Is the party over for holiday let landlords? New research shows that while the number of holiday lets is booming, the number of people booking them is dropping, meaning many landlords could be facing a financial headache.

It seems that many landlords have been drawn to the promise of higher profits from holiday lets. Over half a million short-term rental listings are now active across the UK, with a big jump in cities like London (up 22%) and Manchester (up 29%).

But the good news ends there. The number of people booking these holiday lets is falling, with occupancy rates dipping significantly in popular destinations.

Holidaymakers Feeling the Pinch

Even though there are more listings than ever, it appears holidaymakers are cutting back on their trips. Annual revenue from short-term lets has stagnated or even dropped in many areas, with the biggest declines seen in Devon, Dorset, and the Cotswolds.

Higher Prices Won’t Save the Day

To make up for the fall in bookings, many landlords are trying to squeeze more money out of each guest. Average daily rates have been hiked in popular destinations like Edinburgh, the Lake District, and Cornwall. But with the cost of living soaring, it’s unlikely that holidaymakers will be willing to pay significantly more for a holiday.

What Does This Mean for Landlords?

This research suggests that the short-term let market might be reaching a tipping point. With more listings and fewer bookings, many landlords could find themselves struggling to make a profit. While some areas have seen minimal growth in revenue, others have actually seen a decline.

The rising cost of living is likely to be a major factor in the falling demand for short-term lets. As people tighten their belts, they may choose to stay at home or opt for cheaper holiday options.

Landlords need to be aware of these changing market conditions and adjust their strategies accordingly. Simply raising prices might not be enough to compensate for falling occupancy rates.