Assessing Economic Uncertainty and Its Impact on the STR Industry

What does economic uncertainty really mean for short-term rental (STR) operators? In this episode of the STR Data Lab, AirDNA Chief Economist Jamie Lane and Director of Economic and Forecasting Bram Gallagher take a deep dive into today’s shifting macroeconomic landscape.

With stock market swings, inflation expectations, new tariffs, and falling consumer confidence, the STR industry is bracing for potential turbulence. Despite these headwinds, however, data-driven strategies can help hosts and investors stay the course.

Whether you're concerned about volatility in international travel, the wealth effect from equity declines, or the impact of inflation on guest behavior, this episode arms you with the insights you need to make smart, proactive decisions.

Here’s what you can expect from this episode:

Why the Economic Policy Uncertainty Index has surged to its highest level since COVID-19—and what that means for STR operators
How consumer sentiment and stock market volatility influence travel behavior
The role of tariffs and trade tensions in reducing international demand (especially from Canada)
Why certain markets are more exposed to economic instability
How to interpret current economic fundamentals and what downside risks might mean for 2025

Episode Highlights

The Rise of Economic Policy Uncertainty

Jamie and Bram open the conversation with a look at why uncertainty is the watchword of the moment. Despite healthy indicators like low unemployment and stable GDP growth, perception is everything—and consumer confidence has been falling. Bram points to the Economic Policy Uncertainty Index, which recently hit levels not seen since the early days of the pandemic.

Why the spike? A mix of factors: political turnover, trade policy changes, and headline-driven market reactions. The lesson for STR stakeholders: even with a solid economic base, psychological signals like consumer unease can drive real behavioral shifts in travel planning.

Tariffs and Travel: A Risk to International Demand

One standout discussion centers on tariffs—both their immediate and ripple effects. The U.S. has implemented broad-based tariffs targeting imports from Canada, Mexico, and China, which not only impact prices but also stir retaliatory action from trading partners. For STR operators, this matters.

Data shows a dramatic 70% to 75% drop in flight demand from Canada to the U.S., and some major routes have been canceled altogether. That’s significant when Canadian travelers made up 2.6% of U.S. STR demand last year. In markets like Buffalo, New York; Fort Lauderdale, Florida; and Maui, Hawaii where international travelers form a substantial portion of bookings, the implications are real and potentially lasting.

The Wealth Effect and Stock Market Volatility

Consumer spending patterns often shift in tandem with the stock market. Even if job numbers remain strong, when consumers see their portfolios shrink, they start looking for ways to cut back—travel included.

This "wealth effect" hits higher-income earners particularly hard. While households earning over $125,000 have maintained strong confidence so far, a major market correction could change that quickly. That means luxury STRs might feel the pinch first.

Business and Government Travel Cutbacks

Another key signal: a sharp downturn in business and government travel. Forward-looking data shows government bookings down 80% and corporate bookings down 45%. Combined, these two segments account for nearly 18% of the overall lodging demand. While short-term rentals lean more toward leisure travel, hotels slashing rates to compete could lead to price pressure across the board.

Operators should take note: in times of economic instability, even indirect exposure to business travel trends can impact your revenue outlook.

Inflation, Currency Fluctuations, and STR Demand

Tariffs are also fueling inflation expectations. With inflation, the value proposition of travel weakens—particularly for international guests facing unfavorable exchange rates. A stronger U.S. dollar makes U.S. stays more expensive, further curbing demand from abroad.

Some travelers may opt to stay local, travel less, or shorten their stays. For STR hosts, that means refining marketing efforts and offering competitive pricing becomes even more critical.

Geography Matters: Markets at Greater Risk

The episode highlights how exposure to international markets varies significantly by region. Canadian travelers, for example, represent more than 10% of STR demand in markets like Buffalo, New York; Bellingham, Washington; Maui, Hawaii, and parts of Florida.

Operators in these areas should monitor booking trends closely and consider domestic targeting strategies to offset declines. Leveraging AirDNA tools to identify emerging domestic demand can offer a strategic edge.

So, Where Do We Stand?

Despite all the red flags, Bram and Jamie emphasize that core economic indicators remain resilient—for now. Employment is strong, inflation was mild last month, and industrial production is steady. That being said, risks are building. Falling labor force participation, equity market vulnerability, and rising tariffs all point to increased downside potential.

The consensus? Economic uncertainty is here, but panic isn’t necessary. STR operators should use data to track demand shifts and be ready to pivot.

Actionable Insights for STR Hosts and Investors

Watch the data, not the headlines. Economic fundamentals still support growth, but keeping an eye on emerging metrics is crucial.
Know your market’s risk exposure. If your STR relies on international travel or corporate stays, it's time to reassess.
Adapt your pricing strategy. Use AirDNA’s Dynamic Pricing tools to stay competitive if demand softens.
Promote domestic travel. Redirect marketing to U.S. travelers and highlight value, flexibility, and local attractions.
Plan for different scenarios. Develop both conservative and optimistic forecasts based on the evolving economic landscape.

Final Takeaway

Economic uncertainty doesn’t have to spell disaster for short-term rentals. With the right insights and tools, you can anticipate changes and stay ahead of the curve. Tune in to Episode 126 of The STR Data Lab for a thoughtful, data-backed breakdown of how macroeconomic shifts could affect your strategy—and what to do about it.

Listen now and future-proof your STR business.

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https://app.airdna.co/data

Connect with Jamie on LinkedIn and Twitter:

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

Twitter: https://twitter.com/Jamie_Lane

Connect with Bram on LinkedIn:

LinkedIn: https://www.linkedin.com/in/bram-gallagher/

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

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Up Next:

Short-Term Rental Photography Secrets with Andrew Keller

In this episode of the STR Data Lab, AirDNA’s Chief Economist Jamie Lane sits down with Andrew Keller, founder of ISO Need Photos and a rising authority in short-term rental (STR) photography. Whether you're furnishing your first STR or managing a high-performing portfolio, this conversation dives into how high-quality visuals can set your listing apart—and drive higher occupancy rates and revenue.

Andrew has photographed more than 200 STRs across 22 U.S. states and Costa Rica, perfecting a style that blends artful design with booking strategy. He shares the importance of staging, lighting, seasonality, and other often-overlooked details that elevate listings. From drone imagery and 3D floor plans to lifestyle shots that answer unspoken guest questions, this episode is a must-listen for anyone serious about creating a best-in-class STR listing.

Here’s what you can expect from this episode:

Why short-term rental photography is one of the most misunderstood (and most powerful) parts of a listing
How professional photos can increase bookings by 10–20% or more
The key differences between STR photography and traditional real estate photography
How to stage your rental like a pro—including details that most hosts miss
Why time of day matters when capturing photos and how Andrew plans full-day shoots for better light and variety
Tips for choosing the right photography for your short-term rental listing, even if you go the DIY route
How to find and vet a quality STR photographer in your market

Episode Highlights

Introduction

Jamie kicks off the episode by reflecting on his own experience hiring Andrew to photograph his short-term rental. What he thought would be a standard shoot turned into a lesson in strategy—from creating scroll-stopping hero images to anticipating guest concerns with detailed lifestyle shots. This episode explores how photography isn’t just about aesthetics—it’s a key contributor to trust, clarity, and conversions.

Meet the Guest: Andrew Keller of ISO Need Photos

Andrew Keller’s journey into STR photography began in 2020 with a drone and a river cabin. Since then, he's built a thriving business based on one philosophy: go above and beyond to help hosts get more bookings. From the start, Andrew has emphasized variety and depth in his work—delivering more than 150 edited photos per shoot, including drone shots, twilight exteriors, cozy interiors, and amenity close-ups.

Andrew believes great photography tells a story, and a well-told story is what turns curious booking platform browsers into paying guests.

STR Photography: More Than Just Good Lighting

A recurring theme throughout the episode is how professional short-term rental photography directly impacts bookings. Andrew’s clients consistently report 10–20% increases in performance after upgrading their photos. For properties grossing $50K or more annually, that’s thousands in added revenue.

It’s not just about glossy images, though. Andrew explains how quality photography builds trust. When guests see clean, welcoming spaces and can visualize the layout through drone photos or 3D floor plans, they ask fewer questions and book more confidently.

Staging Like a Superhost

Staging isn’t about perfection—it’s about preparation. Andrew offers a detailed rundown of how to prep for a shoot, from the basics (clean spaces, working lights, matching dinnerware) to standout touches like:

Setting the dining table completely
Filling the hot tub
Adding string lights for ambiance
Including lifestyle elements like cozy blankets or mock place settings

Hosts should aim to make the home “guest-ready,” not just photo-ready. That means no visible clutter, no half-finished installations, and no last-minute scrambles. Andrew recommends that hosts treat the shoot as if a five-star guest were checking in.

Choosing the Right Photography for Your Short-Term Rental Listing

When it comes to choosing the right photography for your short-term rental listing, Andrew has advice for both pros and DIYers. For those with a good camera and some editing know-how, he recommends:

Shooting from light-switch height for more natural angles
Keeping vertical lines straight to avoid distortion
Turning on all interior lights and opening window blinds
Avoiding ceiling fans and toilet lids in the frame
Shoot photos in a RAW file format rather than a compressed format like JPEG

For those hiring a photographer, he suggests using local STR Facebook groups to find recommendations. Ask for links to the last 10 Airbnb listings they’ve shot. This offers a more realistic view of their capabilities than a polished portfolio will.

Beyond the Basics: Floor Plans, Drone Footage, & Seasonal Updates

The episode also dives into lesser-known photography strategies that make a big difference:

3D floor plans: These reduce booking friction by showing exactly where guests will sleep or how accessible the property is.
Labeled drone shots: Show distance to key amenities like beaches, trails, or downtown.
Seasonal refreshes: Hiring a local photographer to update exteriors during fall foliage or summer green-ups can boost bookings without the cost of a full shoot.

The Hero Image Dilemma

What’s the best hero image to lead your listing? According to Andrew, it depends, but it must stand out in the search feed. Twilight exteriors with warm window light tend to outperform daytime shots, but if every listing in your market does the same, consider leading with a unique view or amenity.

A smart approach? Test and rotate. As seasons change and your listing evolves, so should your lead image.

Final Tips for Hosts

As the episode winds down, Andrew shares a few final tips:

Always prep your property as if it’s about to welcome guests.
Think about what your guests need to know—and answer that visually.
Consider small, ongoing updates. New game room feature? New outdoor seating? Get one or two photos to reflect that.
Don’t skip the details. A single labeled drawer photo can communicate more than a paragraph of listing text.

Connect with Andrew Keller

Interested in working with Andrew? Visit ISO Need Photos or text him directly at 423-316-1967 to get on his schedule.

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