Short-term rentals are ever more popular and profitable in Rome and Milan

In the first half of 2018, the profitability of the short-term rental sector increased in comparison with the same period last year, according to the third Halldis Short-Term Rental Observatory. idealista/news takes a closer look at its content.

According to the data, the profitability of holiday apartments is increasing by up to 20% in Milan and up to 12% in Rome, thanks to the increase in prices and the occupancy rate; Bologna stays about the same, balancing a 3% fall in the rate of occupation in holiday lets with a 4% increase in prices; Florence has a decrease of 2.97%, due to the fall in prices because of high competition in the Tuscan capital.

The study carried out by Halldis analysed the 4 main locations belonging to the company's portfolio: Milan (385 apartments), Rome (190), Florence (250) and Bologna (140).

First, the Observatory analysed how customers experience short-term rentals based on factors such as supply (total apartments), differentiation by city and area, average length of stay, "booking window" (time range between booking and arrival at the apartment), average price per day and the trends in the two previous semesters (January-June 2017 and July-December 2017).

Secondly, the Observatory analysed the profitability of real estate, on the basis of the variables mentioned above, plus the occupation rate and RevPar (Revenue Per Available Room, which considers the average daily price and occupancy rate to work out how much income can be obtained from rent in a given time).

Milan

In Milan, in the first six months of 2018, the average occupancy rate for short-term lets was 85.68%, an increase of more than 10% over the same period in 2017.

The income generated by rent (measured by RevPar) is higher in the Fashion Quadrilateral area (197.62 euro/day), which exceeds the areas of Duomo-Centro (134.38 euro/day) and Conciliazione-Cadorna (118.24 euro/day).

Rome

In Rome, in the first six months of 2018, the occupancy rate was 69.25%, almost 5% higher than in the first half of 2017.

The highest RevPar was recorded in Trevi (97.08 euro/day), followed by Campo de' Fiori (79.62 euro/day) and Piazza di Spagna (75.38 euro/day).

Bologna

In Bologna, in the first six months of 2018, occupancy data and RevPar were totally opposite: the number of occupants fell by 3% but average prices rose by 3.99%, giving an overall RevPar result of a positive 0.88%.

The district of Bologna with the highest daily performance is the Centre (79.35 euro), outstripping all the others by far. The second most profitable area is Saffi-Ospedale Maggiore with a RevPar of 47.50 euro/day.

Florence

In Florence, in the first six months of 2018, there was a 2.32% increase in the occupancy rate and a significant drop in average prices, due to the high availability of properties, especially private ones, which led the RevPar (and therefore the performance of properties) to register a decline of 1.89%.

Unlike all other cities, Florence’s historic centre doesn’t have the highest RevPar, with just of 64 euro/day. It is surpassed by the Oltrarno area with 67.67 euro/day and by houses in unrecorded areas which are generally large and reach 79 euro/day.

Lowest and highest occupancy

One particularly interesting fact has to do with when people stay in short-term rental apartments. According to the results, during the semester in question, January was the month with the lowest occupancy rate (and therefore the lowest performance) in all four cities analysed.

The highest level of occupancy in Milan was recorded in February (89.32%), while in Rome (84.42%), Bologna (71.83%) and Florence (78.02%) it was in May. In general, the occupancy rate is affected by such famous fairs as the Milan Fashion Week and cultural events like Maggio Fiorentino in Florence.