Global short-term rental gross bookings reached $219.9 billion in 2025, Phocuswright reported

On August 7, 2026, Phocuswright reported that global short-term rental gross bookings reached $219.9 billion in 2025, signaling that the sector was entering a phase of market maturity despite tightening regulatory environments. The travel research firm projected that the global market would expand at a compound annual growth rate of 5.3% through 2029, when gross bookings were expected to reach $270.6 billion.

The findings indicated that while local restrictions were restructuring the industry, they were not stopping its overall growth. Instead, Phocuswright observed that the era of rapid expansion with limited regulatory oversight was giving way to a new operating model where regulation, technology, and changing traveler expectations shaped the next chapter of the market. The transition was marked by an increasing emphasis on quality, reliability, and professional management across major global regions.

What the data shows

In its Global Short-Term Rentals 2026 report, Phocuswright detailed the performance and trajectory of the world's largest short-term rental markets, highlighting strong demand across both North America and Europe. In North America, gross bookings reached $78 billion in 2025. The research firm forecast that North American bookings would increase to $81.8 billion in 2026, noting that this rate of expansion was faster than that of the hotel market.

In Europe, the short-term rental market was expected to reach $79.7 billion in gross bookings in 2026. Phocuswright reported that this performance confirmed the role of short-term rentals as a core component of the tourism accommodation landscape. The penetration of the short-term rental model was particularly evident in several European countries, where the share of travelers using these accommodations was comparable to or higher than the share in the United States. Specifically, traveler usage reached 44% in France, 31% in the United Kingdom, and 26% in Germany.

The report also highlighted significant shifts in traveler behavior, particularly regarding the duration of stays. In the United States, the average trip length increased from 6.2 nights in the 2022/23 period to 7.2 nights in the 2024/25 period. Additionally, the share of trips lasting more than two weeks increased significantly. Phocuswright noted that short-term rentals held a strong competitive advantage in this longer-stay category, which helped sustain demand even as broader travel patterns normalized. This shift toward extended stays indicated that travelers were increasingly using residential rentals not just for quick weekend getaways, but as primary bases for longer vacations and remote work arrangements.

How it was measured

The figures were published by Phocuswright in its Global Short-Term Rentals 2026 report on August 7, 2026. The research firm analyzed global market dynamics, booking volumes, and traveler behavior across major regions, including North America and Europe, to establish historical performance and future growth projections. However, the source did not publish its exact methodology, sample sizes, or specific data collection mechanisms used to compile the regional booking totals, the compound annual growth rate projections, or the traveler usage percentages in France, the United Kingdom, and Germany. The report projected market performance through 2029.

Regulatory pressures and restructuring

Phocuswright identified the tightening of regulatory frameworks as one of the three major trends shaping the market in 2026. Across many countries, local authorities sought to manage the expansion of short-term rentals, particularly in destinations experiencing high tourism pressure and housing challenges. The new rules introduced by these authorities included restrictions on new registrations, increased compliance requirements, tax controls, and greater transparency in rental operations.

This regulatory trend was highly visible in Greece, where the short-term rental market entered a stricter operating environment. Greek authorities implemented restrictions on new registrations in specific areas of Athens and Thessaloniki, accompanied by intensified monitoring and enforcement. These measures reflected a stricter regulatory environment with intensified monitoring and enforcement.

Despite these measures, Phocuswright reported that the global picture showed regulation did not necessarily lead to market contraction. Instead of stopping growth, the tightening rules contributed to a transition toward a more structured market. In this environment, professional operators who invested in quality and compliance gained a competitive advantage over those who treated the sector as an unregulated side business.

Shifting traveler expectations

Another major trend identified in the report was a fundamental shift in traveler behavior. Phocuswright reported that travelers were no longer choosing accommodations based solely on price or location. Instead, guests placed greater importance on trust, consistency of experience, and value for money.

The research highlighted that comparisons between hotels and short-term rentals were becoming increasingly common during the search and booking process. This trend meant that short-term rental properties were no longer competing exclusively with each other; instead, they were being directly compared with traditional hotel products. Travelers evaluated properties side-by-side, raising the competitive bar for individual hosts.

At the same time, the increase in average trip lengths supported the residential accommodation model. As the average US trip length grew to 7.2 nights in 2024/25, and trips lasting longer than two weeks increased, short-term rentals benefited from their inherent advantages for extended stays. The report indicated that these longer stays provided a stable baseline of demand for operators who could deliver a reliable, home-like environment.

The impact on operators

For hosts and professional property managers, the shifting market dynamics meant that simply listing a property on a booking platform was no longer a guarantee of commercial success. Phocuswright reported that the market was moving toward greater professionalization. This shift placed a premium on the quality of the guest experience, the reliability of listing information, response times, and the overall management of the guest relationship.

The report indicated that operators who invested in structured processes, technology, and high hospitality standards were expected to outperform those who treated short-term rentals as a passive income stream. The transition highlighted that operators investing in structured processes, technology and high hospitality standards are expected to outperform those treating short-term rentals as a passive income stream.

Technology and platform evolution

Technology, particularly artificial intelligence, was identified as the third major trend influencing the sector. Phocuswright estimated that generative artificial intelligence would change the way travelers search for and organize their trips.

Concurrently, major booking platforms continued to evolve their business models to adapt to these changes. For example, Airbnb was gradually expanding beyond simple accommodation bookings by investing in new services and experiences. However, Phocuswright noted that it remained unclear whether artificial intelligence would generate additional demand for short-term rentals or simply transform the way travelers discover and choose properties.

What the data leaves out

While the Phocuswright report provided a comprehensive overview of global booking trends and regional performance, it left several key questions unanswered. The report did not specify the exact volume of bookings handled by individual platforms such as Airbnb, nor did it break down the market share of these platforms.

Furthermore, while the report noted that restrictions were implemented in specific areas of Athens and Thessaloniki, it did not detail the precise geographic boundaries of these restricted zones or the specific tax rates applied to Greek hosts. The report also did not quantify the exact increase in the share of trips lasting more than two weeks in the United States, nor did it provide a breakdown of the specific technologies or software solutions that professional operators were using to manage guest relationships and response times. Finally, the report did not provide a forecast for how the compound annual growth rate might vary between individual European nations.

What to take from it

The Phocuswright report highlights that the short-term rental market is transitioning from a period of rapid, unregulated expansion into a structured, professionalized industry. Operators must adapt to these changing dynamics to maintain profitability.

• Compare local regulatory trends with the broader national shifts, ensuring that compliance costs and registration requirements are factored into long-term financial models.
• Monitor average trip lengths in specific target markets to align property amenities with the needs of longer-stay travelers, who represent a growing segment of demand.
• Evaluate guest communication metrics, such as response times and review scores, against professional hospitality standards rather than just local rental competitors.
• Assess investment in technology and professional management processes as necessary operational expenses to defend market share against traditional hotels.