Lessons from TouchStay's Short-term Rental Industry Trends Guide 2025

strofsanantonio
Oct 31
4 min read

The short-term rental (STR) industry is entering another year of transformation. From AI-driven pricing and new regulations to longer stays and sustainability expectations, 2025 will test how adaptable hosts can be — especially in the U.S. market, where growth remains strong but operating costs and compliance pressures continue to rise.

Here’s what the data says — and what it means for you as a U.S. host.

U.S. Market Outlook: Strong Demand, New Headwinds

According to AirDNA’s 2025 Outlook Report, the global STR market is projected to reach $256 billion by 2030, growing at more than 11% annually. North America continues to lead that charge, with a projected 7.5% growth rate in 2025.

But the nature of travel is shifting:

Domestic bookings dominate, representing 67% of stays, up from 58% in 2019.
Extended stays are up 20% since 2020, with one in three bookings lasting 28 days or longer.
Urban occupancy is nearly back to pre-pandemic levels (85%), signaling a strong rebound for city hosts.
Despite this growth, U.S. operators face rising operational costs (up 15–20%) and increased regulation in cities like New York, San Francisco, and Los Angeles — where STR caps, licensing requirements, and data-sharing mandates are now standard.

The Rise of AI-Driven Hosting

Artificial intelligence has become a defining force in the STR industry, helping hosts automate repetitive tasks and increase revenue.

Recent industry data shows:

67% of travelers now expect AI-assisted services.
Chatbots handle 80% of guest questions within seconds.
Listings using AI pricing optimization tools report up to 35% revenue growth.

For U.S. hosts, this means less time spent manually adjusting rates or replying to the same pre-check-in questions — and more time focusing on guest experience. AI tools are also being used for predictive maintenance, alerting operators when appliances are due for repair before they break, reducing both downtime and bad reviews.

In short: automation isn’t replacing hospitality — it’s amplifying it.

Regulations: Complexity Is the New Normal

If there’s one constant across the U.S. market, it’s regulatory uncertainty.

New York City’s Local Law 18 has sharply limited short-term stays to protect housing stock.

San Francisco continues to enforce strict licensing and tax collection standards.

Other cities, like Austin and Denver, are tightening enforcement of caps and safety requirements.

Across the board, the trend is clear: more oversight, more reporting, and less room for gray areas.

Hosts who survive — and thrive — will be those who:
Stay informed on local ordinances.
Maintain full compliance documentation.
Join advocacy groups (such as STRASA, TXSTRA, and Rent Responsibly) that represent host interests at the city and state level.

Sustainability: Guests Are Paying Attention

Sustainability isn’t just a buzzword anymore; it’s a booking factor.

According to the report:

Properties with eco-certifications such as LEED or Green Key see a 20% boost in bookings.
Smart energy devices and solar solutions are cutting operational costs by up to 30%.
Guests increasingly expect recycling, refillable toiletries, and locally sourced amenities.

A standout case study cited a glamping site in Oregon that added solar-powered cabins and rainwater collection — reducing utilities by 25% and attracting eco-conscious travelers year-round.

For hosts, the message is simple: guests reward responsibility. Even small gestures, like providing a recycling bin or highlighting local farmers’ markets, strengthen your brand and reviews.

Direct Bookings: Taking Back Control

While Airbnb and Vrbo remain vital for visibility, platform dependency continues to eat into margins. With 15–20% of revenue lost to service fees, direct bookings are becoming the fastest path to profitability.

Direct channels offer:

Higher net income by avoiding commissions.
Stronger guest relationships through personalized communication.
Full control over your brand and policies.

For U.S. hosts, this may mean building a simple booking website, setting up an email list for repeat guests, or using social media to promote direct reservations. Even small efforts — like offering a loyalty discount or referral bonus — can make a measurable difference.

Data-Driven Pricing and Analytics

Revenue management is no longer just for hotels. In today’s competitive market, successful hosts rely on dynamic pricing tools such as PriceLabs, Wheelhouse, or Beyond to analyze demand, occupancy, and competitor rates.

Key metrics to watch:

ADR (Average Daily Rate) – your average income per night sold.
RevPAR (Revenue per Available Room) – your income per available night, including unsold ones.
Occupancy Rate – how often your calendar is booked.
Lead Time – how far in advance guests are booking.

The combination of these numbers tells a story about your market position — and how to adjust rates, stay minimums, or promotions to stay profitable.

Predictions for 2025 and Beyond

Industry experts anticipate:

85% of operators will use AI tools for revenue management.

Eco-certified properties will see up to 25% higher occupancy.

Data-driven operations will be the main separator between profitable and struggling hosts.

As consultant Vanessa de Souza summarized:

“Sustainability is no longer a ‘nice-to-have’ — it’s a necessity for attracting modern travelers.”

How U.S. Hosts Can Stay Ahead

Invest in tech that saves time and lifts profit.

Automate guest communication, pricing, and maintenance reminders.

Prioritize sustainability and transparency.

Guests notice — and reward — hosts who act responsibly.

Build your own audience.

Encourage repeat bookings and direct relationships with guests.

Stay compliant.

Know your local rules before city enforcement finds you.

Let data drive your decisions.

Use occupancy, ADR, and RevPAR metrics to guide your pricing strategy — not emotion.

The Bottom Line

The U.S. short-term rental market remains strong and resilient — but it’s also maturing. As regulations tighten and guest expectations evolve, hosts who blend technology, professionalism, and local authenticity will rise to the top.

The future belongs to those who run their rentals like businesses, not hobbies.

Download the full TouchStay report here: https://touchstay.com/str-report-2025