Hotels in the United States are having a rough time, according to the National Association of Realtors
Hotels are struggling to fill the gap left by a shrinking number of vacation rentals, and the rental market may be heading for a rough patch, according a new report from the National Alliance of Realty.
The association, which represents more than 100,000 commercial and nonprofit real estate agents and brokers, said the number of rental properties in the U.S. declined to 7.2 million in 2017, down from 9.9 million in 2016.
The number of rentals for single-family homes rose to 6.2 percent, down slightly from 7.3 percent in 2016, according the report released Monday.
The decrease is attributed in part to fewer hotel stays.
The National Association says the vacancy rate in rental properties declined to 6 percent from 8.1 percent in 2017.
But it also noted that the vacancy rates in single-detached houses declined to 4.7 percent from 5.8 percent.
In the luxury hotel segment, the occupancy rate fell to 5.9 percent from 6.1 in 2017 and the occupancy percentage of non-residents to 14.7 from 15.3 in 2016 and 14.3 from 15 percent in 2015.
That suggests that many hotel owners are not filling rooms as fast as they could, the report said.
“With so many hotels in the market, it makes sense for hotel occupancy to be a drag on the market,” said Michael Pecher, the National Assoc.
for Realtiers president.
“There’s a lot of inventory and not enough demand to go around.”
The shortage of hotels is partly due to the impact of the Zika virus, which has forced many U. S. travelers to stay home for a few weeks and caused hotel occupancy rates to drop.
But the real estate industry has also seen a drop in rentals in recent years.
That is because more people are traveling and staying longer in the summer months, which makes the vacancy market more difficult to fill.
In 2018, the number on vacation rentals was down 7.6 percent compared with 2016, when there were 1.6 million vacation rentals.
And the number renting homes was down 6.3 per cent compared with 2015, when it was 7.5 million rentals.
“Hotels are trying to compete for the holiday season and are struggling with the shortage of vacation rental properties,” Pecer said.
But he said he doesn’t expect that trend to continue.
“While there is a lot more inventory than last year, it is not enough to support the occupancy rates of existing hotels,” he said.
While the occupancy data doesn’t show an improvement, Pecers said he thinks the number is not quite as bad as he thinks it will be.
“I think there is definitely a lot to be concerned about,” he added.
“This is not a new problem, and I think it’s going to be more challenging to fill that void as demand increases.”
In addition to the drop in vacation rentals and occupancy rates, the NAR found that fewer homebuyers are moving into the market because of concerns about the economy and affordability.
In 2016, there were more than 12 million homebuyer applications for homes in the rental space, according this data from the Federal Housing Administration.
That number is down to about 6.6 of them.
The NAR says the rental vacancy rate is 5.5 percent, which is the lowest in more than a decade.