An STR report provides a snapshot of the short-term rental market. These reports are often released quarterly and monthly to give investors insight into current market conditions. In this guide, we’ll explain the terminology used in these reports so you can read STR data like a pro.

What Is an STR Report?

Stacks of coins and magnifying glass with trends chart

STR stands for short-term rental and refers to a place people can rent for a short time. In the Smoky Mountain market, this usually includes cabins and condos. An STR report or tracker examines short-term rentals in a specific market for a certain period of time and provides a snapshot of market conditions. They also usually compare current conditions to previous periods. These trackers offer valuable insight into the state of the short-term rental market through occupancy rate, absorption rate, daily rate, booking lead time, and other data. Investors can use this STR data to understand how their investments are performing and why.

STR Data Terminology

STR data includes a lot of terminology that you may not know. Let’s break down some of the common terminology and acronyms that are most often used in STR data reports:

ROI

ROI stands for return on investment. The ROI of a short-term rental shows the value of an investment versus its cost. This is calculated by taking the profit generated from renting a property and removing the cost of generating that money, then dividing it by the cost. The resulting percentage is the ROI. A positive percentage is generally considered good and shows that the rental property is generating a return on investment.

OCC Rate

Hand holding model of house and set of keys

OCC rate stands for occupancy rate. This value shows the utilization of a short-term rental property over a certain period of time. It is calculated by dividing the number of booked nights by the total number of nights over a selected time period. Occupancy rate can vary greatly by season and property type.

Gross Income

Gross income is the total amount of income generated from a rental property before deducting any expenses or taxes. In STR data, gross income is the total amount of money renters paid to stay in a property during a certain period of time.

Booking Lead Time

Booking lead time is the time between a guest booking their stay and arriving at the property. It is found by subtracting the reservation date from the check-in date. The difference in days is the booking lead time. This lead time can vary based on a variety of factors, including seasonality and demand.

Average Daily Rate

Mini house on stack of coins

In STR data, average daily rate, sometimes called ADR, refers to the average nightly price charged for renting a property. It provides insight into pricing trends and revenue performance over a specified period. This rate can fluctuate due to factors such as seasonality, demand, location, and promotion.

Absorption Rate

Absorption rate measures how many properties are rented within the market. It is used to gauge the demand for rental properties and provides insight into current market conditions. This rate is found by dividing the number of occupied properties by the total number of available rental properties.

Understanding the STR Market in the Smokies

Now that you know the terminology, you’re ready to start reading STR data like a pro! In addition to knowing what the numbers mean, it’s also important to know what influences them in order to fully understand the STR market. Learn more about the critical drivers affecting short-term rental prices in the Smoky Mountains so you can make the right decisions as a real estate investor.