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hort-term vacation rentals outpaced traditional hotels across the US in Q2 2025, according to data from Key Data. The firm's Vacation Rental Market Index found that STRs led hotels by nine percentage points in RevPAR (revenue per available rental), demonstrating their resilience despite economic headwinds.
"This quarter's results show short-term rentals continue to offer a compelling value proposition," said Melanie Brown, VP of Data Insights at Key Data. "Demand held strong despite macroeconomic pressure."
However, beneath the surface lies a more complex market. While STRs attract capital, performance varies significantly across regions and operators. Market fundamentals and operational strategy now play a larger role in determining returns than the asset class itself.
Regional highlights include:
* Mid-Atlantic: 11% year-over-year RevPAR growth
* New England: 10% RevPAR increase due to premium pricing and strong seasonal demand
* Rocky Mountains: 9% RevPAR gain reflecting sustained travel interest
* Hawaii: 6% RevPAR growth maintaining rate strength in a high-cost market
* Southwest: Sole underperformer with a 4% RevPAR decline due to supply-driven rate compression
The widening performance gap reflects a shift in STR market dynamics. "Returns are no longer uniform," Brown noted. "Success depends on operators' ability to price dynamically, manage expenses, and respond to regional demand shifts."
Despite a strong Q2, warning signs emerge: forward occupancy for September is down 11% year-over-year and booking windows have shortened across key summer months. This compression forces travelers and operators to make quicker decisions with less visibility.
For asset managers and investors, the message is clear: STRs remain a high-performing asset class but require precision in a more volatile demand environment. "Some markets are accelerating, others are softening – and these trends aren't always easy to predict," Brown added.
