U.S. short-term rental occupancy fell 1.7% in December 2025 as performance split

On January 21, 2026, AirDNA reported that average occupancy in the U.S. short-term rental market fell 1.7% year-over-year in December 2025 to 51.0%. The decline capped a year of mixed performance across the industry, characterized by widening gaps between different locations, price tiers, and operators.

While headline occupancy for the full year remained relatively stable compared to the previous year, underlying metrics pointed to a market adjusting to macroeconomic pressures. Modest demand growth, stabilizing lead times, and renewed pricing momentum toward the end of the year offered a cautious outlook heading into 2026, even as inflation and uneven consumer confidence continued to influence travel behavior.

What the data shows

In December 2025, several key performance metrics showed modest positive movement despite the dip in occupancy. According to AirDNA, Revenue per Available Rental (RevPAR) increased 1.8% year-over-year to $126.97. The total number of available listings reached 1.66 million, representing a 3.4% increase compared to December 2024. Demand nights grew by 1.9% year-over-year, and Average Daily Rates (ADR) climbed to $248.57, which was a 3.3% increase from the prior year.

Additionally, the Repeat Rent Index (RRI), which measures rate changes made by existing operators and excludes the impact of new listings, rose 2.5% year-over-year. Total nights booked in December 2025 were up 4.1% from December 2024.

For the full year of 2025, U.S. short-term rental occupancy finished at 56.9%, representing a small increase from the 56.7% recorded in 2024. AirDNA described this as a roughly quarter-percentage-point increase. However, this annual stability masked significant volatility throughout the year. Occupancy started strong with gains in January, February, and April 2025, but declined year-over-year in every month after May. The most pronounced decline occurred in September, which also saw the largest year-over-year decline in ADR since 2023. Full-year ADR growth ended at 1.8%, trailing the average inflation rate of 2.7%.

How it was measured

The figures were compiled and analyzed by AirDNA, a short-term rental data and analytics provider. The data covers performance metrics for the U.S. short-term rental market during December 2025 and the full calendar year of 2025. AirDNA tracks listings and reservations across major platforms, including Airbnb and Vrbo, to calculate occupancy, ADR, RevPAR, and supply. The Repeat Rent Index (RRI) was calculated by comparing pricing changes for the same properties over time, thereby controlling for changes in the mix of available listings. The report did not disclose the exact number of individual properties in the underlying sample for this specific release, but it drew on its market-wide database of active listings.

Macroeconomic factors and supply growth

The short-term rental market in late 2025 operated against a backdrop of political and economic friction. AirDNA noted that the Trump Administration escalated its criticism of Federal Reserve Chair Jerome Powell in December 2025, including threats of legal action. During this period, data from the Bureau of Labor Statistics showed that year-over-year inflation remained elevated at 2.7%, with price pressures particularly strong in food and electricity. This prompted the Federal Reserve to pause its rate-cutting cycle.

The labor market also showed signs of stability, which supported the Fed’s decision to hold rates steady. Unemployment edged down to 4.4% in December from 4.5% in November, even though job growth was weaker than expected with only 50,000 jobs added, and the labor force participation rate slipped slightly to 62.4%.

In an unexpected policy move, the Administration directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities, which briefly pushed mortgage rates below 6%. Prior to this, Oxford Economics had forecast that mortgage rates would remain above 6% through 2027. According to Freddie Mac, the average 30-year mortgage rate declined from 6.85% in early June to approximately 6.10% by the end of December.

These shifting financial conditions influenced supply dynamics. U.S. short-term rental supply growth had slowed to a low point of 1.8% in July 2025, the weakest rate recorded by AirDNA. Following the decline in mortgage rates, supply growth recovered to 3.5% in November and registered at 3.4% in December, bringing total available listings to 1.66 million. AirDNA expected these lower rates to contribute to renewed supply growth in 2026, though mortgage rates stabilized back above 6% by the end of the year.

Diverging performance across locations

While national occupancy in 2025 was nearly identical to 2024, performance varied drastically by location. Among the top 50 U.S. markets, AirDNA observed an exact split: 25 markets recorded occupancy gains, while 25 markets saw declines.

San Francisco led the gains with a 4.9% increase in occupancy, while Oakland saw a 2.3% increase. AirDNA attributed these unit-level performance gains to regulatory constraints that limited competition from new entrants. Conversely, Washington, D.C. recorded a 4.4% decline in occupancy.

Several Gulf Coast markets also experienced significant occupancy growth in 2025. Panama City, Florida, saw occupancy rise 3.5%, followed by Santa Rosa and Rosemary Beach, Florida, at 3.4%. Gulf Shores, Alabama, and Mobile, Alabama, recorded a 3.1% increase, while Destin and Fort Walton Beach, Florida, saw a 2.5% gain.

The divergence was also apparent at the individual operator level. Among full-time hosts who were active in both 2024 and 2025, the average change in occupancy was centered near zero. However, the distribution was highly uneven, with nearly one in five hosts experiencing occupancy declines of 20% or more.

Pricing tiers and the K-shaped trend

The pricing data highlighted a K-shaped economic trend among travelers. High-income consumers continued to support premium leisure destinations, while budget-conscious travelers faced tighter constraints.

This trend was visible in the difference between ADR and RRI. In December, ADR grew 3.3% while the RRI grew 2.5%. Because ADR growth outpaced RRI, AirDNA concluded that new listings entering the market were positioning themselves at higher price points than the existing average.

Only resort markets managed to grow rates ahead of inflation in 2025. Coastal resort locations saw RRI grow more slowly than ADR, indicating a shift toward upscale positioning. Mid-sized cities also showed a division between RRI and ADR growth. In contrast, large urban and suburban cities posted the weakest ADR growth, and new entrants in those markets positioned themselves as more budget-friendly. Urban cores were the only location type to see declines in both ADR and RRI.

Price-tier analysis confirmed this division. Upscale and luxury properties posted stronger occupancy growth than budget and economy listings in nearly every month of 2025. Luxury occupancy was especially strong in January, aided by favorable snow conditions at ski resorts, and in April, due to the Spring Break calendar shift.

Forward pacing and the 2026 outlook

The year closed with signs of stabilizing lead times, which had been declining almost continuously since mid-2022. October 2025 posted the first meaningful year-over-year increase in lead times since January 2023. AirDNA suggested that if lead times stabilized alongside occupancy, it could make booking activity more predictable for hosts.

Pacing data at the end of December showed mixed trends for early 2026. While January and February paced for muted demand growth, March and April showed significant gains. March demand was pacing up 8.9% year-over-year, and April was up 11.4%, pointing to a strong Spring Break season.

June 2026 was pacing the fastest of any month, with 3.7 million nights already reserved in the U.S., representing a 24.2% increase over the same point in the prior year. AirDNA noted that these early bookings are often driven by repeat guests securing early-booking discounts.

In March 2026, Gulf Coast resort markets showed strong early demand, with several markets more than half occupied. Florida’s West Coast markets held the top seven spots for March occupancy. Popular ski destinations like Aspen and Snowmass, Vail and Avon, and Steamboat Springs in Colorado ranked among the top 15 markets. Orlando led in total demand among high-volume March markets, followed by Phoenix and Scottsdale, Arizona.

Additionally, the San Jose and Palo Alto market in California was preparing for the Super Bowl on February 7, 2026. Demand pacing for game day and the preceding day was nearly double the previous year’s level, and the ADR for February 7 rose to $230, a 74.3% increase over the same date in 2024.

What to take from it

The year-end data for 2025 provides several critical lessons for short-term rental operators and investors analyzing market dynamics:

• Monitor the gap between Average Daily Rate (ADR) and the Repeat Rent Index (RRI) in your local market to understand if new supply is undercutting or premiumizing the area.
• Do not rely on national demand trends to make local pricing decisions, as performance is highly polarized, with exactly half of the top markets growing and the other half declining.
• Watch local regulatory changes closely, as markets with strict entry barriers like San Francisco can see significant unit-level occupancy gains due to suppressed supply growth.
• Track lead-time stabilization trends in your specific region to adjust booking windows and optimize dynamic pricing algorithms ahead of peak seasons.