Revenue and Occupancy Insights: Clarity into Housing Demand & Financial Performance from the 2024 State of the Student Housing Industry Report
StarRez’s 2024 State of the Student Housing Industry Report provides a comprehensive look at the trends and strategies shaping student housing today. From occupancy and alternative housing to revenue generation and demand, the report highlights how institutions are adapting to meet the evolving needs of students while balancing financial sustainability. This post explores the key insights and takeaways of the report in these areas, showcasing innovative approaches and opportunities for growth in the student housing industry.
Understanding Student Housing Demand and Financial Performance
Institutions offering alternative housing options, ranging from standard rooms to apartment-style living, tend to experience high occupancy rates. Key factors influencing these rates include affordability, variety of housing options, and proximity to campus. 58% of respondents indicated occupancy rates north of 91%. Inversely, 42% of surveyed institutions reported occupancy rates below 91%, signaling a need for some institutions to strategize about how to better attract more residents. Learn more about the University of Tasmania’s success.
Alternative Housing Options: Catering to Diverse Needs
Institutions provide a range of student housing options, reflecting the diverse preferences of students. Most respondents offer standard rooms (292) and suite-style housing (275). Alternatives include townhouses (83), houses (67), fraternities/sororities (61), and other (25). (Note: institutions had the ability to select more than one option).
“Other” encompasses specialized student housing types such as pod-style accommodations, family housing, and hybrid setups with private rooms but shared bathrooms. These varied offerings highlight institutions’ efforts to address evolving housing demands.
Revenue Generation: Setting Rental Rates
Institutions use different methods to determine student housing rental rates, often combining approaches for accuracy. 170 institutions used market analysis, 165 used a cost-based approach, and 132 used competitive analysis.
Approximately 16.4% of institutions rely on a combination of all three approaches. Many institutions report that rental rates are determined by governing bodies, financial offices, or other administrative entities, often with limited input from housing departments, and set rates based on budget needs, market conditions, and state guidelines. Other respondents were unsure of the exact process.
Revenue Generation: Application Fees
50% of the surveyed institutions waive application fees for first-year residents, prioritizing accessibility and inclusivity over additional revenue. This approach is particularly beneficial for students from lower-income backgrounds. The other 50% of the surveyed institutions do charge application fees, often doing so to cover administrative costs, to manage the application process more efficiently, or as a filtering device to ensure that applicants are serious and committed.
Of the institutions that charge fees, 38.6% charge between $10-$50, 31.6% charge between $51-$100, 12.7% charge between $101-$150, 9.5% charge between $151-$200, and 12.7% charge $201 or more.
Maximizing Additional Revenue Streams
98% of institutions report generating revenue from non-academic year housing, such as from conferences, events, and short stays. While 42% of the institutions that generate such revenue reported that it accounted for 0-10% of annual revenue, 31% reported that it accounted for 11-20% of annual revenue, 15% reported that it accounted for 21-30% of annual revenue, and 12% reported that it accounted for 31% or more of annual revenue.
In other words, 58% of institutions generating revenue from non-academic year housing rely on it for more than 10% of their annual revenue. That is substantial. As for the 42% that generate up to 10% of their annual revenue in this way, there is a significant opportunity to utilize non-standard housing for additional revenue streams.
Student housing operations can boost revenue by leveraging several strategies:
- Summer Housing: Housing interns, visiting academics, and short-term tenants.
- Youth Summer Camps on Campus: Partnering with campus groups for athletic and themed camps and community events.
- Specialized Housing Options: Offering enhanced amenities or additional services such as appliance rentals.
- Conference & Event Spaces: Renting out facilities for weddings, workshops, or social gatherings.
- Extended Lease Agreements: Attracting international students and professionals with flexible contracts or year-round leases.
Using student housing facilities diversifies the revenue stream, reducing financial reliance on traditional academic-year occupancy. Summer rentals and conference hosting can generate substantial additional income, and specialized housing options and space rentals for conferences and events can attract premium pricing and maximize facility usage beyond the academic year. Learn more about University Center Chicago’s success.
Understanding Student Housing Demand
Surveyed institutions rated housing demand on a scale of 0 (very low) to 100 (very high), which broke down as follows:
- Very high: 62%
- High: 24%
- Low: 13%
- Very low: 1%
The data above shows that demand for student housing is high. Further analysis revealed that demand increases with student satisfaction, suggesting a “word-of-mouth” effect: satisfied residents rated demand at an average of 82.3, compared to 77.1 among neutral or unsatisfied residents.
Conclusion: Understanding How to Maximize Revenue Streams
The 2024 State of the Student Housing Industry Report shows that, by offering diverse and alternative housing options, diversifying and maximizing revenue streams outside of academic year housing, and prioritizing resident satisfaction, institutions can meet growing student housing demand and ensure the financial health and long-term sustainability of student housing operations.
To explore more in-depth insights and access the full student housing industry report, visit https://www.starrez.com/student-housing-industry. Stay tuned in to the latest trends in student housing by following StarRez on LinkedIn.
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