AirDNA economists, Jamie Lane and Bram Gallagher take us through an exclusive look at AirDNA’s latest U.S. STR Outlook Report.

Gain actionable takeaways and data-driven projections to help you plan for growth in the years ahead. From demand stabilization to supply trends and market-specific growth opportunities, gain the clarity you need to thrive in a dynamic market.

You'll learn:

Introduction and overview of topics 0:06

The focus is on the short-term rental (STR) industry's outlook for 2025. The session covers economic forecasts for the US, supply, demand, and market trends in STR, including global and market-specific insights, with a report link provided.

Global RevPAR Trends 2:21

RevPAR trends are discussed globally, showing moderate growth in North America (2%) and strong growth in Europe (7%), while South America and Asia Pacific faced declines due to oversupply and slower post-COVID recovery.

US Economic Insights 4:08

The US economy is forecast to outperform other advanced economies, driven by productivity growth, though challenges like high interest rates and reduced tourism may affect the STR market.

Detailed Economic Outlook for 2025-2026 6:42

The US economy is expected to grow steadily in 2025-2026, with increased consumer sentiment and investment. High interest rates will keep borrowing costs elevated, affecting STR investment. Housing prices remain stable, but may rise, and productivity growth is positive, supporting the economy.

Investment Challenges and Market Dynamics 12:12

The market is facing investment challenges, with performance not matching the highs of 2021. Home prices in regions like Florida, California, Arizona, and Michigan are seeing steady growth, with no significant declines expected. Investors need to evaluate if home prices still offer good value.

Income Growth and Consumer Demand 13:36

Income growth is improving after a rocky period post-pandemic, boosting consumer spending, including on vacations, which will drive demand for short-term rentals.

Supply and Demand Projections 15:03

Supply growth in short-term rentals slowed after a surge in 2022 and is expected to continue decreasing. Demand growth will also slow, but occupancy rates will rise toward the long-term average. ADR is expected to increase, providing a more positive outlook for operators.

Short-Term Rentals vs. Hotels 17:29

During the pandemic, short-term rentals increased to 15% of paid accommodations but dropped as hotels rebounded. In 2024, short-term rentals are growing 7%, outpacing hotels at 0.5%. Budget hotels are struggling, while upscale segments thrive, signaling a growing opportunity for short-term rentals.

Supply Growth Analysis 20:43

Supply growth is slowing due to high home values and interest rates. Small and mid-sized cities are seeing strong growth, while markets with new regulations or disasters, like New York and Maui, have slowed down.

Investment Opportunities in Short-Term Rentals 22:53

Investors should monitor supply growth and market performance. High growth in markets like Phoenix may signal overbuilding, while small cities with strong rental premiums remain attractive, especially post-pandemic.

Impact of Regulations on Urban Markets 26:05

Urban markets, especially New York, face slow growth due to stricter short-term rental regulations. While New York may see some recovery, many cities are introducing similar rules, limiting urban supply growth. Resort markets will grow as economic conditions improve, with suburban and urban markets likely converging by 2026.

Market Recovery Post-Pandemic 28:09

The short-term rental market is recovering, with occupancy rates rising toward long-term averages after pandemic-induced economic fluctuations. Steady occupancy growth is expected through 2026. Professional operators maintain higher occupancy (up to 60%) using tools like dynamic pricing, while nonprofessionals have seen declines (down to 54%). Professionals are better at managing rates to capture demand.

Forecasting Supply and Demand 33:24

Regulations impact urban markets, with cities like San Francisco and New Orleans seeing slowed supply growth. New York’s market is stabilizing, and areas like San Jose benefit from regulatory shifts. Atlanta faces supply challenges due to uncertainty, but existing hosts gain pricing power. Resort markets also face supply disruptions from natural disasters.

Effects of Natural Disasters on Resort Markets 37:14
Natural disasters, like hurricanes, decrease demand and supply. While areas like Hawaii and Maui face recovery challenges, others like Cape Coral and Fort Myers are growing post-Hurricane Ian. Sarasota’s recovery from Hurricane Milton will take time, while areas like Saint Pete may reopen more slowly, affecting local market dynamics.

Understanding the Repeat Rent Index (RRI) 39:32
The Repeat Rent Index filters out mix shifts and price adjustments. During the pandemic, demand for larger rural properties pushed ADRs up. In 2023, inflation led to lower ADRs, but larger listings are now driving rates back up.

Market Dynamics Post-Pandemic 41:26
Pandemic-related shifts caused a gap between ADR and RRI, which will close as markets stabilize. Larger properties, especially in urban areas, remain in demand due to group travel.

Shifts in Demand for Short-Term Rentals 43:53
Larger, budget-friendly properties in suburban and rural areas are growing in demand as they offer better value for group stays. Luxury properties remain desirable for privacy.

Forecasting ADR Growth for 2025 46:23
Expect modest ADR growth in 2025, with urban areas seeing a 2% increase. Supply growth in smaller cities may lead to weaker occupancy, but suburban demand will drive ADR growth.

Broader Trends in the Short-Term Rental Market 50:16
Cross-listing on multiple platforms is crucial for professional operators with 21+ units, as it increases booking chances. Smaller hosts may not fully benefit from this advantage.