This article was written by our expert who is surveying the industry and constantly updating the business plan for a short-term rental.
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Below is a practical, numbers-first overview of vacation rental (short-term rental) trends as of October 2025.
You will see clear benchmarks for market size, growth, occupancy, ADR, RevPAR, channel mix, guest behavior, technology, regulation, length of stay, and the 3–5 year outlook—so you can make quick decisions for your short-term rental business.
If you want to dig deeper and learn more, you can download our business plan for a short-term rental. Also, before launching, get all the profit, revenue, and cost breakdowns you need for complete clarity with our short-term rental financial forecast.
The global vacation rental market in 2025 is roughly $98–$108 billion, up strongly from 2020, with Asia-Pacific leading growth and Europe remaining the largest region by value. Professional management now controls a clear majority of listings, ADRs and RevPARs vary widely by region and property type, and direct bookings are gaining share alongside OTA dominance.
Operators who pair dynamic pricing, professional operations, and high-demand amenities (Wi-Fi, pools, pet-friendly, sustainability) are capturing above-market occupancy and revenue, while regulations and supply growth create sharper winners and losers across cities.
| Indicator (Oct 2025) | Global Benchmark / Range | Operator Takeaway |
|---|---|---|
| Market Size (2025) | $98–$108B revenue | Plan for steady demand with regional dispersion; allocate growth budget to faster-growing APAC and permissive markets. |
| 5-Year Growth (2020→2025) | ~3.4%–~10% CAGR by source | Expect normalization after the post-pandemic rebound; rely on local drivers (events, airlift, regulation). |
| Fastest Growth Regions | APAC; parts of LATAM, MENA, Africa | Target digital-nomad hubs and resort corridors; monitor visa/tax and infrastructure improvements. |
| Pro vs. Individual Hosts | ~73% professional management | Scale, consistency, and compliance favor professionalization; invest in SOPs and tech stack. |
| Occupancy | 50–70% in peak leisure; urban varies | Win via seasonal yield, minimum-stay logic, and lead-time tactics; benchmark against local hotels. |
| ADR / RevPAR | US ADR ≈ $370; RevPAR often $120–$188+ | Premium amenities and branding justify rate; dynamic pricing protects RevPAR in shoulder seasons. |
| Booking Mix | OTAs dominate; direct share rising | Build direct: website + CRM + repeat offers; keep OTA visibility for demand capture. |
| Length of Stay (LOS) | Urban: 2–6 nights; Leisure: 7–31 nights | Shape LOS with minimums and discounts; court mid-term stays where regulation allows. |
How big is the vacation rental market now, and how did it change in five years?
The global short-term rental market in 2025 is around $98–$108 billion, up materially from 2020.
Across credible sources, five-year growth ranges from roughly 3.4% to nearly 10% CAGR depending on scope and methodology. The user base is approaching ~900 million and is tracking toward 1.1 billion by 2029, indicating durable demand for short-term rental stays.
Most regions recovered beyond 2019 levels by 2023–2024, with supply expansion and normalized travel patterns replacing the earlier rebound spike. Forward views commonly point to $130B+ by 2030–2034 as inventory professionalizes and pricing tools improve.
Set your revenue targets with local comparables and seasonality rather than only global averages; absolute size matters less than your city-level demand drivers.
You’ll find detailed market insights in our short-term rental business plan, updated every quarter.
Which regions and countries are growing fastest, and why?
Asia-Pacific is the fastest-growing region, with strong corridors in Southeast Asia, Japan, and Australia.
Growth is propelled by expanding middle-class travel, digital adoption, improved connectivity, and increasingly friendly policies for digital nomads in select countries. Parts of Latin America, MENA, and Africa also show rapid urban and resort-area growth as supply catches up with demand.
| Region | Notable Countries / Cities | Key Growth Drivers in Short-Term Rentals (2024–2025) |
|---|---|---|
| Asia-Pacific | Thailand, Japan, Australia, Malaysia, Indonesia | Middle-class tourism, digital-nomad visas, improved airlift, strong resort demand, rising domestic travel. |
| Latin America | Buenos Aires, Rio de Janeiro, Mexico beach markets | Currency arbitrage for inbound travelers, remote-work stays, rapid supply additions in leisure zones. |
| MENA | Dubai, Red Sea developments | High-end leisure investment, events calendar, infrastructure and hospitality mega-projects. |
| Africa | Marrakesh, Nairobi, Cape Town | Experiential travel, safari/eco offerings, improving connectivity and professional management entrants. |
| Europe | Spain, Portugal, Italy, France | Largest regional value base; pockets of growth despite stricter city rules; strong coastal and island demand. |
| North America | US Sunbelt, Mountain West, Canada’s resort towns | Stable leisure demand, event-driven peaks, normalization post-surge; regulatory patchwork creates variance. |
| Oceania | Queensland, New Zealand South Island | Adventure and nature-led itineraries; premium ADR potential in resort and rural hotspots. |
How much inventory is managed by professionals versus individual hosts, and how is this shifting?
Professional managers now operate the majority of short-term rental listings worldwide.
About 73% of units are professionally managed in 2025, and that share is inching up as compliance, guest expectations, and tech complexity reward scale. Markets with heavier regulation (e.g., parts of the US and Europe) are seeing faster professionalization than lightly regulated leisure zones.
| Region | 2020 → 2025 Shift (Pro % of Units) | Implications for New Operators |
|---|---|---|
| North America | ~55–60% → ~70%+ | Expect stronger SOPs and branded ops; individual hosts need niche positioning and superior service. |
| Europe | ~60–65% → ~75%+ | Compliance burden and city caps favor pros; lean into partnerships or franchise-style platforms. |
| APAC | ~40–50% → ~60–70% | Fast growth invites pro entrants; quality standards and local partners become decisive. |
| LATAM | ~35–45% → ~55–65% | Room for consolidation; focus on trust, security, and bilingual guest support. |
| MENA / Africa | ~30–40% → ~50–60% | Early-stage systems win; invest in training, check-in tech, and local compliance counsel. |
| Global | ~50–55% → ~73% | Professionalization raises bar on cleanliness, responsiveness, and amenity mix. |
| Action | — | Document SOPs, invest in PMS + dynamic pricing, and audit compliance quarterly. |
What are current occupancy benchmarks by region and season, and how do they compare to hotels?
Peak-season leisure destinations commonly reach 50–70% occupancy for short-term rentals, with urban variability outside holidays.
In the US, occupancy has softened with supply growth, averaging in the mid-20s overall but climbing to 35–40% in major holiday weeks; many leisure sub-markets materially outperform that average. In select top international destinations (e.g., Thai beach markets), short-term rentals can meet or exceed local hotel occupancy in high season.
| Region / Season | Vacation Rental Occupancy (Typical Range) | Hotel Comparison / Notes |
|---|---|---|
| US – Annual Average | ~23–24% headline; 35–40% in peak weeks | Supply growth dilutes averages; sub-markets vary widely vs. hotels by event and season. |
| US – Beach/Mountain Peak | 50–70%+ during summer/winter holidays | Often competitive with hotels; ADR/RevPAR hinge on unit quality and proximity. |
| Europe – Summer | 55–70%+ in coastal/island markets | Hotels also strong; city caps shift demand to compliant rentals nearby. |
| APAC – High Season | 50–70% in Bangkok/Phuket/Chiang Mai zones | Comparable to hotels in peaks; shoulder seasons reward pricing agility. |
| LATAM – Resort Peaks | 50–65% typical peaks | Event calendars and currency effects drive spikes; hotels mirror patterns. |
| MENA – Dubai High | 50–65% depending on segment | Premium rentals track hotel peaks; expo/events create outliers. |
| Africa – Safari/Coastal | 45–60% with seasonal surges | Hotels strong on tours; rentals win with unique homes and experiences. |
What are the latest ADR and RevPAR figures by region and property type?
ADRs and RevPARs are highly local, but current global patterns are clear enough to guide pricing.
US leisure ADRs average around $370 per night; RevPARs frequently land between $120–$188, with top assets exceeding these bands. Key Asian cities often range $120–$180 ADR, while luxury and resort villas command materially higher rates and stronger occupancy.
| Region / Property Type | Typical ADR (USD) | Typical RevPAR (USD) & Notes |
|---|---|---|
| US – Urban Apartments | $160–$260 | $60–$120; sensitive to events and mid-week softness; branding helps defend rate. |
| US – Leisure Homes | $280–$450 | $120–$188+; strong holiday peaks; pools/hot tubs lift yield. |
| APAC – City Condos | $120–$180 | $60–$110; price to shoulder seasons; proximity and transit matter. |
| EU – Coastal Villas | $300–$600+ | $140–$250+; long summer stays; strict caps limit supply and support rate. |
| LATAM – Beach Houses | $150–$300 | $70–$150; currency shifts boost inbound demand; security and services add value. |
| MENA – Premium Units | $250–$500+ | $120–$220+; event-driven compression; high service expectations. |
| Africa – Safari/Coast | $180–$400 | $90–$200; experience-led packaging (tours, chefs) increases RevPAR. |
Which booking channels hold the most share, and how is direct booking changing?
- Online travel agencies (Airbnb, Booking.com, Vrbo, Tripadvisor) still capture the majority of reservations globally.
- Direct booking share is rising due to better PMS/CRM tools, email remarketing, and loyalty offers for repeat guests.
- Operators report improved margins and control via direct channels, especially for longer stays and returning families.
- Meta search and brand sites convert best when paired with dynamic pricing, best-rate guarantees, and transparent fees.
- Maintain OTA presence for demand capture, but actively migrate repeat guests to your website over time.
Who is traveling now, and how are preferences changing?
- Millennials and younger Gen-X are the most active bookers of short-term rentals, often organizing multi-family or group trips.
- Flexible and longer stays have normalized; “bleisure” and digital-nomad segments continue to drive mid-term bookings.
- Travelers value fast Wi-Fi, self check-in, clean design, outdoor space, and pet-friendliness more than before 2020.
- Sustainability signals (efficient appliances, local materials) and wellness add-ons influence rate acceptance.
- Clear pricing and fair cleaning fees reduce cart abandonment and boost conversion on direct sites.
Which property types and amenities are in highest demand?
- Entire homes and full apartments dominate short-term rental revenue, comfortably above 48% of market share.
- Amenities that lift occupancy and ADR include private pools/hot tubs, EV charging, and hotel-grade linens.
- Smart work features—ergonomic desk, 27” monitor, 200+ Mbps Wi-Fi—support mid-term remote-work stays.
- Pet-friendly policies expand the addressable market and drive repeat bookings at modest incremental cost.
- Sustainable features and wellness/experience packages (chef, yoga, tours) increase guest satisfaction and reviews.
This is one of the strategies explained in our short-term rental business plan.
What role do technologies like dynamic pricing, smart homes, and AI guest services play?
Technology is now a core profit lever for short-term rentals, not a nice-to-have.
Operators using AI-driven pricing and inventory controls typically post higher revenue, better occupancy smoothing, and tighter cancellation handling. Smart-home stacks—keyless access, noise monitoring, energy controls—reduce damage, utility costs, and check-in friction.
Guest-facing AI (chat, guidebooks, upsell flows) raises satisfaction and drives ancillary revenue while cutting support workload. Compliance and marketing workflows also benefit from automation, especially at 10+ units.
Standardize on a PMS, dynamic pricing tool, and automated messaging on day one; add integrations for housekeeping, maintenance, and review management as you scale.
We cover this exact topic in the short-term rental business plan.
How are regulations and government policies affecting short-term rentals, and what’s new?
Rules are tightening in many major cities, while other destinations remain permissive and growth-friendly.
New York, Paris, Barcelona, and Amsterdam enforce licensing/registration, caps on short stays, and strict taxation, reshaping the supply map. Meanwhile, more permissive markets in parts of Thailand, South Africa, and resort corridors are attracting capital and operators.
Local compliance directly impacts profitability, channel strategy, and achievable LOS—often more than macro demand. Always underwrite city-level risk: zoning class, HOA rules, and transient occupancy tax policy can change on short notice.
Maintain a compliance calendar and retain local counsel; treat permits, tax filings, and safety equipment as non-negotiables.
It’s a key part of what we outline in the short-term rental business plan.
What are the current trends in average length of stay (LOS) across urban and leisure markets?
Urban markets skew shorter, while leisure and rural markets skew longer.
Urban LOS typically sits at 2–6 nights outside of special events, though many cities see a rising 8–30-night mid-term segment from remote workers. Leisure and rural destinations commonly average 7–31 days, especially where villas and family-sized homes are prevalent.
Shape LOS with minimums and progressive discounts that protect weekends while filling weekdays. Use mid-term strategies (utilities caps, monthly cleaning cadence, professional contracts) only where regulations allow.
Track LOS by season and lead time; most gains come from better minimum-stay logic plus price fences for different trip purposes.
Get expert guidance and actionable steps inside our short-term rental business plan.
What forecasts exist for the next 3–5 years on revenue, consolidation, and competition?
Most forecasts point to continued growth with more professionalization and sharper competitive dynamics.
Revenue growth projections vary by source and region, but commonly imply a path toward $130–$135B by 2030–2034, supported by better tech, broader adoption, and normalized travel flows. Consolidation will continue as regulations raise compliance costs and as multi-market brands compete on consistency and service.
Competitive edges will come from branded quality, transparent pricing, direct-booking ecosystems, and sustainable operations. Expect OTAs to retain scale while direct channels and loyalty programs absorb an increasing share of repeats.
Build a 36-month plan that layers pricing science, amenity upgrades, and channel diversification over a strict compliance base.
This is one of the many elements we break down in the short-term rental business plan.
Which regions and seasons lead revenue performance when adjusted for property type?
Leisure destinations with family-sized homes and pools command the highest blended revenue through peak seasons.
Urban stock relies more on events and business travel, so pacing and lead-time pricing are critical to protect RevPAR. Resorts with limited new supply and strong airlift maintain pricing power longer into shoulder months.
Use a segmented pricing plan by bedroom count, amenity set, and stay length to optimize mixed portfolios. Monitor local hotel compression to time price moves ahead of peak demand.
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What operational practices consistently move the needle in this industry?
Standard operating procedures, fast maintenance turnaround, and pro-grade cleaning drive reviews and repeat bookings.
Self check-in, accurate listings, same-day gap-night pricing, and high-speed internet raise conversion and reduce support friction. House rules and deposit logic, paired with noise monitoring and insurance, lower risk while keeping guest satisfaction high.
Track KPIs weekly: occupancy, ADR, RevPAR, booking window, channel mix, and 5-star rate—then adjust prices and policies accordingly. Systematize vendor SLAs and inventory audits to maintain standards at scale.
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What channel tactics should a new operator use in the first year?
Launch on 1–2 major OTAs plus a simple direct site, then build email and repeat offers quickly.
Use OTA visibility to seed demand and reviews while running meta and brand search for your name; capture emails with a tasteful lead magnet and offer repeat discounts for direct. Add a best-rate guarantee and transparent fee structure to lift conversion.
Audit listing photos quarterly and A/B test titles; keep calendars and minimums tuned to events and school breaks. Bring housekeeping scheduling and linen PARs into your PMS to prevent turn-day failures.
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How do amenities and design choices influence pricing and competition locally?
Market-proven amenities directly support higher ADR and RevPAR.
In most city and leisure markets, Wi-Fi speed, workstation, parking, pet-friendliness, outdoor space, and pools/hot tubs drive rate acceptance and occupancy. Sustainable touches and premium bedding also improve review velocity and reduce discounting pressure.
Document your amenity ROIs (cost vs. ADR lift vs. occupancy change) and reinvest in the winners each quarter. Stage for photography and keep a replacement reserve for the top 10 guest-touch items.
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Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.
Want to keep learning about short-term rentals?
Explore step-by-step planning, pricing, budgeting, and profitability tactics tailored to vacation rentals.
Sources
- Precedence Research – Vacation Rental Market
- StayFi – Vacation Rental Statistics (2025)
- Mordor Intelligence – Vacation Rental Market
- Hotel News Resource – Market Trends
- Grand View Research – Vacation Rental Market
- Fortune Business Insights – Vacation Rentals Market
- Statista – Vacation Rentals Worldwide Outlook
- Statista – Vacation Rentals Thailand
- AirDNA – Fastest-Growing STR Markets
- Key Data Dashboard – Industry Outlook 2025
-Holiday Let Business Plan: Step-by-Step Guide
-Short-Term Rental Business Plan: How to Start
-Budget Template for Short-Term Rentals (Free Tool)
-Short-Term Rental Recovery Time: What to Expect
-Furnishing & Amenities Budget for STRs
-How to Improve Short-Term Rental Occupancy
-Setting Fair Cleaning Fees in STRs
-Short-Term Rental Profit Margins Explained
-Calculate Your Short-Term Rental Break-Even
-Pricing Strategy for Short-Term Rentals
-Is Airbnb Still Worth It in 2025?