Tourism Impact on Rental Demand in Popular Destinations

Tourism impacts more industries than you may think–travel, retail, transportation, restaurants, shopping, entertainment, and more. It also majorly impacts the rental industry, especially vacation rental properties. When more people travel to a city or major destination, the demand for short-term rentals in that area goes up. Conversely, there are some periods when tourism isn’t driving demand. Today, we’ll review the tourism impact on rental demand and some of the top places for tourists in the US.  

Key Takeaways 

• Tourism significantly boosts rental demand in popular destinations, driving interest in short-term rental properties. 
• Seasonal fluctuations influence occupancy rates and pricing strategies for rental investors in tourist-heavy areas. 
• Investing in rental properties in major tourist hubs like New York City, Washington, DC, and Boston can offer lucrative opportunities due to steady visitor traffic and cultural attractions. 

How Does Tourism Impact Rental Demand? 

Where do you tend to stay when you go on a trip somewhere? While hotels used to be the popular (or the only) choice, many people these days decide to stay in short-term rental homes. Whether you use Airbnb, VRBO, or another site, you can usually find a home to stay in wherever you choose to travel.  

On the other hand, if you’re a rental investor, have you ever thought about buying short-term rentals and marketing them in popular tourist destinations? The tourism impact on rental demand might have you seriously considering it. It’s important for rental owners and rental property management in Boston to keep up with these trends, as they can significantly impact your business. Here are a few reasons why.  

• High Demand for Short-Term Rentals
• Seasonal Fluctuations
• Economic Growth and Development

High Demand for Short-Term Rentals 

Popular tourist destinations generally see higher demand and occupancy rates in short-term rentals. This is especially true during peak travel seasons, usually May through September. If you’re considering investing in a rental property in an area popular with tourists, you may want to consider a short-term lease strategy. Short-term rentals also offer more potential for revenue, as you can charge nightly rates instead of fixed rates with a long-term lease.  

Seasonal Fluctuations 

While rental demand may be high during peak tourist seasons, it can fluctuate quite a bit. Peak season means more demand, but you may see reduced occupancy during off-seasons. However, just like demand fluctuates, you can also adjust your prices based on the season. So, during peak seasons, you may increase your prices; during off seasons, you may lower your prices to meet the demand. 

Economic Growth 

Tourism impacts several industries, and they can all benefit one another. For instance, tourism can lead to the development of better infrastructure and amenities, making the area more attractive for both tourists and long-term residents. Additionally, it can boost the local economy. In turn, a thriving economy can bring more people to the area, increasing long-term rental demand.  

Popular US Tourist Destinations 

The tourism impact on rental demand can lead investors to change their strategies. That said, if you’re looking to invest in real estate this year, you may want to consider buying a property in a popular tourist destination. Here are some of the top areas tourists are visiting in 2024.  

1. New York City
2. San Francisco
3. Washington, DC
4. Seattle
5. Las Vegas
6. Chicago
7. Boston

New York City 

New York City has been a tourist destination for years on end. This bustling city attracts millions of visitors annually for several reasons, including popular landmarks, museums, and shopping opportunities. It’s also known for amazing cultural experiences, a diverse culinary scene, and so much more. Here, you’ll find the Statue of Liberty and the Empire State Building, which are huge attractions alone. Owning a rental property in this busy city can be an excellent opportunity for investors.  

San Francisco 

Another major city that attracts tourists in the US is San Francisco. This city also offers diverse cultural experiences, unique historic attractions, and popular landmarks like the Golden Gate Bridge. One unique thing about this city is that with a warmer climate, tourists visit here year-round. So, if you want to buy a rental property that will bring in steady demand, a place like San Francisco can provide that.  

Washington, DC 

The nation’s capital, Washington, DC, has several attractions, making it a popular tourist destination. After all, this is where the White House and US Capitol are located. Additionally, you’ll find several iconic historical landmarks, like the Lincoln Memorial and the Washington Monument here! Aside from these exciting sites and landmarks, annual events like the Cherry Blossom Festival also bring in tourists in the Spring. If you’re thinking of investing in rental properties, DC could be a highly profitable area.  

Seattle 

While you may immediately think of rain when you think of Seattle, they have much more than that. Many tourists come here to see landmarks like the Space Needle and Pike Place Market. But first, most of them grab a cup of coffee! After all, Seattle is known as a world center for coffee roasting, so you can easily find a coffeehouse here and enjoy a cup before sightseeing. Tourism is popular here during the summer, so keep that in mind if you want to buy a short-term rental here.  

Las Vegas 

While New York City may be crowned as “the city that never sleeps”, Las Vegas has to be a close second. You rarely hear about anyone living here. However, everyone knows Las Vegas is a popular place for tourists to flock. Whether you walk the Strip or gamble at one of their many iconic casinos, you’ll never be bored in this high-energy city. Owning a short-term rental property here could be highly profitable during the spring and fall seasons, as that’s when most tourists visit.  

Chicago 

Chicago, also known as the Windy City, has some of the best sights for tourists to see. From a beautiful skyline to famous structures like “The Bean”, there are interesting things to look at everywhere you turn. Additionally, if you’re looking for a hearty meal, a deep-dish pizza is a must-have in this city! Chicago is a special city that attracts tourists with its blend of culture, architecture, and midwestern vibe. If you’re considering investing in rental properties here, know that the peak tourist season is in the summer. 

Boston 

Boston, the capital of Massachusetts, has several sights to see and activities for tourists to enjoy. Most people who travel here make it a point to visit the Freedom Trail, which connects Boston Common to the Bunker Hill Monument. Additionally, you can find some of the top universities, including Harvard and MIT, here. If you’re a baseball fan, you can’t come to Boston without also seeing Fenway Park! As you can see, there’s a lot to do here, making Boston a prime tourist destination and an excellent opportunity for rental property investors.  

Attract More Tenants with Property Management 

Tourism impacts rental property demand in several ways. With an influx of people visiting an area, they need a comfortable place to stay during their vacation. This is why so many investors now have short-term rentals available in popular areas for visitors to use. However, knowing how to market your properties to attract tourists is key.  

If you’re looking for a top-notch rental property management company to help you market and manage your properties, look no further than BMG. Bay Property Management Group has the skills and dedicated team to help your rental succeed in any area. Contact us today to learn more about our comprehensive rental management services in Boston.