What 2026 Will Look Like for STRs

The short-term rental (STR) industry's brightest minds converged at the Data and Revenue Management (DARM) Conference to dissect market performance and forecast what's ahead. This exclusive fireside chat brought together Jamie Lane, Chief Economist at AirDNA, and Pedro Borges, Director of Data Science at PriceLabs. Simon Lehmann, a respected industry veteran and conference host, moderated the discussion, bringing his global perspective to the conversation.

Simon Lehmann frames the conversation with the question on every property manager's mind: "Let's talk about data and 2025—what is the data signaling, and what does the future hold?"

2025 Short-Term Rental Market Stabilization

Global and Regional Demand Patterns

The 2025 vacation rental demand patterns reveal a market finding its equilibrium after years of volatility. The most striking trend is what experts call the "K-shaped recovery"—a divergence where luxury properties thrive while budget and midmarket segments struggle. This phenomenon isn't limited to any single region; it's reshaping markets globally.

Jamie Lane emphasizes the universal nature of this trend: "The K-shaped economy is real—not just in the US, but globally. Luxury is outperforming, budget is underperforming, and this is true everywhere." This pattern reflects broader economic forces, with high-income travelers from the United States and Europe driving demand for premium properties across continents.

The influence of American travelers extends far beyond US borders. Lane notes that "American travelers don't just dictate US trends but also global trends," pointing out that the US represents the top source of inbound travelers for most European countries. However, domestic demand remains dominant in certain markets—France generates 80% of its STR demand internally, while countries like Iceland depend almost entirely on international visitors at 99%.

Occupancy and ADR Trends in 2025

The stabilization theme continues when examining specific performance metrics. Pedro Borges observes, "We're seeing stabilization in occupancy and even ADR (Average Daily Rate)." This steadiness marks a significant shift from the dramatic swings of previous years, creating a new competitive landscape where growth comes from market share gains rather than overall market expansion.

Occupancy rates in 2025 have plateaued across most markets, forcing property managers to rethink their strategies. The days of riding market-wide growth are over. Instead, success now depends on differentiation and operational excellence. Property managers must focus on stealing share from competitors rather than benefiting from a rising tide that lifts all boats.

This stabilization extends to pricing power as well. While ADR isn't declining significantly, the rapid rate increases of previous years have moderated. Property managers who became accustomed to annual double-digit rate increases must now find other ways to grow revenue, whether through improved occupancy, reduced costs, or expanded inventory.

Supply Growth and Regulatory Impacts

STR supply growth 2025 tells a story of market maturation and regulatory pressure. Jamie Lane reveals a crucial data point: "Currently, we're at the lowest level of supply growth in a non-COVID period since we began tracking the industry." Both the US and Europe are experiencing approximately 3% supply growth—a dramatic slowdown from the 20% growth rates seen just three years ago.

Regulatory impacts vary significantly by region. In Europe, regulation drives much of the supply contraction. Lane provides specific examples: "Spain's listings are down 6%, Greece and Italy are also down." These declines stem directly from new regulations limiting short-term rental operations, forcing property owners to pivot to other uses or exit the market entirely.

The US market faces different pressures. Rather than regulation, market performance drives supply changes. High home values and elevated interest rates discourage new investors from entering the market. Without fresh inventory replacing natural churn, overall supply declines in underperforming markets. Property owners who can't cover their mortgages through rental income are selling, often to buyers who won't operate the properties as short-term rentals.

Lane clarifies an important distinction about AirDNA data 2025: "When you account for cross-listings, it's about 10 million unique properties. But we're still tracking 14 million listings." This clarification helps property managers understand the true size of their competitive landscape while acknowledging the complexity of multi-platform distribution.

Competitive Dynamics and Property Manager Strategies

The Disappearing Midmarket and Churn

The midmarket segment faces an existential crisis in 2025. Underperforming properties are experiencing significant supply losses, with clear metrics defining the divide. Jamie Lane shares sobering statistics: "If you're an underperforming property manager... you lost 3% of your supply this year on average. Individual hosts lost about 5%."

The culprit? Online Travel Agencies (OTAs) increasingly favor top-performing properties. Lane explains the mechanism: "OTAs are promoting guest favorites and top-tier hosts... If you're not getting these badges or have a score below 4.9, you're not showing up until page two or three." This algorithmic preference creates a vicious cycle where underperforming properties receive less visibility, leading to lower bookings and eventual market exit.

Review scores have become the new battleground. Properties with average review scores below 4.7 face an uphill battle for visibility and bookings. Without a strong direct booking strategy to compensate for reduced OTA exposure, these properties struggle to maintain viable occupancy levels. The trend accelerates as margin compression forces property managers to make tough decisions about which properties to keep in their portfolios.

Professionalization and Revenue Optimization

The market's evolution demands increased professionalization from property managers. Pedro Borges emphasizes this shift: "Becoming more professional, using good tools, and learning more becomes really powerful." This isn't just about adopting technology—it's about fundamentally rethinking how to compete in a mature market.

Professional property managers demonstrate they can overcome review score disadvantages through superior revenue management. Borges notes an interesting dynamic where some managers maintain strong revenue performance despite lower guest ratings. This success comes from leveraging distribution knowledge, pricing expertise, and operational efficiency to maximize revenue even when guest satisfaction metrics lag.

The adoption of revenue management solutions remains surprisingly low despite their proven benefits. Estimates vary, with Pedro suggesting 10-15% adoption overall, while Jamie's data indicates about 30% of property managers use revenue management tools. For PriceLabs users specifically, adoption reaches 60%. Among larger operators with 20+ listings, adoption rates are significantly higher, yet it's striking that 40% of professional property managers still rely on manual pricing strategies.

Pricing Challenges Across Market Segments

Different market segments present unique pricing challenges in 2025. Pedro Borges explains the fundamental issue: "Pricing is easier when you have a large sample size... For luxury listings, the data set is much smaller, making pricing more challenging." This comp set problem particularly affects luxury properties, where fewer comparable listings make accurate pricing more art than science.

The luxury segment's growth may eventually solve this problem by creating larger comp sets, but for now, pricing high-end properties requires sophisticated analysis and market knowledge. Property managers must look beyond simple competitive sets to understand demand patterns, seasonal variations, and guest preferences that drive luxury bookings.

Midmarket properties face the opposite challenge—abundant comps but intense price competition. With numerous similar properties vying for the same guests, pricing becomes a race to the bottom unless managers can effectively differentiate their offerings. Success requires balancing competitive pricing with value-adds that justify premium rates.

Key Metrics and Data Practices for 2025

Essential KPIs for Property Managers

Understanding which metrics matter has never been more critical for property managers navigating 2025's competitive landscape. Pedro Borges advocates for a time-tested approach: "The strategy is to focus on past data points, adjusted by leading indicators." This means examining historical occupancy and ADR performance, then adjusting expectations based on current pacing data.

The industry debate over RevPAR (Revenue per Available Rental) continues, with some arguing it's overhyped. However, RevPAR remains valuable as it combines occupancy and rate performance into a single metric. The real evolution in metrics thinking comes from Jamie Lane's perspective on profitability measures. Having transitioned from the hotel industry where GOPPAR and TrevPAR measure profitability, Lane sees a gap in short-term rental metrics.

"We need a better measure that includes all expenses—management fees, insurance, property taxes, and more," Lane emphasizes. This holistic view becomes crucial as property owners face mounting costs. Insurance premiums have skyrocketed over the past two years, while property taxes continue climbing in many markets. Without understanding total profitability, property managers can't truly partner with owners to ensure sustainable operations.

OTA Fee Structure Changes and Data Implications

The shift to all-in pricing represents one of 2025's most significant changes in how OTAs display and guests perceive pricing. Jamie Lane explains the transformation: "OTAs have moved to all-in pricing. Now, when guests search Airbnb or Vrbo, they see the total price—including cleaning, service, admin, booking, and damage waiver fees."

This change emerged from widespread consumer frustration. Social media platforms like TikTok and Instagram amplified complaints about hidden fees, where a $100 nightly rate ballooned to $500 after adding various fees. The OTAs discovered that displaying total prices upfront actually improves conversion rates, even if the sticker shock occurs earlier in the booking process.

For data providers and revenue management companies, this shift created significant technical challenges. Both AirDNA and PriceLabs had to adjust their data collection and analysis methods. Fortunately, AirDNA had always included cleaning fees in total revenue calculations, minimizing the impact on their core metrics. However, property managers must now ensure they understand competitors' fee structures when benchmarking rates.

Length-of-Stay Discounts and Benchmarking

Length-of-stay discounts add another layer of complexity to pricing and data analysis. When an audience member asked about tracking these discounts, both experts confirmed their systems capture this nuanced pricing data. The technical challenge is significant—a single date no longer has one price but multiple prices depending on the length of stay.

Jamie Lane provides insight into the benchmarking capabilities this enables: "You can look at any property manager and see... this competitor is doing 10%, this one's doing 20%, this one's doing 30% on weekly or monthly stays." This granular competitive intelligence helps property managers optimize their own discount strategies.

Length-of-stay trends have evolved significantly over the past five years. While the average stay remains around four days, this varies dramatically by market. Understanding local patterns helps property managers structure appropriate discounts to capture longer stays without unnecessarily reducing revenue from shorter bookings. The ability to benchmark competitors' strategies provides a roadmap for testing and optimizing discount structures.

Midterm Rental Trends and Market Shifts

Growth and Tracking of Midterm Rentals in 2025

Midterm rental trends 2025 reveal a small but growing segment that's becoming increasingly important in certain markets. Pedro Borges quantifies the current state: "Our last estimate was that 6% of Airbnb listings are midterm rentals." While this percentage seems modest, it understates the segment's strategic importance, particularly in markets facing short-term rental restrictions.

The real opportunity lies in blended strategies. Jamie Lane explains how successful operators adapt: "Successful managers blend both strategies, especially in markets with seasonal demand." Boston exemplifies this approach—capturing short-term rental demand from summer tourists, then pivoting to monthly rentals for healthcare workers and students during slower winter months.

Regulatory pressure accelerates the shift toward midterm rentals in major urban markets. New York, Denver, Los Angeles, and San Francisco have all implemented restrictions on short-term rentals. Surprisingly, these regulations haven't returned properties to the long-term rental market as policymakers intended. Lane notes that New York's Airbnb listings only dropped about 15% after the short-term rental ban, with many properties converting to 30+ day minimum stays rather than traditional leases.

Pricing and Operational Considerations

Midterm rentals require fundamentally different operational approaches. Pedro Borges emphasizes the pricing challenge: "For midterm rentals, daily price fluctuations don't make sense, since you're selling 30 days at a time." This shift demands new algorithms, data sources, and strategic thinking from both property managers and technology providers.

The ecosystem supporting midterm rentals continues developing. While Airbnb hosts some midterm inventory, specialized platforms like Furnished Finder (whose CEO Jamie recently interviewed for an upcoming podcast) serve specific segments like traveling healthcare professionals. Property Management Systems (PMSs) largely haven't adapted to midterm rental needs, creating operational challenges for managers trying to blend short and midterm strategies.

Revenue expectations must also adjust. Midterm rentals typically generate lower nightly rates than short-term rentals, but offer benefits like reduced turnover costs, more stable income, and less intensive guest management. For property managers facing margin pressure in the short-term rental market, midterm rentals can provide a more sustainable, if less lucrative, alternative.

2026 Outlook and Strategic Recommendations

Market Predictions for 2026

Looking ahead to 2026, both experts see continuation of 2025's themes rather than dramatic shifts. Pedro Borges offers a straightforward prediction: "2025 will be a very stable year, and 2026 will continue that trend." This stability might seem unremarkable, but it has profound implications for property manager strategies 2025 and beyond.

The competitive landscape will intensify as market share becomes the primary growth driver. Borges elaborates: "The competitive landscape will be all about market share." Without overall market growth to provide easy wins, property managers must actively take business from competitors. This zero-sum game rewards operational excellence, strategic thinking, and effective use of technology.

One potential demand catalyst for 2026 is the FIFA World Cup. Jamie Lane sees opportunity beyond the matches themselves: "The World Cup will matter next year—not so much for the soccer, but for the parties and the influx of travelers." Historical data supports this optimism—Americans drove more inbound demand to Qatar and Russia for previous World Cups than any other country, despite limited interest in soccer itself.

Strategic Advice for Property Managers

Success in 2026 requires a fundamental shift in growth strategies. Pedro Borges advises: "Focus on expanding revenue not through adding inventory, but by optimizing what you have." This optimization encompasses pricing strategies, operational efficiency, guest experience improvements, and cost management.

The profitability focus Jamie Lane advocates becomes even more critical as markets mature. Property managers must understand and communicate the full economic picture to property owners, including all expenses impacting cash flow. This transparency builds trust and ensures sustainable partnerships even as margins compress.

Technology adoption remains a key differentiator. With 40% of property managers still not using revenue management solutions, those who embrace data-driven tools gain significant competitive advantages. The gap between tech-enabled and traditional operators will likely widen in 2026, making technology investment increasingly critical for survival.

Adoption of Revenue Management Solutions

The surprisingly low adoption rates for revenue management solutions represent both a challenge and an opportunity. While estimates vary on exact percentages, all experts agree that too many property managers still rely on intuition and manual processes for pricing decisions.

Jamie Lane expresses amazement at the adoption gap: "For property managers with 20 or more listings, adoption is very high, but it's surprising that 40% still aren't using these tools." This suggests that while larger operators recognize the value of revenue management technology, many small to medium-sized managers haven't made the leap.

The benefits of revenue management adoption become more pronounced in stable markets where small optimizations drive meaningful results. As 2026 continues the trend of market stability and intense competition, property managers who haven't adopted revenue management solutions risk falling further behind tech-savvy competitors.

AirDNA's 2026 Forecast: Key Numbers

Jamie Lane's specific predictions for 2026 paint a challenging picture for property managers expecting easy growth. "Our outlook is for a 1% decline in occupancy, a 1.5% increase in ADR, and about half a percent growth in RevPAR." These numbers reflect expectations that supply growth will accelerate while demand struggles to keep pace.

Several factors could drive increased supply in 2026. Home values are moderating, interest rates are slowly declining, and revenues have stabilized at levels that make investment more attractive. Lane warns: "If supply outpaces demand, pricing power could erode further." This scenario would pressure margins even more, making operational efficiency and strategic differentiation essential for survival.

The inflation context makes these projections even more sobering. With inflation expected around 2.5%, the projected 0.5% RevPAR growth represents a real decline in purchasing power. Property managers must either grow inventory, improve efficiency, or find new revenue streams to maintain profitability. The easy growth years are definitively over, replaced by an era demanding strategic thinking, operational excellence, and smart use of technology to succeed.