The Growth of the Short-Term Rental Market & Why It Matters
Short Term Rentals: Here to stay
The short-term rental (STR) sector has moved well beyond its early “peer-to-peer spare-room” phase. Today, it’s a major force in global lodging and property investment. For property owners and managers, the opportunities are substantial — provided you understand the drivers, the benefits, and the risks.
Market Size & Growth Trends
Globally, the short-term rental market was valued at roughly USD $130-140 billion in 2025.
Forecasts project the market to grow to between USD $200-400 billion+ over the next 5-10 years, depending on region and study.
For example, one report estimates a compound annual growth rate (CAGR) around 10-11% from 2025-2035.
In the U.S., the market size was estimated at tens of billions and expected to continue growing strongly.
So in short: this is not a niche sector any more — it’s a mainstream lodging alternative and real estate strategy.
Key Drivers of Growth
Several major forces are fueling this expansion:
Changing traveler preferences – More guests are looking for unique, home-style, local-experience stays rather than traditional hotel rooms.
Online platforms & technology – Platforms like Airbnb, Vrbo, booking software and dynamic pricing engines make listing, managing and booking STRs far easier than in the past.
Remote work and “bleisure” stays – The rise of remote or flexible work means longer stays, blended leisure-business travel, and demand for accommodation that offers more than just a bed.
Global travel rebound & increased disposable income – With tourism recovering (post-pandemic) and budgets for travel rising, the STR segment benefits strongly.
Investment interest and professionalization – Many property owners and management companies are scaling STR operations, turning it into a more institutional asset class rather than a hobby.
Benefits for Property Owners and Investors
From a property-owner perspective, here are some of the compelling advantages of participating in the STR market:
Higher revenue potential: Because STRs can command higher nightly or weekly rates than long-term leases (especially in attractive locations), there’s potential for greater returns.
More control over property condition: With turnover between stays (guests move in and out) there’s an opportunity for regular cleaning, inspections, and refreshes — helping maintain the property’s condition and value.
Flexible usage: Owners/management may have flexibility to block dates for their own use, adjust pricing based on demand, or pivot the strategy if market conditions change.
Diversified income stream: STRs represent an income channel that is somewhat independent of traditional long-term tenant dynamics — which can add resilience to your property portfolio.
Appeal to changing traveler segments: By offering well-managed, designed, furnished short-term units, you tap into demand from vacationers, remote-workers, “staycationers”, and business/leisure hybrids.
Things to Keep in Mind (Risks & Considerations)
Growth and benefits notwithstanding, there are some important caveats for owners/investors:
Regulation and compliance: Many cities are introducing or tightening regulations around short-term rentals (licensing, zoning, safety, occupancy rules). These can affect supply, cost, and legality.
Market saturation and competition: In some prime areas, supply is increasing rapidly, which can lead to downward pressure on occupancy or rates.
Seasonality & volatility: STR income may fluctuate considerably due to season, local events, economic conditions, or travel trends.
Operational demands: While many owners outsource to management companies, STRs typically involve more operational complexity (cleaning, guest turnover, marketing, dynamic pricing) than long-term leasing.
Maintenance intensity: Turnover and guest usage can increase wear and tear, meaning you’ll want a good program for inspections, maintenance and asset refresh.
What This Means for Property Owners
If you’re a property owner or investor considering the STR market, the broad take-aways are:
The market is large and growing.
With the right location, operational infrastructure, and cost control, STRs can offer attractive returns and asset-value upside.
But success isn’t automatic — it requires good management, clarity on local regulation, and a solid operational model.
If you currently manage long-term leases, consider how an STR strategy might complement or enhance your portfolio — whether by converting selected units, leveraging a property-management partner, or exploring mixed-use/“mid-term” stays.
For owners working with a professional property-management company (or considering doing so), the STR model offers a way to stay ahead of traveler trends, command higher rates, and keep your asset in strong condition.
Final Thoughts
The short-term rental market isn’t just booming — it’s evolving into a well-established lodging & investment channel. For property owners who are proactive, strategic and operationally ready, it presents an exciting opportunity. The global numbers speak for themselves: strong growth, strong demand, and a favorable tailwind from traveler behaviour, technology, and flexible work/lifestyle trends.
If you’d like help evaluating whether your property is suitable for short-term rental, comparing STR vs long-term strategies, or understanding how to partner with a property-management company for STR operations — RPM wouold be be happy to help you walk through the details and run some tailored numbers.
