Sustainability in short-term rentals

As new profiles of visitors look for longer, low season stays and immersive experiences with more local interaction in new destinations, short-term rentals have gained unprecedented relevance as a tool to attract this new type of sustainable traveler. However, the success of the industry also poses a risk to destinations; if a careful balance is not managed across social, economic and environmental aspects of sustainability in short-term rentals.

This Lighthouse report aims to provide data insight into STR destination impact worldwide based on these three facets of tourism sustainability. We hope to demonstrate the potential of short-term rentals as a strategic element in enhancing symbiosis between tourism and local communities, and the power of data in highlighting the strategic opportunities for management. We cover:

Social sustainability

• Supply growth

• Inventory density

• Active inventory

Environmental sustainability

• Sustainability initiatives

• Engagement vs hotels

• Travel contribution

• Emissions

Economic sustainability

• Seasonality

Click on the topics to view – we discuss inventory density, short-term rental and hotel environmental initiative engagement and seasonality below – or you can click to view the full PDF report here.

How density indicates STR social sustainability

In our first focus topic we take our understanding of supply to the next level by thinking in terms of density. Density basically relates to the social aspect of sustainability. High concentrations of short-term rentals can result in impact to residential availability or affordability if unmonitored or managed. Although it is worth noting that population numbers are from varying years, and that geographical boundaries will vary between population and property count areas, the chart presents an idea of how many citizens reside in a city for every short-term rental listed.

Where the number is high, we see a lower density of short-term rental properties in the destination, and in theory a higher ratio of residential properties.

Unregulated US destinations where short-term rentals are as dense as 1 per 200 citizens or less, are more likely to encounter social sustainability issues such as residential availability or affordability.

There is a correlation between lower density and higher relative growth destinations. Destinations not following this trend include New York, where growth is hampered by regulation. Furthermore, London, Phoenix and Athens show high growth despite high density. Accordingly, these should be the cities most concerned about social sustainability. For supply growth and active inventory you can click to view the full report.

Hotel engagement with sustainability initiatives higher

Secondly, we discuss one of our environmental sustainability analyses. Almost 2 years ago, Booking.com launched their sustainable travel initiative, complete with badges for participating listings. When comparing booking.com hotel listing uptake with that of short-term rentals listed on the platform, the contrast is stark.

Hotel sustainability engagement is 46% higher. While sustainable practice is consolidated and often regulated in hotels, this shows the scope of opportunity within short-term rentals.

On average, 46% more of hotels are registered as sustainable. Riyadh demonstrates the smallest disparity, with 18% of short-term rentals and 38% of hotels signed up. On the other hand, while 82% of Tokyo hotels are enrolled, just 11% of short-term rentals are. 

Sustainable practice is consolidated and often regulated in hotels, but it shows the scope of opportunity within short-term rentals. You can check out engagement by city and also our emissions estimation analysis in the full, free PDF.

Impact of seasonal revenue

Seasonality dictates the economic ebb and flow of tourism and the impact to local businesses. Moreover, this impacts the final aspect of sustainability, as it pertains to destinations – economic.

The chart shows the monthly proportion of guests travelling in more extreme cities – click for the full, interactive chart. Inferring revenue shows that tourism in ‘seasonless’ Bogotá and Quito is much more economically sustainable than Quebec and Athens for example.

Athens sees 71% of visits May-October. Only 29% of short-term rental guest-related revenue coming in the remaining 6 months of the year is a significant factor in economic sustainability.

Below is a table of standard deviation in monthly percentage of guests – higher deviation means a greater degree of seasonality. So, how economically sustainable is your destination?

To explore the full range of topics related to sustainability in short-term rentals, access the full Lighthouse PDF report down below.