November Market Recap and 2025 Forecast

In this episode of STR Data Lab, Jamie Lane, Chief Economist at AirDNA, and Scott Sage, Vice President of Marketing and Customer Experience, take a deep dive into November’s short-term rental (STR) performance. They explore the current state of the market while sharing insights into rental market analysis, the importance of average daily rates (ADR) as a key metric, and the impact of inflation and interest rates on STR operators and investors.

Whether you're managing one property or an extensive portfolio, understanding these trends and data points is essential for navigating the complexities of today’s STR landscape.

Here’s What You Can Expect from This Episode

Review of November’s STR metrics, including ADR, occupancy rates, and revenue per available rental (RevPAR)
The impact of declining supply growth and steady demand on pricing power
Projections for inflation, interest rates, and their influence on future STR investments
What to expect in 2025, the “Year of Efficiency” for the STR industry

Episode Highlights

November STR Performance Recap

Scott and Jamie begin by reflecting on November’s market performance. For the first time in months, all five key metrics—demand growth, occupancy, RevPAR, ADR, and listings—exhibited positive year-over-year signals, indicating a steady recovery and newfound market stability.

One standout metric is the average daily rate, which showed a 7% year-over-year increase in November. While this is a strong result, Jamie points out that this growth was supported by easy comparisons to last year’s ADR decline of 3.9%. However, this trend signals that STR operators are beginning to regain pricing power.

Occupancy also rose by approximately 3%, reflecting both the strength in demand and a deceleration in supply growth, which has fallen from 15% in November 2022 to just 4% in 2023. With fewer new listings entering the market, existing operators are benefiting from improved booking activity and reduced competition.

Rental Market Analysis: The Role of Supply and Demand

Jamie emphasizes the importance of conducting thorough rental market analysis, as every region presents unique opportunities and challenges. Supply growth trends, for example, vary significantly by market type:

Urban markets have seen minimal growth, hovering around 0-1%, largely due to stricter regulations.
Suburban markets report moderate growth of 1-2%, supported by demand for family-friendly accommodations.
Small city and rural markets continue to expand, with growth rates exceeding 11%, driven by traveler interest in unique and remote destinations.
Traditional vacation markets, like coastal and mountain areas, show limited growth of 2-4%, reflecting high housing prices and saturated supply.

Jamie and Scott highlight how analyzing these trends can help operators and investors identify high-performing markets and adjust their strategies accordingly.

Strength in ADR: A Return to Pricing Power

The average daily rate (ADR) remains a critical indicator of market health. While ADR growth had stagnated earlier in the year, November marked a turning point. Jamie explains that ADR growth was largely supported by improved occupancy and reduced price competition. With demand rising at 5-6% annually and supply growth slowing, STR operators are regaining the ability to set rates more strategically.

Jamie advises hosts to use dynamic pricing tools to capitalize on seasonal and local demand fluctuations. For instance, winter travel to ski destinations often commands premium rates, making it essential for operators in mountain markets to adjust their pricing to reflect these trends.

Inflation and Interest Rates: Implications for STR Investments

Inflation and interest rates are key economic factors shaping the STR market. Scott and Jamie discuss how interest rates, which climbed sharply in 2023, remain elevated as 2025 approaches. With 30-year mortgage rates exceeding 7%, borrowing costs have made it more challenging for new investors to enter the market.

Inflation remains a concern, with projections for a slight uptick in 2025. Although current inflation levels are within manageable ranges, Scott notes that any unexpected acceleration could impact investment appetite and pricing strategies.

Jamie explains that high interest rates are creating barriers for new entrants, leading to slower supply growth. This trend benefits existing operators, as lower competition supports occupancy and ADR. However, for those looking to expand their portfolios, navigating these economic challenges will require careful planning and access to creative financing solutions.

Projections for 2025: The Year of Efficiency

Jamie and Scott dub 2025 the “Year of Efficiency” for the STR industry. With new investments slowing, operators must focus on maximizing the potential of their existing properties. Jamie outlines several strategies for achieving this:

Optimize Operations: Streamline workflows through automation and better use of property management systems (PMS) like Uplisting.
Leverage Data: Use insights from platforms like AirDNA to monitor market trends, identify growth opportunities, and refine pricing strategies.
Improve Guest Experiences: Invest in property upgrades and personalized touches to boost reviews and drive repeat bookings.

Jamie emphasizes that the goal for 2025 isn’t just maintaining profitability but finding innovative ways to grow despite economic challenges. For operators, this might include expanding into underserved markets or diversifying property offerings to attract new traveler demographics.

Actionable Takeaways for STR Operators and Investors

Conduct regular rental market analysis
Use tools like AirDNA to track metrics such as ADR, occupancy, and RevPAR in your market. Tailor your strategies based on local supply and demand trends.

Focus on pricing power
With ADRs stabilizing, leverage dynamic pricing to optimize rates during high-demand periods and capture maximum revenue.

Prepare for inflation and interest rates
Account for higher borrowing costs in your financial planning. Consider alternative investment strategies, such as joint ventures or partnerships, to mitigate risks.

Embrace efficiency
Streamline your operations, improve guest satisfaction, and find ways to reduce overhead without sacrificing quality.

Explore high-growth Markets
Focus on regions with strong demand and manageable competition, such as small city or rural markets that offer unique travel experiences.

Looking Ahead

As the episode concludes, Scott and Jamie highlight upcoming reports and tools designed to support STR operators. In mid-January, AirDNA will release its highly anticipated “Best Places to Invest” report, offering valuable insights for those planning their next move.

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Signup for AirDNA for FREE👇

https://app.airdna.co/data

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Connect with Jamie on LinkedIn and Twitter:

LinkedIn: https://www.linkedin.com/in/jamiehlane/

Twitter: https://twitter.com/Jamie_Lane

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Connect with Scott on LinkedIn:

LinkedIn: https://www.linkedin.com/in/sagescott

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Connect with AirDNA on LinkedIn, Twitter, TikTok, and Instagram:

LinkedIn: https://www.linkedin.com/company/airdna/

Twitter: https://twitter.com/airdna

TikTok: https://www.tiktok.com/@airdna.co

Instagram: https://instagram.com/airdna.co

Listen On:

Up Next:

Exploring the Economic Trends and Innovation in the STR Market

In this special episode of STR Data Lab, Jamie Lane, Chief Economist and SVP of Analytics at AirDNA, shares expert insights into the short-term rental market trends and provides operators with actionable guidance on staying ahead in a dynamic industry. From cutting-edge property management trends to post-COVID recovery insights and macroeconomic challenges like inflation and interest rates, this episode is a must-listen for short-term rental (STR) hosts and investors looking to thrive in 2025 and beyond.

What to Expect from This Episode

Insights into property management innovations reshaping how hosts operate and scale
Data-driven short-term rental insights and regional trends shaping global STR markets
Strategic responses to economic shifts, including inflation and rising interest rates
AirDNA's role in driving data-powered success for hosts and property managers

Episode Highlights

Property Management Trends: Redefining Efficiency

Jamie opens the episode by highlighting the rapid evolution of property management trends in recent years. Automation is now more accessible than ever, with tools enabling hosts to save time on repetitive tasks like guest communication, scheduling, and revenue management. Technologies like Uplisting, recently integrated into AirDNA’s suite, are allowing smaller operators to punch above their weight in a competitive market.

Jamie emphasizes that the most successful operators are those who embrace tech-driven efficiency. Hosts can make smarter pricing decisions, manage bookings across platforms, and maintain a consistent guest experience by combining advanced property management systems with market analytics. These capabilities not only reduce costs but also boost profitability by optimizing performance.

In particular, Jamie notes a growing trend toward integrated systems that bring together booking management, dynamic pricing, and marketing automation. These systems are vital for scaling operations without losing control of key aspects of the guest journey.

Short-Term Rental Insights in a Post-Pandemic World

The pandemic fundamentally reshaped how and where travelers choose to stay. Jamie explains that during COVID-19, rural and small-city markets grew quickly as people left cities for quieter, safer places. Now, urban areas are bouncing back, while rural rentals face more competition because there are so many properties available.

Jamie highlights two enduring short-term rental insights:

Extended Stays Are Here to Stay: Remote work has permanently altered travel behaviors. Guests now prioritize flexible check-ins, discounted monthly rates, and dedicated workspaces. Hosts catering to digital nomads are seeing significant benefits.
Experience-Driven Travel Rules: Guests continue to seek properties that offer unique designs, local charm, and eco-friendly practices. Hosts who don’t offer unique or special experiences may struggle to attract today’s travelers, who look for memorable stays.

Short-Term Rental Market Trends Across Regions

Jamie takes a closer look at short-term rental market trends, showing how growth dynamics vary across regions. Established markets like the United States, Europe, and Australia have matured, with growth slowing as they contend with regulatory challenges and market saturation. Meanwhile, emerging regions like Southeast Asia and Latin America are attracting significant attention from STR investors.

Jamie notes that these growth markets often benefit from fewer regulations and an expanding middle class eager to explore local destinations. He points to cities like Mexico City, which have become STR hubs due to affordable housing and rich cultural experiences.

Another global trend Jamie discusses is the increasing focus on environmental sustainability. From offering low-energy appliances to highlighting eco-tourism partnerships, operators who incorporate green practices stand out in an increasingly competitive market.

The Macroeconomic Backdrop: Inflation and Interest Rates

Jamie dedicates a significant portion of the episode to the impact of inflation and interest rates on STR investments. Elevated interest rates, which soared in response to pandemic-era economic stimuli, continue to reshape the market landscape. While borrowing remains costly, it has also slowed supply growth in many markets, creating a more balanced demand-supply equation for existing operators.

Jamie advises hosts to remain vigilant about pricing as inflation affects consumer behavior. Guests are becoming more budget-conscious, so offering value-driven amenities, such as free parking or complimentary experiences, can help attract bookings without lowering average daily rates (ADR).

How AirDNA Is Shaping the Future of Short-Term Rentals

AirDNA remains at the forefront of STR innovation, and Jamie outlines how the company is expanding its offerings to help operators succeed in an evolving landscape. The recent acquisition of Uplisting is a pivotal move that enhances AirDNA’s ability to combine data-driven market insights with efficient property management tools.

Jamie explains that the integration will enable hosts to seamlessly manage their listings across platforms while gaining access to analytics that inform better decision-making. Whether it’s understanding seasonality, optimizing pricing, or tracking emerging markets, AirDNA’s expanded ecosystem will play a critical role in equipping hosts with a competitive advantage.

The episode also touches on AirDNA’s Jamie’s Lane Change series, where Jamie documents his own journey as an STR operator. This initiative aims to provide practical, hands-on advice for hosts, bridging the gap between theoretical analytics and real-world application.

Actionable Advice for Operators

Invest in automation: Use platforms like Uplisting to automate daily tasks and maintain a consistent guest experience across all booking channels.
Adapt to guest trends: Incorporate amenities like work-friendly setups and eco-conscious features to appeal to modern travelers.
Monitor global trends: Track opportunities in high-growth markets while staying aware of local regulatory changes.
Price strategically: Use tools like dynamic pricing software to adjust rates based on demand, ensuring you remain competitive and profitable.
Lean from data: Platforms like AirDNA can provide the insights needed to optimize revenue, streamline operations, and expand strategically.

Looking Ahead

The STR industry faces challenges, from inflation to rising interest rates, but these same conditions present opportunities for operators who innovate. Jamie concludes with optimism, encouraging hosts to double down on efficiency, personalization, and sustainability to meet the demands of an evolving traveler demographic.

With tools like AirDNA and the advice shared in this episode, hosts have the resources they need to handle economic challenges and find new opportunities in a competitive market.

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Signup for AirDNA for FREE👇

https://app.airdna.co/data

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Connect with Jamie on LinkedIn and Twitter:

LinkedIn: https://www.linkedin.com/in/jamiehlane/

Twitter: https://twitter.com/Jamie_Lane

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Connect with Scott on LinkedIn:

LinkedIn: https://www.linkedin.com/in/sagescott

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Connect with AirDNA on LinkedIn, Twitter, TikTok, and Instagram: