptions, multiple high-resolution photos, amenities, many 5-star reviews, keywords, and pricing.
Work on each of these elements in a way that not only helps rank your listing higher in searches on Airbnb but is also attractive to guests and makes them want to book your property.
8. Offer an Airbnb Experience
When booking a short term rental, many guests look not simply for a place to stay but also for a unique experience to enjoy, and you can capitalize on this to raise your occupancy rate. Cooking classes, wine tastings, historical tours, and introductions to local cuisine are just some of the Airbnb experiences you can provide for guests to attract more reservations and more positive reviews.
To choose the best experiences, you can check out what other local hosts are offering and try to offer something better and more exciting. Make sure to include the available experiences in your Airbnb listing.
9. Get Positive Guest Reviews
The overall rating of your listing and the total number of guest reviews are crucial factors for getting more reservations. This means that you should actively work on obtaining 5-star reviews from your guests. In addition to providing exceptional service and unique experiences, you have to actually ask guests to write a review after the end of their stay. You can follow up with a simple message a couple of days after they check out to confirm how everything was and ask if they would be willing to review your property. You can automate the communication process with software like the Evolve property management tools for more efficient management.
Having many 5-star reviews will help your listing rank higher and also convert more guests.
10. Use Instant Book
Another simple thing to do to increase your Airbnb occupancy rate is to turn on the Instant Book feature on the Airbnb platform. This means that some bookings will be automatically approved, without your intervention, as long as guests meet certain requirements that you determine.
This is a straightforward way to get some last-minute reservations to push up the total number of bookings in a month.
11. Become an Airbnb Superhost
While optimizing all other aspects of your short term rental property and listing, you should work on getting an Airbnb Superhost status. This requires meeting certain standards, such as hosting 10+ trips for a total of 100+ nights, maintaining a 90%+ response rate, and having a 4.8+ rating.
Airbnb Superhost listings are prioritized by the Airbnb algorithm, and guests are more likely to book with a Superhost as they have proven consistently excellent guest experiences.
12. Maintain Your Property in Top Shape
You have to put efforts into keeping your rental in a good state, which includes both addressing emergency repairs in a timely manner and practicing preventive maintenance works. A well-maintained home is the only way to ensure that your listing photos and your actual property match and that guests feel safe and comfortable during their stay.
Your efforts will be rewarded with positive reviews, leading to more bookings in the future.
13. Advertise Your Rental Beyond Airbnb
While Airbnb is the most popular vacation rental listing platform, with more than 448 million nights and experiences booked per year, there are other effective ways to market your property too. You can list it on additional websites, like Vrbo and Booking.com, and you can also advertise it on social media, via email marketing, and using paid ads. Social media is a particularly good option for short term rental marketing as it provides access to a wide audience while posting for free.
The more eyes that lay on your listing, the more bookings you will get.
14. Consider Professional Property Management
Finally, if you don’t have the time or the skills to work on optimizing your property and your listing or if you want to invest in real estate for passive income, you can hire one of the best Airbnb property management companies to take care of your second home. While you will need to pay a monthly fee, your rental will be actively managed to ensure maximized Airbnb occupancy rate and revenue via dynamic pricing, professional hospitality services, and continuous communication with guests.
Summer is a full-service vacation rental property manager that provides everything, from getting a property ready for guests, through listing and upkeep, all the way to maintenance. The company is very selective about the properties it manages based on its ability to operate a specific home with the expected level of excellence. This results in a smaller portfolio of very valuable homes that consistently outperform both host and guest expectations. Owing to the best-in-class services provided by the Airbnb manager, Summer-managed properties perform better than at least 95% of comparable rentals in the market.
The Bottom Line
The Airbnb occupancy rate determines the success of a vacation rental property business. There are many things that hosts can do to boost this metric, from buying a property in a top market to optimizing their listing and maintaining their rental in top shape. Alternatively, they can hire a reputable short term rental property management company to earn passive income as the result of a good occupancy rate and optimal daily rates.
