U.S. short-term rental occupancy rose to 57.2% in May 2026

On June 12, 2026, AirDNA reported that short-term rental occupancy in the United States averaged 57.2% in May 2026, representing a rise of 0.5% compared to the same month in the previous year. This modest increase marked a shift from the slight year-over-year occupancy declines recorded during the earlier months of 2026, signaling what the analytics firm described as the start of a more positive period for the industry.

The report, authored by Bram Gallagher, highlighted that despite softer demand growth and ongoing supply expansion, the short-term rental market showed clear signs of performance improvement. While listing growth remained modest due to broader economic pressures, existing operators managed to maintain pricing power, and booking pacing for the second half of 2026 pointed to a strong summer and autumn travel season.

What the data shows

According to the figures released by AirDNA, the average revenue per available rental, also known as RevPAR, increased 2.6% year-over-year to reach $147.97 in May 2026. The number of available listings reached 1.73 million across the United States, which represented a 3.0% increase compared to May 2025. Demand nights, which measure the actual nights booked by travelers, grew by 1.5% year-over-year, while total nights booked during the month rose 3.5% compared to the previous year.

The average daily rate, or ADR, for short-term rentals climbed to $258.91 in May 2026, representing a 2.1% increase from the prior year. This growth rate reflected a slowdown compared to April 2026, when ADR grew by 3.4%. AirDNA noted that this deceleration was consistent with historical trends, as ADR growth had hovered around 2% since October 2025. The slowdown was also attributed to a strong comparison period in May 2025, when ADR grew 3.6%, up from 1.9% in April 2025.

In contrast to the broader ADR growth, the Repeat Rent Index, which tracks pricing changes for existing operators by excluding the shift in the mix of active properties, rose 3.5% year-over-year in May 2026. This index consistently outpaced ADR growth since November 2025, suggesting that established operators are maintaining stronger pricing power than new entrants in the market.

The data also revealed significant variation across different geographic markets. Urban markets recorded the slowest supply growth of any location type in May 2026. Several large metropolitan areas experienced declines in available listings, with the Bay Area, New York City, and New Orleans seeing the most notable drops due to local regulatory measures. Urban markets were also the only location category to record year-over-year declines in both demand and occupancy, as travelers increasingly chose mid-sized cities and small towns instead.

Forward-looking pacing data for the Fourth of July holiday weekend showed substantial demand growth across the nation. Nationwide booking demand for the holiday was pacing 10.3% ahead of the same period in the previous year. Several metropolitan areas experienced particularly strong pacing, with Miami pacing 68% ahead of the prior year, followed by Philadelphia at 59%, Houston at 38%, Kansas City at 37%, and Washington, DC, at 35%. Additionally, regional destinations saw a major holiday demand boost compared to adjacent weekends, with Big Bear, California, experiencing a 116% increase in demand compared to the average of the weekends immediately preceding and following the holiday.

How it was measured

The performance metrics were compiled and analyzed by AirDNA, a short-term rental data and analytics provider. The figures represent performance data for the month of May 2026, with the report published on June 12, 2026, and subsequently updated on June 16, 2026. The data was gathered from active listings on short-term rental platforms, representing a total supply of 1.73 million available listings in the United States.

To measure pricing dynamics without the distortion of changing inventory, AirDNA utilized its Repeat Rent Index. This index isolates pricing changes by tracking the rates of the same properties over time, thereby excluding the mix shift that occurs when new, larger, or more expensive properties enter the market and skew the average daily rate. The pacing metrics for future bookings, such as the Fourth of July demand, were calculated by comparing active reservations for the holiday weekend against reservation levels held at the exact same point in the prior year. To isolate the specific holiday demand boost, AirDNA compared booking levels for the holiday weekend directly against the average booking levels of the weekends immediately before and after the holiday.

Macroeconomic forces moving the numbers

The short-term rental market in May 2026 was heavily influenced by broader economic conditions, including labor market trends, inflation, and geopolitical events. According to the May jobs report from the Bureau of Labor Statistics, the labor market added a substantial number of jobs, with the leisure and hospitality sector alone contributing 70,000 new positions. While this growth coincided with improved performance in the hotel sector, the majority of the job gains occurred in food service and leisure activities rather than lodging. The national unemployment rate remained steady at 4.3%, which was consistent with the low levels observed over the preceding two years.

Despite these positive employment figures, the labor market exhibited underlying rigidity, with hiring and firing rates remaining near lows not seen since the recovery from the Great Recession. Approximately 2 million workers remained classified as long-term unemployed. This rigidity suggested that both businesses and workers were delaying major employment decisions while waiting for clearer signals regarding energy prices and the productivity impacts of investments in artificial intelligence.

Inflation also remained a persistent concern, with the Consumer Price Index registering a 4.2% year-over-year increase in May 2026. This high inflation rate was driven in part by policies implemented by the Trump Administration, including broad tariffs announced in April 2025 and the subsequent war in Iran. The conflict led to the closure of the Strait of Hormuz, which disrupted energy supplies and pushed energy prices higher. These inflationary pressures reduced household discretionary spending, which in turn influenced consumer booking behavior and pricing strategies in the short-term rental sector.

The combination of a stable labor market and high inflation reduced the likelihood of interest rate cuts by the Federal Reserve, with financial markets increasingly expecting a rate hike in December 2026. High interest rates continued to affect the housing market and short-term rental supply. While mortgage rates briefly fell below 6% in February 2026, prompting expectations of an investment boom, the conflict in the Strait of Hormuz quickly pushed mortgage rates back toward 6.5%. As a result, the anticipated spring home sales boom did not occur, and the growth of available short-term rental listings remained constrained at 3.0% in May.

How performance affected operators

The divergence between the average daily rate and the Repeat Rent Index had direct implications for different classes of short-term rental operators. Existing operators, who benefited from established review histories and steady historical demand, were able to maintain stronger pricing power in an uncertain economic environment. This was reflected in the 3.5% year-over-year increase in the Repeat Rent Index. By contrast, newer listings were forced to compete more aggressively on price to attract bookings, as inflation squeezed household budgets and made travelers more price-sensitive. This pricing competition from new entrants dragged down the overall ADR growth to 2.1%.

This pricing dynamic was not uniform across all markets. Destination and resort markets, which typically command higher nightly rates and rely almost exclusively on leisure travel, showed the largest gap between Repeat Rent Index growth and ADR growth. Operators in these premium leisure markets faced highly price-sensitive travelers, making the pricing advantage of established listings over new listings even more pronounced.

Operators in urban markets faced a different set of challenges. Heavy regulatory environments in major metropolitan areas, particularly in the Bay Area, New York City, and New Orleans, continued to restrict short-term rental supply, leading to declines in available listings in those regions. Furthermore, urban markets were the only location type to see declines in both demand and occupancy year-over-year, as travelers shifted their preferences toward mid-sized cities and small towns, benefiting operators in those smaller markets.

“Inflation can put pressure on household budgets and reduce discretionary spending, which may encourage newer listings to compete more aggressively on price,” Bram Gallagher, Director of Economics and Forecasting at AirDNA, stated in the report.

What the figures did not tell you

While the report provided a comprehensive overview of the U.S. short-term rental market, several critical details were omitted from the published figures. The data did not specify the performance or listing volumes of individual platforms, making it impossible to determine which platform was driving the majority of the growth or experiencing the greatest impact from urban regulations. The report also did not disclose the exact number of properties removed from the market due to regulations in New York City, New Orleans, or the Bay Area, nor did it outline the specific nature of the ordinances causing these supply declines.

Additionally, while the report highlighted strong pacing for the scheduled FIFA World Cup, it did not provide specific booking numbers or occupancy forecasts for the host cities, noting that match schedules for July dates had not yet been announced at the time of publication. The pacing figures for the Fourth of July holiday weekend were presented as percentage increases rather than absolute booking counts, which left the actual volume of expected travelers unclear. Finally, the report did not provide a breakdown of performance by property size or bedroom count, which prevents operators from knowing whether larger estate homes or smaller apartments were driving the occupancy and pricing trends.

What to take from it

The performance metrics from May 2026 offer several critical lessons for short-term rental hosts, property managers, and investors looking to navigate the remainder of the year.

• Monitor the gap between ADR and RRI: Operators should compare their own year-over-year rate changes against both local ADR and Repeat Rent Index trends to determine if they are fully utilizing their review history or underpricing their properties.
• Track localized supply regulations: Investors should closely monitor regulatory actions in major urban centers like New York and New Orleans, as supply constraints can drive demand toward adjacent mid-sized cities and suburban markets.
• Capitalize on event-driven demand: Property managers should adjust their pricing and booking windows well in advance of major national events, such as the 250th Anniversary of the United States and the World Cup, to capture early pacing premiums.
• Evaluate regional demand shifts: Hosts in drive-to destinations and mountain regions should focus marketing efforts on regional travelers, who are increasingly favoring small towns and regional lakes over expensive tier-one metropolitan areas.