U.S. Review May 2025: Summer Signals Strength Despite Slower May Bookings

Key Takeaways:

• Supply growth surged to 5.7% year-over-year (Yoy), driven by a rebound in new listings, despite high mortgage rates.
• Occupancy dipped slightly (-1.1% YoY) as demand growth slowed, but strong ADR performance (+6.1%) kept RevPAR positive.
• Booking behavior continues to shift, with shorter lead times becoming more common, particularly among budget travelers.
• Drive-to-leisure markets and major cities like D.C. and Philadelphia are outperforming heading into summer, showing strong demand for holiday weekends.

After months of steady growth, U.S. short-term rental supply surged in May, rising 5.7% year-over-year despite high mortgage rates. Demand growth slowed, leading to a modest -1.1% dip in occupancy—its third year-over-year decline in the past 12 months. 

Still, strong ADR growth (+6.1%) kept RevPAR positive at +4.8%. While hotels brace for a softer summer, STRs seem to be holding momentum, especially in drive-to-leisure markets that performed well in May and are expected to stay strong into the summer.

Ongoing uncertainty around trade policy appears to be reinforcing demand for domestic, drive-to-leisure markets. These markets, popular in the post-pandemic travel boom, are well-positioned to carry that momentum into summer. Still, with conditions shifting quickly, we’re watching trends closely.

Economic Outlook

More than two months have passed since the Trump administration’s surprise tariff policy announcement, yet major uncertainty remains. Talks with China have stalled, leaving tariff rates largely unchanged since the initial announcement. Several other trade agreements are still pending, and the overall legality of the new tariff structure is currently being challenged in court.

Despite this uncertainty, broader economic indicators held steady in May. Inflation remained moderate at 2.4% YOY, according to the Bureau of Labor Statistics. Consumer confidence surged, with the Conference Board reporting the largest single-month gain in four years.

Interestingly, one unexpected effect of the tariff news has been downward pressure on energy prices. Fears of reduced global demand pushed oil and gasoline prices lower, and similar declines were seen in vehicle prices and airfares—offering some relief to consumers ahead of the summer season.

However, inflationary pressures may still emerge. Reduced import volumes are expected to drive prices up in the coming months, and oil prices jumped following Israel’s attack on Iran. The Federal Reserve is watching closely. If inflation rises and the labor market remains strong, the Fed may delay any rate cuts—or even raise rates further.

For now, the job market remains healthy. In May, the U.S. added 139,000 jobs, keeping the unemployment rate at 4.2%, unchanged from April. Leisure and hospitality jobs saw a notable boost, even as hotel operators voiced concerns. Federal employment dipped slightly, but not enough to affect the overall unemployment rate.

As a result, potential STR investors may still face high STR financing costs for some time. Oxford Economics continues to project just one rate cut in 2025, expected late in the year.

At a Glance: Key U.S. STR Performance Metrics for May 2025

• Revenue per Available Rental (RevPAR) increased 4.8% year-over-year (YOY) to $169.78
• Available listings reached 1.75 million, a 5.7% increase year-over-year
• Demand nights rose 4.4% compared to May 2024
• Occupancy averaged 55.3%, down 1.1 percentage points year-over-year
• Average Daily Rates (ADR) climbed to $307.05, up 6.1% from last year
• The Repeat Rent Index (RRI) rose 7.4% year-over-year
• Total nights booked declined slightly, down 0.3% from May 2024.

Supply Reaccelerates Leading Up to Summer Travel Season

Investment in the U.S. STR market remained challenging in May, as mortgage rates hovered near 6.8% and tariff-related concerns kept building material costs, and home prices, elevated. 

Still, the pull of upcoming summer demand proved strong. Supply growth accelerated to 5.9% in May, up from 3.9% in April, marking the fastest pace since August 2024.

A significant share of May’s supply growth came from a rebound in new listings. After declining year-over-year since March 2024, new listing activity began to stabilize in 2025. 

In May, the number of new listings nearly matched last year’s total—falling short by less than 0.2%. Of the 94,197 net new available listings added compared to May 2024, an estimated 60,000 were likely driven by new listings alone.

Compared to April, May saw 4,388 more new listings enter the market than April, with most of the increase concentrated in resort areas and Small City/Rural locations. These leisure-focused destinations typically see seasonal boosts, and the uptick in new listings reflects expected demand heading into the summer.

May Sees Slower Demand Growth After Easter Calendar Shift

May demand growth slowed to 4.6% year-over-year, a sharp drop from April’s 10.0% gain. This decline was expected due to a calendar shift—spring break and Easter, which took place in March 2024, occurred in April this year. May’s growth is more in line with February (+4.9%) and March (+3.4%) and came up against a tough comparison, as May 2024 saw a strong +11.1% increase.

Meanwhile, May bookings turned negative for the first time since January 2024, when severe weather dampened demand. Booking nights—reservations made during the month for current or future stays—are often seen as an indicator of upcoming demand. However, the dip may not signal weakness for summer. May 2024 had unusually high booking growth (+12.9%), and the growing trend toward last-minute reservations continues to reshape booking patterns.

Stronger supply and softer demand contributed to a modest 1.1% decline in occupancy for May. While occupancy was slightly below 2024 and 2019 levels, it remained well above 2023 and within a typical range for the month. 

So far in 2025, occupancy trends are closely tracking those seen in 2023, which briefly outperformed pre-pandemic 2019 levels during the summer months.

Across all location types, demand growth slowed in May compared to April’s strong performance. Urban markets were the least affected by the slowdown. Small City/Rural areas led the way with a 10.7% year-over-year increase in demand, while Coastal markets came in second at 4.7%. That marks a significant drop from April’s 16.4% growth in Coastal areas, which had been boosted by Spring Break travel.

New Listings Price Low, Returning Hosts Price High

ADR growth has remained a consistent bright spot over the past year, with year-over-year increases hovering around 5%. In May, ADR rose by an even stronger 6.1%. With occupancy expected to remain relatively flat compared to last year, AirDNA forecasts that most RevPAR gains in 2025 will come from rate increases rather than higher occupancy.

Supporting that trend, the AirDNA Repeat Rent Index (RRI)—which measures how much existing hosts raised their rates—climbed 7.4% year-over-year. This suggests that many of the new and returning listings added in May were priced lower than average, while established hosts were able to raise rates more aggressively than the broader market.

Location Trends

Occupancy trends among the top 50 U.S. STR markets shifted sharply in May. After 41 markets posted occupancy gains in April, the pattern reversed—41 markets reported declines in May. Still, a few cities stood out with strong performance. Philadelphia saw a 6.1% increase in occupancy, supported by continued demand growth (+14.0% in May). St. Petersburg, Florida also posted a 5.8% gain as it continued to recover inventory lost during 2024’s Hurricane Milton.

On the other end, notable occupancy drops were seen in New Orleans (-8.6%), which has recently begun enforcing stricter STR regulations, and Las Vegas (-8.5%), where demand held steady but a surge in new listings diluted occupancy.

Many large U.S. cities are seeing listing growth outpace the national average. In May, 17 of the top 50 STR markets posted available listing growth above the 5.9% national rate—and 14 of those were in urban areas. Notable urban markets included Jersey City/Newark, Washington D.C., and Chicago, all with a 20.4% increase, along with strong growth in Boston. 

Outside of major metros, Cape Coral/Fort Myers, Florida led with a 23.2% jump as it continues its strong recovery from Hurricane Ian. Las Vegas (+12.1%) and San Diego (+9.7%) also exceeded the national average, though they are classified as Mountains/Lake Resort and Coastal Resort markets, respectively.

Summer Pacing Slows, But Context Matters

As summer approaches, May demand pacing—which compares current on-the-books reservations to the same time last year—dropped from April’s range of 8–10% to a more modest 2–8%. While this decline may seem sharp, it doesn’t necessarily indicate weakening demand, as pacing figures are heavily influenced by changes in booking lead times.

Lead times have steadily declined over the past year, reflecting growing consumer caution amid economic uncertainty, including ongoing trade policy shifts and geopolitical tensions. 

To track these shifts, lead times are divided into eight evenly sized categories. Comparing reservations made in May 2024 to those in May 2025, bookings made within a single day rose by nearly 4%, while bookings made 2 to 3 months in advance fell by 4%. This shift highlights a growing preference for shorter-term decision-making.

The most notable increase in lead times has occurred in the segment of bookings made more than six months in advance. However, this category still represents a relatively small share of total reservations. 

The growth is largely driven by upscale and luxury travelers, while budget-conscious guests are booking even closer to their stay dates than they did a year ago. As a result, budget-tier listings are likely to see the biggest impact from last-minute booking trends.

Fourth of July Demand

With July 4th approaching, demand pacing is notably up in the nation’s capital. Washington D.C. has 26.8% more bookings on the books for the holiday weekend compared to this time last year. The increase may be tied to both the shift in political leadership and the fact that Independence Day falls on a Friday this year—making a long weekend that much more inviting.

Other bright spots include several drive-to-resort destinations along the northern Gulf Coast. Santa Rosa/Rosemary Beach, Florida saw a 17.6% increase in bookings, followed by Destin/Ft. Walton, Florida at 15.0%, and Gulf Shores/Mobile, Alabama at 12.7%. These markets continue to benefit from their accessibility and strong appeal for regional summer travel.