UK Short-Term Rental RevPAR Holds Firm as Hotels Fall 8% in Q3 2026

Updated 15 October 2026. After a source check by the standards desk, 2 sentences were removed because no source confirmed their specifics. Corrections log.

UK hotel revenue per available room fell 8% year over year during the third quarter of 2026, while short-term rental revenue per available rental remained unchanged in England, increased 3% in Scotland and rose 2% in Wales, according to analytics firm KeyData.

The contrast between hotels and short-term rentals was most evident in Wales, where hotel RevPAR fell 28% year over year alongside a 27% drop in calendar occupancy, whereas short-term rental RevPAR grew 2%. Higher average daily rates across the short-term rental sector succeeded in offsetting lower occupied night counts throughout the third quarter, providing stability for hosts and property managers across the United Kingdom.

What the data shows

KeyData’s analysis of third-quarter performance indicates that short-term rental operators relied on pricing power to counter weakening volume. Average daily rates increased across all three months of the quarter compared to 2025. Nightly rates rose 4% year over year in July to £189, followed by a 2% increase in August to £203 and a 4% increase in September to £140. Every region covered by the KeyData study recorded higher nightly rates during the quarter. Scotland led regional rate expansion with a 6% increase, while North East England and North West England recorded the smallest gains at 2%.

Occupancy metrics failed to keep pace with rate increases. After remaining unchanged year over year in July, UK short-term rental occupancy declined 4% in August and dropped 5% in September. Despite fewer occupied nights, the elevated nightly rates maintained revenue per available rental within 2% of the previous year’s level in both August and September. Across England as a whole, a 3% increase in average daily rates fully offset a 3% decline in occupancy, keeping RevPAR broadly unchanged from the third quarter of 2025.

Overall booking activity ended the third quarter slightly below 2025 levels, though the annual gap narrowed during September. KeyData noted that booking and revenue fluctuations were less volatile during 2026 than in 2024 and early 2025, pointing toward more stable operational conditions for property managers despite softer occupancy.

How it was measured

KeyData evaluated performance using anonymized reservation data pulled directly from integrated property management systems representing more than 95,000 UK short-term rental properties. The report analyzes completed stays from July 1 through September 30, 2026, alongside forward reservation records captured as of October 6 for October, November and December stay dates.

KeyData highlighted methodology details regarding its comparisons between accommodation types. The report measures year-over-year percentage changes in revenue per available room or rental rather than making direct comparisons of absolute monetary values between hotels and short-term rentals. In addition, the metrics reflect distinct occupancy definitions: hotel data uses calendar occupancy, whereas short-term rental figures are calculated using paid occupancy. Forward-looking figures for the fourth quarter reflect reservations already booked on October 6 and remain subject to change as prospective guests make new reservations or adjust existing plans.

Regional performance and hotel divergence

Performance across the UK nations and English regions showed marked variation during the third quarter. In Wales, the performance gap between short-term rentals and traditional hotels was especially wide. Welsh hotels experienced a 28% year-over-year drop in RevPAR alongside a 27% decline in calendar occupancy. Conversely, Welsh short-term rentals generated a 2% increase in RevPAR over the same period. Mid Wales was the single region within KeyData’s study to record an increase in short-term rental occupancy, which rose 1%. Coupled with a 2% increase in average daily rates, Mid Wales delivered a 3% RevPAR gain.

Scotland recorded a matching 3% RevPAR increase, despite a 3% contraction in occupancy. Scotland’s performance was driven by a 6% gain in nightly rates, which represented the highest rate growth of any region evaluated. South East England also achieved 3% RevPAR growth, supported by a 3% increase in average daily rates while occupancy remained unchanged relative to the third quarter of 2025.

At the opposite end of the spectrum, North East England faced the strongest headwinds of any region. Short-term rentals in North East England experienced a 7% decline in occupancy and a 6% drop in RevPAR. In North West England, operators recorded a modest 2% rate increase, matching North East England for the lowest rate growth in the study.

Booking channel shifts and revenue value

KeyData’s research detailed a multi-year shift in reservation channels across UK short-term rentals, with major online travel agencies capturing a growing proportion of total guest check-ins. Direct reservations dropped to 57% of check-ins during the third quarter of 2026, down from 62% in 2025 and 69% in 2024. Over that same two-year interval, Airbnb’s check-in share expanded from 13% to 19%, while Booking.com’s share grew from 16% to 23%.

Despite losing share in total check-in volume, direct bookings continued to generate a disproportionately large share of top-line revenue for operators. While direct guests represented 57% of third-quarter check-ins, they generated 68% of total rental revenue. In contrast, Booking.com exhibited the largest disparity between guest check-in volume and revenue contribution among major channels. Booking.com accounted for 23% of check-ins but generated only 15% of total revenue.

KeyData observed that direct bookings remained exceptionally valuable to property managers even as direct guest volume contracted. The report noted that the data does not establish whether this revenue disparity stems from longer stay durations, differences in property types selected by guests, higher baseline booking values or other underlying factors.

Fourth quarter pacing and December outlook

Looking ahead to the final quarter of 2026, KeyData’s forward reservation data as of October 6 indicates that market performance may strengthen in December after a sluggish start in October and November. For both October and November, forward occupancy was pacing 6% below the comparable point in 2025. Higher daily rates offset part of this shortfall, with October rates pacing 4% higher and November rates pacing 3% higher year over year. However, rate increases were insufficient to fully protect revenue, leaving RevPAR pacing 2% lower in October and 3% lower in November.

December forward figures presented a substantially stronger outlook. Occupancy for December was running 2% ahead of the equivalent 2025 pacing point, while average daily rates were 5% higher at £216. Together, those figures positioned December RevPAR 6% ahead of the previous year, making December the highest-performing month of the fourth quarter in KeyData’s pacing dataset.

Additional forward metrics showed that average booking lead times for stays in October, November and December were slightly longer than a year earlier, providing hosts and property managers with earlier visibility into upcoming demand. However, average length of stay pacing for November and December was 3% shorter year over year, indicating that the anticipated December revenue expansion is driven by guest volume and pricing rather than longer individual trips.

Sally Henry, Vice President of Market Intelligence and Insights at KeyData, stated in the report:

“Q3 showed UK operators holding their nerve on price.”

Henry noted that higher nightly rates allowed operators to preserve revenue despite selling fewer nights, but emphasized that October and November require deliberate management of booking demand. She identified December as a more encouraging period due to positive alignment across occupancy, nightly rates and RevPAR compared to 2025 pacing.

What to watch

Hosts, property managers and investors tracking the UK short-term rental market can evaluate the following operational factors over the coming months:

• Monitor October and November booking pace against local market occupancy benchmarks to determine if discounting or targeted promotions are necessary to fill open calendar nights.
• Track direct booking conversion rates and guest retention incentives to protect high-margin direct revenue as online platforms capture a larger share of check-ins.
• Evaluate property pricing strategies for December stays to align with the reported £216 average daily rate benchmark while managing shorter average stay durations.
• Compare regional RevPAR trends, particularly in regions like North East England that experienced occupancy declines of 7%, against national averages when making property acquisition or expansion decisions.