Vacation Rental Glossary

Average Daily Rate (ADR) is the average revenue earned per booked night at your property. It's a fundamental metric that shows your true nightly rate performance over time.

A business strategy where someone rents a property long-term and then subleases it on Airbnb or similar platforms for short-term stays to earn a profit.

Airbnb is a major online travel agency (OTA) that connects travelers with property owners offering short-term rentals.

The features and conveniences that enhance guest comfort in a short-term rental, from essential items like Wi-Fi to luxury additions like hot tubs.

The process of comparing your vacation rental's performance—like rates, occupancy, and revenue—to similar properties that compete for the same guests.

The number of days between when a guest makes a reservation and their actual check-in date.

An online travel agency (OTA) that allows travelers to book short-term rental options like apartments, vacation homes, and private rooms.

A group of properties similar to yours in location, size, and amenities that helps you track performance and spot opportunities in your market.

A metric that shows how much cash your property generates annually compared to your initial investment, expressed as a percentage.

Stands for capitalization rate: the ratio of a property's net operating income (NOI) to its purchase price or current market value. It's used to measure its potential return on investment.

A group of properties similar to yours in location, size, and amenities that helps you track performance and spot opportunities in your market.

The practice of posting your vacation rental on multiple platforms, such as Airbnb, Vrbo, and Booking.com, to increase visibility and bookings.

The accounting principle that allows property owners to deduct the cost of their real estate investment over time to account for wear and tear and reduce taxable income.

A financial metric that shows how well a property's income can cover its debt payments, calculated by dividing net operating income by total annual debt costs.

A booking method where guests reserve directly through the property owner or manager instead of platforms like Airbnb or Vrbo, allowing hosts to avoid platform fees and build direct guest relationships.

The number of bookings in a specific market during a set time period, revealing how competitive and active that market is for short-term rentals.

Dynamic pricing is a revenue strategy that typically automates rate adjustments based on market conditions like demand and seasonality, helping you maximize earnings instead of using fixed prices.

Additional charges beyond the nightly rate that guests pay when booking a short-term rental, including platform service fees, cleaning fees, and other property-specific charges.

The overall quality and satisfaction a guest experiences during their short-term rental stay, from first click to final checkout.

A percentage of booking revenue that short-term rental platforms deduct to cover listing management, payment processing, and customer support services.

A market is both a geographic area (from regions to specific neighborhoods) and a categorized type (urban, coastal, mountain/resort) where vacation rentals operate, each with distinct patterns of demand and performance metrics.

Occupancy rate is the percentage of days a short-term rental property is booked compared to the total number of days it is available for booking, typically measured over a 12-month period. It is calculated by dividing the number of reserved days by available days and multiplying by 100.

Online Travel Agency (OTA). A formal industry term for booking platforms like Airbnb and Vrbo that connect guests with hosts while handling all aspects of the reservation process, from discovery to payment.

A comparison of your current booking activity against past performance to show if your property is on track - tracking key details like reserved nights, rates, and how far ahead guests are booking.

A platform designed to run short-term rental operations by centralizing and automating tasks. PMS tools handle everything from managing bookings and guest communications to coordinating cleaning schedules and tracking financial performance.

The total income generated by a short-term rental property from bookings, including nightly rates, cleaning fees, and any additional fees.

Regulations are rules that determine where, how, and when vacation rentals like Airbnbs can operate. These rules are set by cities, states, and regions to balance the benefits of short-term rentals with community concerns.

A key performance metric that shows what you really earn from your property. It combines your nightly rates and occupancy to show your actual income per available night.

The total number of short-term rental listings actively available for booking in a market during a specific time period, reflecting the level of competition and overall market availability.

Outlines the terms under which guests can cancel a booking and whether they are eligible for a refund. It helps protect the host’s revenue while providing clear expectations for guests about cancellations and penalties.

A property rented out for brief periods, typically less than 30 days, through platforms like Airbnb or Vrbo or through a direct booking platform. These include vacation homes, apartments, or private rooms.

Fluctuations in short-term rental demand and revenue based on the time of year, tourism trends, events, holidays, and even market type.

A vacation rental manager can be a person, company, or software platform that handles daily short-term rental operations—from marketing and guest communication to maintenance and pricing—to keep your properties running smoothly and profitably.

A major short-term rental (STR) marketplace specializing in whole-home rentals and vacation properties, Vrbo (originally "Vacation Rentals by Owner") is one of AirDNA's primary data sources.

A metric used to assess the profitability of short-term rental investments by comparing annual rental income to the property’s market value or purchase price. Yield provides a clear picture of potential returns, helping investors make informed decisions.