STR Outlook 2025: Insights and Strategies for Thriving in the Year Ahead

A synthesis of trends to help your short-term rental business in 2025, whether you are just buying an airbnb or looking to scale your STR business

Last week, in my role as President of the Michigan Short-Term Rental Association (MiSTRA), I presented to a packed virtual audience on the 2025 STR landscape in Michigan. While preparing for that presentation, I started by diving into national trends—and I realized those insights are just as relevant to you, my national audience. So, let’s take a closer look at what’s shaping the short-term rental industry across the country in 2025.

Short on time? Here’s the Cliff Notes: For most of 2025, we’re looking at a steady market with minimal changes to average daily rates (ADRs) and occupancy levels. But don’t get too comfortable—understanding the trends shaping the industry is critical to staying ahead of the curve. While the first half of the year may seem like business as usual, the second half and beyond into 2026 are poised for shifts that could change the game. Its worth a deeper dive -

⚖️Rules, Regs, and High Emotions

Regulation continues to dominate the conversation, with stricter zoning, registration, and tax policies expected in 2025. Both state and local governments are actively exploring measures to address the growth of short-term rentals. According a KeyData survey, regulatory challenges remain top-of-mind for property managers, especially in high-demand urban and resort markets, a sentiment that had already been described in detail by Rent Responsibly earlier this year in their hallmark report.

The challenge? Many smaller communities are crafting regulations in response to emotions rather than data, leading to unintended consequences. Instead of conducting thorough analyses to determine how STRs fit into their local economies, some jurisdictions are implementing broad-brush policies to appease vocal critics. This often results in:

Restricting property rights for homeowners.
Hindering tourism-driven local commerce.
Exacerbating housing shortages by eliminating mid-term rental solutions.

For example, in 2024, regulatory changes in key markets such as New York and Miami revealed the economic strain that poorly planned regulations can impose—not just on STR operators, but on entire local economies reliant on tourism.

What can hosts do?

Stay Informed: Keep a close eye on proposed changes at the local and state levels. Early awareness allows you to mobilize and advocate effectively.
Engage: Join or support organizations like Rent Responsibly or your local STR associations. If there isn’t one in your area, consider starting one! Even just a virtual group (like a Facebook group) can be a valuable source of information sharing and connection
Show Your Value: Be prepared to articulate the economic benefits your property brings, such as job creation, local spending, and tax revenue.

And remember: Stay cool, calm, and collected. As Daniela Vare said, “Diplomacy is the art of letting someone have your way.” Advocacy is a negotiation, not a battleground.

▶️Buyer Beware: If you’re planning to purchase a new STR property, do your homework on the local regulatory environment. Don’t rely solely on your realtor—dig deeper to understand what’s at stake or risk being the next headline.

While the regulatory landscape may seem unpredictable, proactive and engaged hosts will always be better positioned to navigate these challenges.

The Tech Stack and Algorithm Hacks🦾

Technology isn’t optional anymore. Whether you’re a new host or a seasoned pro, leveraging technology is essential to staying competitive in 2025.

AI and automation tools are transforming everything—from how you communicate with guests to how booking platforms decide whether your listing gets seen or buried. According to KeyData, smaller property managers are leading the charge in adopting new tech tools, especially those focused on pricing optimization and marketing.

Your Tech Stack

With a growing number of tools available, it’s easy to get overwhelmed. The key is to build a lean, effective tech stack. Before adding a new tool, ask:

What’s the ROI? Will it improve your revenue or guest satisfaction?
Is It Essential? Does it address a pressing problem, or is it a “nice-to-have”?
What’s the Learning Curve? How much time will it take to implement and master?

Pro Tip: Many tools repackage or “white label” data from other sources. Evaluate tools critically to ensure they offer unique value.

Newbie? Start with a booking platform. It's built with everything you need. You don't need a bunch of tools to get started, and some folks never go beyond the platform.

Algorithm Hacks

Platforms like Airbnb and Vrbo rely heavily on AI to pair guest search behaviors with listings. Your visibility in search results depends largely on how well your listing aligns with keywords and guest preferences.

Keyword Optimization: Use targeted terms that both capture the prime reason guests travel to your area and the key attributes that will attract specific audiences like "family getaway" or "fishing cabin" or "romantic getaway"
AI Insights: Tools like ChatGPT can help refine your descriptions or analyze competitor listings for inspiration.
Regular Updates: Algorithms evolve. Revisit your keywords regularly to stay ahead of market trends.

🧳The 2025 Traveler

Travelers in 2025 are more discerning than ever, with shifting demographics and rising expectations driving new trends. As the travel economy is now 45% Millennial and Gen Z, it stands to reason these trends will continue to shift. Hosts who adapt to these changes will remain relevant—and profitable.

What Travelers Want in 2025

Eco-Conscious Accommodations: Guests are increasingly drawn to properties with sustainable practices, such as energy-efficient appliances, solar panels, and eco-friendly toiletries.
- Actionable Tip: Feature your green efforts prominently in your listing photos and descriptions.
Pet-Friendly Options: Families and solo travelers alike are seeking pet-friendly stays. Properties with fenced yards, pet beds, and thoughtful touches for furry friends will stand out.
- Actionable Tip: Highlight these features and include clear policies to attract pet-owning travelers.
Luxury Stays: Demand for properties priced at $1,000+/night grew significantly in 2024, and this trend shows no signs of slowing.
- Actionable Tip: Showcase premium amenities like private pools, hot tubs, or gourmet kitchens in your photos.
Experiential Travel: Guests want properties that enhance their activities—whether that’s hiking, attending sports events, or cultural immersion.
- Actionable Tip: Include an area guide with recommendations for local attractions.

2024 also saw a rise in solo travel and sports tourism, offering opportunities to target these niche markets.

Flatlined Numbers, Big Opportunities📈

While ADRs and occupancy rates are stabilizing after years of volatility, there’s still plenty of opportunity to grow your revenue. AirDNA reports that a mix shift in property types—such as high-end listings—has been driving ADR growth.

Strategies for Growth:

Diversify Your Offerings: Consider expanding into mid-term rentals or creating niche experiences like wellness retreats or family-focused stays.
Invest Strategically: Use ROI-driven metrics to determine whether a new amenity, such as a hot tub or game room, will generate returns.
Leverage AI: Make sure your listing is getting seen by your target audience (see above for more on keywords)
Keep scouting: The trend for remote, off-the-beaten path experiences continues to be strong in STR and travel overall.

For example, Midwest markets, which focus on affordability and rural appeal, are seeing optimistic projections for occupancy growth, while luxury urban markets remain strong.

The Bottom Line

The STR industry in 2025 is entering a phase of stabilization, but that doesn’t mean it’s time to sit back. The hosts who succeed will be those who stay informed, adopt the right tools, and adapt to the needs of today’s travelers.

What are you focusing on in 2025? Join us over at STR Success to discuss your 2025 STR business goals and the opportunities you see in your business to optimize revenue.

This report was informed by AirDNA 2025 Outlook, KeyData 2025 Outlook, Lighthouse 2025 Outlook Forbes Travel Trends Series

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Hey Boss! I'm Kate, owner/founder of The CEO Host. If you are interested in taking a leap into short-term rentals - or have some questions about your existing business, my goal - passion, and career, is to help YOU succeed. I've coached hundreds of folks getting started or looking to optimize, analyzed more deals (and duds) than I could count, completed thousands of hours of education and training, attended conferences... So don't be shy. A good CEO knows to bring in expert help - and that's what I'm here for! Lets HOP ON A CALL and chat!

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