Key Takeaways from AirDNA’s Outlook Report

We Read and Summarized AirDNA's Report So You Don’t Have To

The short-term rental (STR) market is changing—and if you’re a host or property manager, you need to know where it’s headed. AirDNA’s latest 2025 STR Outlook Report reveals key trends shaping the industry. We’ve broken it down for you into bite-sized insights so you can stay ahead of the curve.

2024: A Recovery Year

Occupancy Levels Stabilized: After a rocky couple of years, occupancy rates have steadied, creeping closer to pre-pandemic norms. RevPAR (Revenue per Available Rental) is finally trending up.
Demand Outpaced Supply: Demand for STRs grew by 7% year-over-year, while the supply of new listings slowed, helping balance the market.
Rates Are Up: Hosts regained control over pricing, with Average Daily Rates (ADR) climbing past inflation and reversing the dips seen in 2023.

What are their predictions for 2025?

Occupancy Boost: Projections show occupancy rates could hit 56% by the end of 2025, thanks to modest supply growth and consistent demand.

Stable Demand: While 2024 saw rapid growth, demand is expected to normalize, supported by a strong economy and rising incomes.

Market-Specific Trends in Demand and Occupancy Recovery

The demand recovery that surged in early 2024 is expected to stabilize in 2025, with notable trends across different market types:

Small City/Rural Markets: These have seen significant growth and are likely to reach their peak by late 2024 or early 2025.
Mid-Size Cities: Demand here is expected to plateau around the same time as Small City/Rural markets.
Urban Markets: Urban demand is projected to increase, provided no major regulatory events disrupt the market.
Destination/Resort Locations: These markets are often the first to benefit from favorable economic conditions, with growth acceleration expected to begin in 2026.

Economic Influences

Interest Rates and Inflation: High interest rates will continue to constrain housing transactions and supply growth through mid-2025, while inflation is expected to remain slightly above the Federal Reserve’s 2% target.
Improved Consumer Confidence: Rising real incomes, driven by a strong economy and fiscal stimulus, are boosting traveler confidence and willingness to spend on STRs.

Market Dynamics

Slowing Supply Growth: Supply growth is projected to decelerate further in 2025 before stabilizing in 2026, reflecting the ongoing effects of high interest rates and elevated housing prices.
Mix Shift Impacts Pricing: Larger, higher-priced listings are entering the market, driving ADR growth. However, this trend also means that the RRI, which tracks pricing changes for existing listings, underperforms due to the addition of premium properties.

Why This Matters for You

For hosts, understanding these trends can help you make informed decisions about pricing strategies, occupancy goals, and long-term investments. With occupancy and demand stabilizing, now is the time to focus on enhancing guest experiences and optimizing your property listings.

Want to dive deeper? Check out the full AirDNA Outlook Report here.

Looking for help navigating these trends? Host & Stay specializes in optimizing short-term rental listings to boost bookings and revenue. Let’s chat about how we can take your property to the next level—reach out here.

What’s Next for Short-Term Rentals in 2025?