Q1 Trends and 2025 Outlook: What Key Data Is Seeing in the Short-Term Rental Market

In this episode of the Hospitable Hosts podcast, we take a deep dive into the current state of the short-term rental market in the US and Canada. Our special guest is Daniel Leifeld, Business Marketing Manager at Key Data, which provides business intelligence and benchmarking tools for the vacation rental space, helping property managers and hosts confidently navigate the competitive landscape and make informed business decisions.

Daniel shares actionable insights into the STR market in 2025 to help you better understand the patterns and adapt to the shifting conditions. The conversation covers how the short-term rental market performed overall in Q1 2025 and how that might change in Q2. Daniel also shares how property managers can speak to their owners about the changes in the market and what key metrics hosts should be tracking to understand how things are going in their business.

Press Play now to discover the current trends in the short-term rental market Key Data is observing and what changes we can expect in Q2 2025.

Do you prefer to read the highlights? We've got a summary of the key takeaways below.

Short-Term Rental Market Performance in Q1 2025

Talking about the US STR market trends, Daniel notes that Q1 showed mixed occupancy performance—some markets were up, while some saw a decline. "There are certainly some massive differences that are happening across the country, or I guess we should say the continent, because the other thing that's been a topic for the last three months has been what tariffs will do in Q1. We already saw it and started to see a decline in visitors," Daniel says.

Yet Key Data experts saw relatively positive results through the first quarter of this year, and there were a lot of strong markets across the US. "The Southwest US saw strong occupancy in Q1. Some Central Mountain regions remained stable, even compared to last year. And then you go onto the East Coast, and you have a lot of places that are way ahead of where they were last year, 10% ahead in Q1."

Daniel also points out that in Canada, occupancy rates were generally lower across all markets compared to 2024. "But some markets maintained pretty strong performance despite the dip because they increased rates during that period."

Impact of Tariffs on Travelers' Behavior

Tariffs apply to imported products, so their impact on the short-term rental industry is indirect. Yet, on April 5th, reservations per property decreased on average by 20% year over year. Daniel thinks that is happening because the stock market swings are making consumers unsure about what will happen, and that uncertainty doesn't allow them to book.

"I think many of those bookings will just come as a shorter stay. I've been in the industry since 2011, so I've seen much of this stuff play out. One thing about North American life, if you will, is you can't take away my vacation. And so I think a lot of these impacts will be seen more from international markets, whereas the local markets will be a lot more sustainable through this because people will not go on vacation outside of the US, or they'll go but won't go as far. So ensuring those drive markets are dialed in with your marketing strategy will be extremely important."

Increased Average Daily Rates

Daniel says they see "massive trend differences in all the different markets." Western US markets and many markets on the East Coast have seen steady or increased average daily rates. There are also a lot of markets that are down in occupancy but up in average daily rate.

"That's the most common thing we've seen across the US and Canada, where rates outpace occupancy. I'm not just talking about Q1. Looking forward to the rest of the year, we saw higher rates that covered the lost occupancy when we looked at pacing. So, having those higher rates has generated revenue this year and has covered the lost occupancy. But if those bookings continue downward, it won't be able to maintain."

Shifts in Booking Channels

Daniel points out they are seeing some changes in the booking channels people choose and a trend towards direct bookings. Airbnb and Vrbo remain the dominant platforms for short-term rentals, which travelers use to book accommodation. The most significant growth of vacation rental bookings as a percentage is at Booking.com, but Daniel notes they are "still very low on the totem pole when it comes to how many bookings they're getting."

"The biggest thing we see is that the people are commissioned out. If you're giving away 1% of your reservations to anybody, you're overpaying for something, right? And so we're seeing more and more people focus on direct bookings, and we are seeing a lift in that direct booking number. It's the fastest-growing category."

Listen to the full episode of the Hospitable Hosts podcast to learn more about the current STR market dynamics and find out what metrics you should be tracking to understand how you're performing against the market.