In a rapidly evolving tourism landscape, the interplay between unprecedented post-pandemic growth and the strains on local communities has never been more evident.
This report provides a comprehensive analysis of current trends - from the resurgence in travel numbers to the escalating challenges of overtourism - and the critical need for robust, collaborative solutions.
The data clearly indicates that, while the allure of travel remains undiminished, the infrastructure and social fabric of our destinations are under increasing pressure. As consultants, we recognise that success in this sector depends not merely on seizing revenue opportunities, but equally on safeguarding the long-term sustainability of the communities we serve.
Key to this endeavour is a balanced approach: legislative frameworks must be enforced effectively, and destination management organisations need to be central in orchestrating the interests of diverse stakeholders.
This discussion underscores the imperative for strategic, tailored interventions that not only stimulate growth but also preserve the cultural and infrastructural integrity of our cities.
Executive Summary
The STR market has experienced a significant boom in the last two decades due to the rise of online booking providers and the increased digitalisation of the tourism value chain. These platforms have simplified the process of offering accommodation services, leading to a surge in the popularity of STRs.
This report comes at a critical time when many popular tourism destinations across Europe face challenges directly caused by the proliferation of STRs. These challenges span environmental, social and governance domains. Popular tourism hotspots in cities lose their local population, diminishing their attractiveness.
Also, the space in residential areas is increasingly occupied by STRs, leading to unchecked real estate growth and the proliferation of the grey economy. From an environmental perspective, the high pressure of tourists during certain times of the year makes it difficult to maintain infrastructural necessities and deliver essential services like water and power.
Consequently, many countries and cities are at a crossroads, with some already implementing limitations on new (and existing) STR licenses. This analysis aims to provide an understanding of the robustness of the STR market on the European level and highlight destinations experiencing high growth. It also underscores the necessity of regulating the overall STR market to effectively address the associated challenges.
At the country level, the financial performance of the STR market showed growth across all indicators. Gross revenue surged from EUR 11.8 billion in 2019 to EUR 20.3 billion in 2023, marking a 72% increase. This growth was driven by a 58% increase in revenue per available listing (RevPAL) and a 51% increase in the average daily rate (ADR).
The five largest markets - France, the UK, Italy, Spain, and Germany - collectively accounted for 74% of the total STR revenue in 2023 in Europe. When it comes to ADR, Switzerland, the UK, Ireland, the Netherlands, and Slovenia, exhibited the highest rates. In terms of supply, France led with 2.67 million available beds, nearly double the STR accommodation capacity of second place Italy.
On the demand side, the European STR market saw a 20% growth in the number of overnight stays, totalling more than 167 million booked nights in 2023. The top five countries—France, Italy, Spain, the UK, and Germany—accounted for 70% of these overnights, indicating a high concentration of demand. Despite an overall increase in occupancy rates between 2019 and 2023, average occupancy in 2023 did not surpass 2022 figures.
This was anticipated, considering the higher number of reactivated listings in 2023 compared to the number of STRs in 2022, resulting in slightly lower occupancy rates.
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