2026 Short Term Rental Market Outlook

What the latest market data, regulation changes, and travel forecasts mean for the people who own vacation homes in 2026.

The short-term rental industry spent most of the last five years swinging from one extreme to the other. After the pandemic-era boom, the post-boom correction, and a stretch where supply was growing faster than demand could keep up, 2026 is finally shaping up to be a steadier year. Not flat. Not exploding. Steady.

A steadier market means the gap between properties that are run well and properties that are run on autopilot is going to be the widest it has been in years. The people who built habits during the easy years are about to find out which ones still work. The people who treat their vacation home like the small business it actually is are going to do just fine.

This piece looks at where the U.S. short-term rental market sits heading into 2026 and into the rest of the year: the numbers, the markets that are winning, the amenities that are pulling premiums, the regulation changes that have already landed and the ones that are coming, and what all of it means if you own a property and want it to perform.

The state of the U.S. short-term rental market in 2026

Three things define the 2026 market:

1. Supply growth has slowed sharply
2. Demand growth has leveled out to a healthy pace
3. Average daily rates are creeping back up.

U.S. listings are projected to grow by 4.6% in 2026, with average daily rates (ADR) up about 1.5% and occupancy easing roughly 1% while the market continues to find its footing. That 4.6% supply growth figure is the key number. To put it in context, supply was growing at roughly 20% per year at the 2021 and 2022 peak. The slowdown is not a sign that the industry is shrinking. It is a sign that the easy money phase is over and that new listings are entering at a rate the market can actually absorb.

Two other signals are worth paying attention to. The first is the general travel forecast. According to the U.S. Travel Association’s Spring 2026 forecast, total U.S. travel spending will hit $1.37 trillion in 2026 and $1.42 trillion in 2027 in inflation-adjusted dollars, with domestic travel accounting for 87% of the total. Domestic leisure travel, the segment that matters most for vacation rentals, is the only major travel segment to have exceeded pre-pandemic spending in real terms and is projected to reach $909 billion in 2026. The travelers who fill vacation homes are still traveling. They are just being more selective about where they go and what they pay for.

The second signal is on the supply side. After years of exponential listing growth, the rate of new properties hitting the market has dropped to a level consistent with the rate of new household formation and second-home demand. That is exactly what a maturing market is supposed to do. The properties that remain are increasingly run by people who treat this as a real business, not a side hustle.

Two other forces are impacting the math for new buyers. On the federal side, the One Big Beautiful Bill Act, signed into law on July 4, 2025, permanently restored 100% bonus depreciation for qualifying property placed in service after January 19, 2025. For short-term rental owners, that means assets like furniture, appliances, and certain improvements can be deducted in the first year rather than depreciated over decades. Treasury and the IRS issued interim guidance in early 2026 (Notice 2026-11) clarifying how the rules apply. This single change has shifted the underwriting math for new acquisitions enough that several short term rental economists from AirDNA, CBRE Hotels Research, and others are calling 2026 the best year to invest in short-term rentals since 2021.

While federal regulations are making vacation rental ownership more attractive, it’s getting more expensive to become an STR owner. Insurance premiums in coastal and wildfire-exposed markets have climbed sharply. Cleaning labor costs have tracked general wage inflation. Property tax assessments in popular vacation markets have caught up to recent home value gains. The properties making good money are those that have either raised rates to keep pace, optimized their operations, found more efficient management, or any combination of all three.

How short-term rentals stack up against the U.S. hotel industry in 2026

One way to sanity-check the short-term rental outlook is to compare it against the U.S. hotel industry. Both compete for the same lodging dollar, and the hotel side produces its own well-respected market forecast each quarter. The 2026 picture lines up better for short-term rentals than it does for hotels, but the gap is narrower than it has been in recent years.

The CoStar and Tourism Economics U.S. hotel forecast, released in late January 2026, projects full-year RevPAR growth of just 0.6%, with ADR growth of 1.0% and occupancy easing to 62.1%. Those are some of the slowest growth rates the hospitality industry has seen outside of a recession. The forecast follows a turbulent 2025 in which hotel revenue per available room actually fell 0.3%, the first non-recessionary RevPAR decline ever recorded in the U.S. hotel industry. The hotel forecast has been downgraded multiple times over the past year as the macroeconomic environment proved softer than expected, with the November 2025 revision lowering 2026 RevPAR, ADR, and occupancy projections together before a small upgrade in January.

Tourism Economics expects international inbound travel to the United States to rebound 3.7% next year, with about 1.1% of that growth attributable to World Cup lift. The hotel forecast attributes a full-year 0.4% RevPAR lift to the World Cup, with the impact concentrated in host markets. Hotel supply growth has been pulled back to roughly 0.7%, the slowest pace in a decade, as construction starts have lagged behind rising financing costs.

The short-term rental outlook is comparable, but with two important differences. First, ADR growth in the short-term rental sector is projected modestly higher than in hotels (1.5% vs 1.0%). Second, the underlying demand drivers in vacation rental destinations are less tied to business travel, which is the segment that has weighed hardest on hotel performance. Domestic leisure, which is the foundation of vacation rental demand, has been the only major travel segment to exceed pre-pandemic spending in real terms. Occupancy growth on the short-term rental side is forecast to ease by about 1%, similar to the hotel pattern but showing the same supply-and-demand normalization rather than weakening underlying demand.

The hotel benchmark also offers a useful reality check on interest rates and real estate dynamics. Hotel construction has slowed because financing costs make new builds harder to finance. The same forces apply to short-term rental property acquisitions, and they are part of why supply growth has slowed so meaningfully. Properties that work at current interest rates are working because of strong demand fundamentals, not because of the ability to borrow cheaply.

Where the STR market is heading in 2026

Talking about a national short-term rental market is a little like talking about national weather. It misses what is actually happening on the ground. The market type a property sits in matters far more than the national average in almost every case, and the performance gap between market types in 2026 is wider than it has been in years.

Mountain and ski markets

Mountain markets remain some of the most consistent performers in the country. They benefit from a two-season demand pattern (winter ski and summer hiking and outdoor recreation), strong second-home ownership, and supply that is genuinely constrained by buildable land. The strongest mountain markets are also among the most regulated, which protects existing licensed owners but raises the bar to entry for new buyers significantly.

The dynamic to watch in mountain markets is the split between properties inside resort overlay zones, where short-term rentals are explicitly permitted and new licenses are still available, and properties in surrounding residential neighborhoods, where many jurisdictions have capped licenses by zone and run waitlists for new permits. STR licenses themselves are generally not transferable when a property sells, so the new owner has to apply and start at the bottom of the list. In capped zones, that often means joining a multi-year waitlist before any rental income is possible, which is why properties in resort overlay zones command a meaningful premium over otherwise comparable homes a few blocks away.

The significant lack of snow in winter 2025/2026 hit ski markets hard, with several areas down 50% or more in bookings year over year. Strong summer and fall demand should help boost occupancy and see pre-bookings for the coming winter.

Beach and coastal markets

Coastal markets are projected to be among the strongest performers in 2026. The combination of family travel demand, multi-generational group trips, and consistent year-round draw (especially in the Gulf and southern Atlantic) keeps occupancy strong. Florida benefits from state preemption that prevents cities and counties from banning short-term rentals outright (though they can heavily restrict them), providing a regulatory environment with better stability than most other regions.

The watch item in coastal markets is operating costs. Insurance premiums in hurricane-prone and storm-exposed markets have risen so much that they have rewritten the underwriting math for new buyers, particularly in Florida and the Gulf Coast. A property that cost a few thousand dollars to insure five years ago can now cost five or ten times that, depending on location, construction type, and flood zone. For homeowners already in these markets, the priority is shopping the insurance market aggressively each renewal. For prospective buyers, it’s modeling insurance cost increases into the underwriting from day one.

Urban markets

Urban markets are the most variable performers in 2026. Some have been hit hard by regulation. New York City is the most extreme example: short-term rentals there are now limited to a registered host-present model, which effectively eliminated the traditional whole-unit short-term rental market in the city. Other cities have followed with primary-residence requirements, density caps, or whole-home bans in specific zones.

At the same time, suburban areas of major U.S. cities are forecast to be among the better performers in 2026 because they sit far enough from the regulatory hot zones to be more permissive while still capturing business and leisure travel demand. The pattern that keeps showing up in the data is that secondary and tertiary suburban markets adjacent to a strong urban core can outperform the urban core itself once city-level regulation tightens.

Lake, rural, and unique destination markets

This is the part of the market that has quietly become one of the most interesting in the country. After years of strong post-pandemic growth, lake and rural markets are projected to slow somewhat in 2026, but from a high base. The demand drivers are consistent and not easily impacted: families, group trips, drive-to vacationers, and remote workers all seek out properties with privacy, outdoor space, and access to water or natural attractions.

Regulatory pressure in these markets has historically been lower than in urban or resort markets, though that gap is narrowing. Smaller jurisdictions that experienced rapid short-term rental growth between 2020 and 2023 are now considering registration, density limits, and occupancy caps. The pattern is consistent enough that buyers entering these markets should assume the regulatory environment will tighten over a typical hold period, not stay where it is today.

The pattern across all four market types is the same: there are no broadly good or broadly bad markets in 2026. There are well-run properties in good positions, and there are poorly run properties in the same positions.

The booking window has compressed, and pricing strategies need to keep up

One of the most important shifts in 2026 has nothing to do with regulation or amenities. It’s the length of time between when a guest books and when they arrive. That window has been shrinking for years, and in 2026 it’s shorter than it has ever been.

According to PriceLabs data published in early 2026, the average January booking window dropped from 19 days in 2022 to 15 days in 2026. The July peak window is projected to tighten from 34 days to 29 days over the same period. And bookings made within zero to seven days of arrival now make up 27% of all reservations, up from 21% in 2021.

For homeowners, the practical implication is simple: pricing strategies that worked when guests booked six weeks out do not work when guests are booking six days out. Properties that drop prices too early to chase early bookings end up giving away revenue to guests who would have paid more closer to the date.

Properties that hold rates too rigidly miss out on late-window guests entirely. The fix is dynamic pricing software that adjusts based on local demand signals (event calendars, competitor pricing, occupancy pace) rather than static seasonal calendars set months in advance. Dynamic pricing used to somewhat optional, but in 2026 it’s a requirement. Most professionally managed properties have been doing this for years, which is part of why they outperform self managed rentals. Personally managed STR listings are going to struggle more and more as the the booking window continues to shorten.

Amenities and features driving revenue in 2026

Property amenities have always mattered, but in 2026 the gap between properties with the right amenity mix and those without it is wider than ever. Guests are more selective. They compare more listings before they book. And the features that drive booking conversion and ADR are not the same ones that drove them five years ago.

Booking and pricing data from Q1 of 2026 show several clear trends. Larger homes are the fastest-growing category by booking volume. Properties with six or more bedrooms grew their booking volume by roughly 12.6% year over year in 2025, with five-bedroom properties up about 10.7% and three-bedroom properties up 7.5%. The driver is multi-generational and group travel. Families that used to book multiple hotel rooms are increasingly booking a single house that can sleep everyone under one roof.

Pet-friendly properties have quietly become one of the strongest revenue plays of the last few years. Listings that allow dogs run about $17 higher per night on average, and in premium markets, the gap is wider. There is more cleaning involved and the occasional chewed table leg, but the pool of guests willing to pay extra to bring their dogs is large and growing, and they’re willing to pay a premium.

Outside of property size and pet policies, the amenities driving the strongest revenue lift in 2026 are the ones that turn a property from just a place to sleep into a memorable part of the trip. Private hot tubs in mountain and lake markets. Pools in warm-weather markets. EV charging in markets with heavy Tesla and other EV traffic (Colorado, California, the Pacific Northwest). Dedicated workspaces with reliable high-speed internet for remote-work-friendly extended stays. Outdoor living environments with fire pits, premium grills, and comfortable seating that gets used. Game rooms in family destinations.

Professionally managed properties keep outperforming personally managed ones

The mix of self-managed properties vs professionally managed properties has been changing for several years, and 2026 is the year the difference shows up most clearly in the performance data.

The short-term rental industry started as a side-hustle market. Homeowners listed a spare room or a vacation property, set a flat nightly rate, answered messages when they could, and pocketed the income. Most of the early growth between 2015 and 2021 was self-managed supply entering the market for the first time. That phase looks to be quickly coming to an end. The supply into 2026 is increasingly professionalized: properties listed on multiple platforms, priced with dynamic pricing software, marketed with professional photography, and supported with 24/7 guest response capability.

Dedicated homeowners who have been successful managing their property by themselves can continue to be successful, but it’s going to become more work. Solo self managers are going to need to be investing more time and money into maintaining their revenue stream.

Hybrid management models (homeowners using software tools, hiring co-hosts, or working with co-management services) are gaining ground in 2026. Fully self-managed short-term rentals without major technology investments are facing more and more pressure as guest expectations rise and platform algorithms reward the polished end of the market more heavily.

For homeowners, the major question is no longer whether professional operational standards matter. The data says they do. The question is which model, full-service management, co-hosting, software tools, or some combination, makes the most sense for the property and the goals.

STR Regulation is the single biggest variable for 2026

No factor in the 2026 short-term rental market is changing faster than regulation. What used to be a scattered patchwork of city ordinances has become a complex matrix of state preemption laws, local licensing schemes, density caps, primary-residence requirements, and application processes. Homeowners are now facing situations where they need to be 100% on top of knowing exactly what the rules are, whether their property is fully compliant, and whether the rules are likely to change in 2026 in ways that affect their operation. Several changes have rolled out in major markets that are already starting to create issues for property owners.

Maui Mayor Richard Bissen signed Bill 9 into law on December 15, 2025, which phases out short-term rental operations in apartment-zoned districts across the county. The bill targets the roughly 7,000 units on the so-called Minatoya List, named after the legal opinion that allowed these units to operate as vacation rentals despite being in apartment zoning since 2001.

In California, Senate Bill 346 took effect on January 1, 2026 and gives cities and counties the authority to compel platforms like Airbnb and VRBO to share specific information about every short-term rental operating in their jurisdiction. Each city has to pass its own ordinance to invoke it. Once invoked, platforms must provide property addresses, license numbers, transient occupancy tax certificates, and detailed booking and revenue data.

Houston passed a registration ordinance effective January 1, 2026, with platform enforcement beginning April 1, 2026, requiring Airbnb and VRBO to remove unregistered listings. Austin’s existing short term rental rules will strengthened even more in July 2026 with a new platform display requirement that mandates license numbers appear directly on listings.

Several licensing proposals, caps, and restrictions are being debated in Washington, Arizona, and Missouri.

2026’s biggest demand drivers

The macro demand environment for U.S. vacation rentals in 2026 is more favorable than it has been in three years. Three drivers stand out.

The 2026 FIFA World Cup.

This is a once-in-a-generation event hosted across 11 U.S. cities (plus Mexico and Canada). According to U.S. Travel Association research released in April 2026, international World Cup visitors expect to spend more than $5,000 per person, which is 1.7x more than typical international visitors to the U.S. One in three plan to stay longer than two weeks. More than 80% are open to visiting destinations beyond the largest gateway cities, which is the part that matters most for properties outside the host cities themselves. AirDNA’s pacing data shows host cities like Philadelphia, the Jersey City and Newark area, and Dallas already running ahead of seasonal norms in 2026 RevPAR forecasts.

The 2028 Summer Olympics prep cycle.

Los Angeles hosting the 2028 Olympics is starting to show up in international visit pacing data already. The full impact lands in 2028, but the lead-up creates earlier-than-usual demand from international media, sports federations, and corporate visitors throughout 2026 and 2027.

Domestic travel

The U.S. Travel Association is forecasting domestic leisure travel spending to hit $909 billion in 2026, the only major travel segment to exceed pre-pandemic spending. Americans continue to prioritize experiences over goods, and the drive-to vacation or “staycation” has not lost its appeal. For properties in lake, mountain, and beach markets reachable by car from major metro populations, the demand should remain strong.

What this means for STR property owners in 2026

The 2026 short-term rental market is the most disciplined version of this industry we have seen in years. Supply growth is healthy and sustainable. Demand is stable. Average daily rates are creeping back up. Federal tax law has shifted in favor of owners. And the gap between properties that are run well and properties that are run on autopilot is wider than it has ever been.

For homeowners who treat their property like the business it actually is, 2026 is a year of real opportunity. For homeowners who are not sure where to start, or who are spending more time managing their property than they ever planned to, this is the year to seriously consider partnering with someone who does it for a living.