In the world of short term rentals (STRs), understanding the ebb and flow of seasonal trends is crucial for property owners looking to maximize their income. Austin, Texas, often stands out as a unique market due to its relatively low seasonality. However, it's essential to recognize the major events that can bring substantial revenue spikes to Austin's STR owners and how specific submarkets are affected by seasonality.
Understanding Seasonality in Austin’s STR Market
As mentioned, Austin boasts an incredibly low level of seasonality compared to many other destinations. In fact, airdna.com scores the Austin market at a 93 for seasonality; this indicates an incredibly low seasonality rate. The higher the score, the lower the seasonality for the STR market. In comparison, Dever scored a 70 for seasonality. Gatlinburg, “the golden child of STR investing”, scored a 57; Miami comes in at 68 for its seasonality score. Obviously Austin is unique for this low seasonality score, and there are several factors that contribute to this trend.
Austin's status as a burgeoning tech hub attracts business travelers and remote workers throughout the year. With major companies setting up shop and hosting events in the city, STR owners benefit from a steady stream of bookings. Austin is home to tons of big tech companies, among the biggest are Apple and Samsung. The Austin outposts of these two employers are the second largest for each company outside of their hometown. Additionally, Austin has something special that is hard to put your finger on exactly, but attracts the masses. It could be Austin's vibrant music and cultural scene that keeps tourists coming in all seasons. Or, perhaps it’s the beautiful landscape and relatively temperate climate that making it a sought-after destination for outdoor enthusiasts.
Major Events Fuel Revenue Spikes
While Austin may have lower seasonality, it's not immune to revenue spikes during major events and festivals. These events can significantly impact STR income and should be on every owner's radar.
1. South by Southwest (SXSW): SXSW is one of the largest events in Austin, bringing in thousands of attendees. Property owners can charge premium rates during this time, making it a lucrative period for short-term rentals. SXSW occurs every year in March with the Music, Film, and Interactive Sessions all drawing in the crowds. Interestingly, owners usually can garner the most income from the Interactive portion of the festival, so STR investors should price their properties accordingly.
2. Austin City Limits (ACL) Music Festival:This annual 3-day two weekend music festival draws music lovers from around the world, creating a surge in demand for short-term rentals near Zilker Park each October. This year, the festival pulled in nearly half a million attendees over the 6 days. That’s a lot of people needing a place to stay.
3. Formula 1 United States Grand Prix (F1): Motorsport fans flock to Austin for this high-profile event, offering another opportunity for STR owners to boost their income. While F1 is held at the Circuit of Americas in Del Valle just east of Austin, a variety of ancillary events will also draw attendees to stay closer-in to town.
Seasonality within Austin Airbnb Submarkets
While Austin as a whole enjoys lower seasonality, specific submarkets may still experience fluctuations. Lake Travis, a popular destination for boating and water activities, is an excellent example. STRs around Lake Travis typically see increased demand during the summer months, with families and vacationers seeking waterfront properties. On the other hand, these properties may experience lower occupancy during the cooler months. This seasonality is more prominently displayed on the north shore of Lake Travis where the primary attraction is the lake itself. The 78645 zip code which encompasses the vast majority of the north shore of Lake Travis including all of Lago Vista scored a 56 for seasonality on airdna.com. In comparison, homes on the south shore of Lake Travis are more sheltered from these seasonal trends since vacationers can launch off from the south shore to many popular attractions with relative ease. 78734 which encompasses Hudson Bend on the south shore of Lake Travis scored a 67 for seasonality.
In addition to Lake Travis, there are several other submarkets around Austin that experience seasonality.
Dripping Springs: Seasonality Score- 87
Known as the "Gateway to the Hill Country," Dripping Springs is a popular wedding and event destination. STRs in this area see increased demand during the wedding season, typically in the spring and early fall. In the heat of Summer, revenue is actually down in Dripping Springs because it is simply too hot to do much of anything, and as such, it’s a less popular time of year to get married.
Wimberley: Seasonality Score- 65
This charming town, known for its market days and the scenic Blanco River, experiences heightened interest from tourists during the summer and fall months, thanks to outdoor activities and local events.
Bastrop: Seasonality Score- 77
With its historic town square, Colorado River access, and proximity to the Texas Lost Pines, Bastrop's STR market sees more significant interest in the spring and fall, particularly for outdoor and nature-related activities.
Austin's short-term rental market, known for its lower seasonality, offers a unique investment opportunity. Property owners can enjoy a relatively steady stream of bookings throughout the year. However, it's essential to leverage major events and festivals that provide significant revenue spikes. Additionally, understanding the seasonality within submarkets can help owners make informed decisions and maximize their income in this thriving market. By staying informed and flexible, Austin's short-term rental owners can enjoy consistent profits while making the most of the city's year-round appeal. If you have questions about the seasonality within the Austin market or any of Austin’s submarkets, please contact us. We’d be happy to shed light on these trends so that you can make an informed decision on your short term rental investment purchase.
