Ellicottville Rental Market Update – December 2022

Ellicottville Rental Market Update – December 2022

We take a look at the rental market in Ellicottville using AirDna data.  AirDna.co is a website that uses a combination of accumulated data and AI to estimate future and historic rental income from short term rental properties.  CBRE, the top US Commercial Real Estate firm, found AirDna to be 96.2% accurate in predicting revenue.

In this round up, we will look at occupancy, supply, revenue and total market size for December 2022 and compare that to December 2021.

We will look at the market as a whole (all accommodation types and bedroom numbers) which gives a good idea of the general strength of the market.  We will then look at homes with 5 or more bedrooms as these are more relevant to our project at 42 Degrees North.  However, nothing in this document should be taken as a forecast of revenue or any type of promise of future revenue potential.

 

Rental Supply

The trend across the short term rental landscape is increasing inventory.  The strong performance of short term rentals has naturally led to more players wanting to enter the game.

That trend has also been seen in the Ellicottville rental market.

In Dec 2021, there were a total of 320 active listings.  There were 59 homes of 5 or more bedrooms.

 

In December 2022, the total active listings had increased to 388.  That was an increase of 21%.  Supply of homes of 5 bedrooms or more, increased from 59 to 74.  That was an increase of 25%.

Rental Occupancy

Occupancy for all bedrooms was 53% in December 2021

Despite the increase in total rental units, occupancy increased slightly from 53% to 56%.

 

Occupancy for Homes of 5 Bedrooms or More

The occupancy rate for homes of 5 bedrooms or more was 58% in 2021

 

Occupancy for December 2022 for 5 or more bedroom homes in Ellicotttville also saw a minor increase.  The occupancy rate in December 2022 was 60% compared to 58% in December 2021.  This was despite the 25% rise in inventory.

Rental Occupancy for 6 Bedrooms or more

Occupancy for December 2021 for 6+ Bedroom units in Ellicottville was 64%

In December 2022, that occupancy increased to 76%

Rental Rates

In December 2021, the Average Daily Rate (ADR) was $563.  This number was across all bedrooms.

In December 2022, that number increased slightly.  ADR was $588 which represented a 4.4% annual increase.

 

Rental Rates for 5 Bedrooms or More

ADR for 5 or more bedrooms in December 2021 was $935.

ADR for 5 or more bedrooms in 2022 was $1023.  That was an increase of 9.4%.  That increase is especially impressive as it came despite a 25% increase in inventory.  It also makes the increased occupancy more impressive since it did not come as a result of rate cutting.

Rental Revenues

Average Rental Revenues All Bedrooms

Below are the average rental revenues for December 2021.  AirDna divides the revenue category in to percentiles so that you can see how the best performers stack up against each other as well as those performing less well.

The total rental revenues for December 2022 are pretty staggering by comparison.

The 25^th percentile jumped from $2.5k for the month to $5.4k per month.  The 50^th percentile increased from $5.1k to $10.6k.  The 75^th percentile increased from $8.3k to $18.4k and the 90^th percentile increased from $14.4k to $32.5k.

On the face of it, this doesn’t make sense.  Rates increased by 4.4% and occupancy increased from 53% to 56%.  And yet, average monthly revenues more than doubled in each category.

Before explaining how this likely happened, it is important to note that we are not affiliated with AirDna in any way except as a user of their services.  As a result, we don’t know exactly how they make their calculations.  However, we do have extensive experience in the short term rental business so we can make some educated guesses.

The first thing to understand is how occupancy is calculated.  Occupancy is calculated by dividing the number of booked nights by the number of available nights.  It is the number of booked nights that is important and not the available nights.

For example:

A homeowner could have a property that they make available for 10 days in the month.  If it rents at the average occupancy rate of 53% in December 2021 and the average rate of $563, that gives revenue for the month of $2984 (10 x 53% x $563).  If the same 10 days are available in December 2022 and rented at a 56% occupancy rate and ADR of $588, the revenue for the month is $3265.  That is a nice increase of 9.4%, but obviously it’s nowhere near the more than 100% revenue increases we saw.

By contrast, let’s look at the numbers if the homeowner makes the home available for the full 31 days of the month.  At the same December 2022 occupancy and ADR rates, the monthly revenue would be $10,208 (31 x 56% x $588).  That’s more than triple the December 2021 number.

Again, we can’t know for sure that this is what happened, but it is the most likely explanation.  And you can see why owners would increase their available nights as their revenues grow.  Maybe they decide to make it available for an extra ten days and use the money to go down south for example.

Now a quick look at the 5 and more bedroom average revenue:

Average Rental Revenues 5 or more Bedrooms

December 2021 average rental revenue:

December 2022 average rental revenue:

Revenues for homes of 5 bedrooms or more mostly mirrored those for all bedrooms.  Those in the 25^th percentile rose from $7.7k to $14.9k.  The 50^th percentile rose from $11k to $25.3k.  The 75^th percentile rose from $18k to $42k and the 90^th percentile rose from $29.9k to $58.5k

 

Total Market Revenue

Total market revenue for December 2021 was approximately $1.98m.  The total market revenue for December 2022 was approximately $5.4m.

 

airbnb in ellicottville ellicottville 5 bedrooms ellicottville chalet ellicottville cottage ellicottville home for rent Ellicottville Real Estate ellicottville rental ellicottville rental market