What 2026 Will Look Like for STRs

[MUSIC] Welcome to the SDR Data Lab. [MUSIC] Hello and welcome to another edition of the SCR Data Lab. I'm Jamie Lane, Chief Economist at RDNA. And I've got a special edition of our podcast today. We are playing a recording from this week at the Data and Revenue Management Conference that was held in San Destin, Florida. And this was a fireside chat moderated by Simon Lehman with myself and Pedro Borges, the Director of Data Science at Price Labs. And today's podcast, we sort of dive into what's the expectations for 2026, what's happening sort of behind the headlines, the demand patterns that both us at RDNA and Pedro, what he's seeing at Price Labs. Some of the changes we've seen in the data around fees and how that's impacting things, how we expect to actually major changes in the OTAs to evolve over time. What are KPIs that were focused on and maybe others should be focused on as well, which maybe KPIs are overrated. And some, I think, really fun banter on what's happening in the industry today. So with no further ado, I hope you enjoy. All right, fantastic. Let's kick this live stream off here at Darm 2025. It's been a beautiful destination of this. Florida, I have Pedro Borges from Price Labs and Jamie Lane. That doesn't need introduction from RDNA. Pedro is the first time on my Pedro today. It's actually quite funny. I think I've seen Jamie some years more often than my own children. So that's what we do at the conferences, right? So let's talk about data. Let's talk about 2025. That's what we're going to talk about and what is data signaling. Also going to look out in the future as well. We've seen an interesting presentation from Jason and Melanie this morning as well. And it's been obviously very US-centric and this live stream is maybe also some international attendance as well. So we want to look at a big broader as well in general. But maybe as a start, Pedro, how, from a data standpoint, how do you view 2025? What did you read out of that? Sure. You know, this is a hard question because everybody says it depends. You know, it's a very interesting presentation, everything else, but how would you summarize 25? Gotcha. Okay. And you want to know in terms of like the technical side of like data or do you want to know about, you know, market trends? Market trends. Yeah. Market trends. Sure. I mean, I think that we're coming, I'll start with Jamie early today. And I think we're coming to a point where things are stabilizing. So, you know, there's been a lot of volatility in the last few years. But now things are kind of coming to a steady state, right? The supply side, the supply is kind of becoming more steady, right? But the man is also a little bit more steady. So, I mean, it's hard to talk about in general because of course markets are different. But that's one thing that we're seeing. So the stabilization, I want to pick that up quickly. Yeah. So you go a little bit deeper. I mean, that means we're seeing less fluctuations in terms of the classical STR metrics. Yeah. Essentially. Some stabilization in terms of graph power, you know, occupancy and even ADR, right? And so I think that means that property managers have to manage their listings with that scenario in mind. So they have to think about, hey, how do I differentiate myself in a situation where, you know, I can't just, you know, take advantage of a really favorable market condition where people have entered the market. And so that's where, you know, they become more professional, right? Using, you know, good tools, right? Many more. I think it becomes really powerful. I think maybe we can talk about this later in this chat, you know, but I think that's an important point for 2025. I'm going into 2026. Was it a market correction? Would you call it a market correction in 2005 when you hear what Peter says? How did ADNA look at that? Yeah. And we see it the same way. And occupancy for all intents and purposes was like flat this year. Yeah. And then I, and I love this analogy of like a rising tide lifts all boats. Like we saw that in 2020, 2021. Yeah. And then there's analogy when this tide goes out, like you see who's not wearing their, or the sun trunks, like we saw that in 2023, 2024. And now in 2025, like, it's about stealing share, right? It's like a pirate fight out there of like, how can I steal from someone else? Or what, how the market trends actually dictating who outperforms versus underperforms? This is, and as Jason and Melanie showed this morning, like the K-shaped economy is real. Yeah. And that's not just in the US, like that is a global phenomenon. I mean, we've pulled the data for Europe, for APAC, for Latin, like luxury outperforming budget underperforming. It's true everywhere. And you think about the sort of top end, top income producing like people in the US, like those are a lot of the people in Europe too that are, are driving the global economy because travel is a global good and you go to any country in Europe, like what is their top and bound country from? It's the United States. So the American traveler, not just dictates US trends, but also dictates global trends, and then you have the opposite. Now it's happening with the European travel and the Canadian traveler really impacting the US trends. But I would challenge that. Is that so significant? If you look at a country like France where 80% of the demand is French, right? France is the ally. In general, France, the UK and the US are the ones that generate both of their demand domestically. But you go to just about every other country in Europe, like Iceland, it's 99% international. Yeah, of course. Yeah. I mean, who would make holidays in Iceland if you lived there? You want to go to a former country. Yeah. Do you see the same phenomenon? I thought that very interesting, and I was chasing this morning, is that the death from the mid-market? Yeah. I mean, maybe, you know, I think, but I think we'd just see the same phenomenon, like, yeah, nothing. I don't know if I have much to add there, because I think exactly what Jamie said, you know. How does that result into the supply side? You know, one thing I thought was interesting this morning, when I saw Jamie talking about 14 million properties, right, and my number was always 10. So that's 40% growth in a way. But how is that going to affect the supply growth as well? We'll clarify that number, because we're looking at the same inventory. So 14 million properties, good number of those are cross listed. So just because they're cross listed doesn't mean we don't have to track them, so. Yeah. So throwing cross listed, it's about 10 million out there that are still the number. Yeah. I'm glad. So I thought I'd say something wrong. And, but standing up on stage, we're still tracking 14 million properties. It's a lot out there. And then you add in hotels and other listings, like, yes, there's a lot to track on a day-to-day basis. So let's go a little bit deeper there, Pedro, as a revenue management company from Price Labs. How does that, that K economy, if we call it, and I thought I was an interesting expression this morning, how does that going to affect the pricing on these different tiers? What do you see different fluctuations on these tiers? We do. I think that's maybe about difficult. That's one of the challenges of pricing, right, because it's easier to price when you have a large sample size. So if you're in the middle right of the pack, you have a lot of similar listings, good comps, right? And so it becomes easier to price. But if you're like a really expensive or a luxury listing, then the number of comps that you have available are much smaller, data set, right? And so we try to, you know, and so you have to be careful about when you look for comps in that situation. And so, yeah, we're seeing that there are a lot more, I don't know, there's a lot of growth in the luxury industry. Maybe that means that we'll have, you know, larger compsets for these listings, right? Because that will become a little bit of a bigger market, but it is part of the challenge of pricing luxury listings. But with that mid market shape, that we're talking about and said this is a non-theperforming market. And what did you hear that the millennials have killed the mid market this morning? I think about that was at an interesting point. How does that affect the market and the supply overall, is that, do we going to see a decline there? Yeah. So, right now, we're at the lowest level of supply growth, like in a non-COVID period. Then we've seen in the entire tracking of the industry. And that's true in US, we're generating about 3% supply growth, like you rewind three years ago, industry is going 20%. Europe right now supplies going like 3%. We've seen a big shift down in terms of overall supply growth. Then you sort of dig into it, and you look at underperforming property managers and hosts versus outperforming and saying in terms of review scores. This is where the middle is disappearing. If you're an underperforming property manager, like average property manager review scores of 4.7. If you're generating below 4.7, you lost 3% of your supply this year on average. Wow. If you're an individual host, you lost like 5% of your supply on average. So, if you're not, and it's the OTAs sort of promoting the guest favorites, the top 1%, the top 5%, it's Burbo's now switching to Premier hosts as being tracked on a property level basis. If you go and search any of these OTAs, booking included, if you're not getting one of these badges, if you're not a 49er above, you're not showing up until page 2, page 3, and essentially, if you then do not have a direct booking strategy, you're not meeting home over expectations and they're going to turn out. And it's got to get worse because we're going to see more marching compression. I think there's an interesting scenario where we do see some listing, not some, but I know Branchesky mentioned on his latest call, he was seeing that professional property managers they had a really low star score, but they had higher ref power. Yeah, of course. Yeah, so there's their ways of dealing with having a large star rating, while still maintaining higher ref power, and that becomes the strategy, that becomes the professional, that becomes what professional property managers bring to the table. Because they have the strategy, they have the knowledge of distribution, knowledge of pricing, so they can make listings that maybe don't get the best reviews performed really well. Totally with you, and I agree, and I want to quickly pick up Jamie before, in terms of supply growth, or like a really flattening out in terms of supply, but what you didn't mention, which I thought is interesting, do you separate that, how much of that is regulatory driven? Yep, and you're up so much, so Spain listings are down 6%, Greece listings are down, Italy listings are down, so you're actually seeing contraction in the market, and it's primarily regulation driven. And the US, not so much, like a lot of the markets that are seeing weakness and even falling supply, it's not because there's new regulation, it's because the markets aren't really performing, home values are really high, and you just do not see new investors and people bringing on listings as much as they were before, you still see similar levels of churn, and there's so much churn that happens in this industry. So if you're not getting new people in, supply starts coming down, so there's a lot of markets for just underperforming, and it's a perpetual thing, all right, if I can't cover the mortgage, there's no point in owning this asset for me to use two weeks a year, so I'm gonna get rid of it, and maybe the next buyer that's gonna come in, they're willing to pay 10-20% less, but they're not running it out as a short-term rental, they're using it as their sort of leisure asset, and like now the industry's lost it, and it was the opposite effect that we sell in 2020 and 2021, because home values were so low, interest rates were cheap, and listings were outperforming, high levels they ever were, we saw this massive investors come in, and now most markets, it doesn't make, most short-term rentals aren't gonna cash flow. So the next shift I want to allude to that one is obviously midterm rentals as well, right, so from a mid, short-term rental to midterm, and I would like to know from both, how do you track that midterm rental market, because obviously you can imagine Barcelona 257 property managers will move into midterm rental, or they'll lose their property, how do you track that a price lapse as well in terms of data? Yeah, I mean I think it's so a relatively small market, and our last estimate was 6% of listings were midterm rentals, and so not that is impressive, but that's all the channel. Yes, there are. Is that being in the US, like furnished finders and others? Yeah, yeah, that's true, people converting from Airbnb into midterm rentals, I guess that's made, there's an upward trend there, but it's maybe something new, you know, and so people are still thinking about like, hey, how to price it, right, they're on really good solutions out there yet, so that's it, that's it, that's it. Is that a segment that you guys are looking at more and more, because you're in that shift as well? Yeah, we are, we've been thinking about this for maybe a year now, and so we've been targeting that segment and thinking about pricing for those listings, right, so they, for them, right, you can't think about the same data source, you can think about the same pricing algorithms, right, so everything changes, right, it doesn't make sense anymore to talk about daily plus price fluctuations, right, because we're selling, you know, 30 days at a time, and so all of that comes into how we think about midterm rentals. Yeah, and the PMS has haven't picked that up yet, so I was actually on the phone yesterday with Jeff Hirst. Oh, really? Yeah, I've had him on the podcast, so it's going to be stream soon. Yeah, so Jeff is the CEO of Furnish Finder, was the former head of Verbeaux, home away, and we're doing a big research report with them on the rise of midterm rental demand. Super cool. Yeah, and so where Pedro said only 6% of listings, like most listings though, you can't like bifurcate into short term and midterm, like the managers that are doing really well, the homeowners are sort of blending that midterm and short term rental strategy of, let's say you're in Boston, and like international demand and peaks during the summer, like you've got so many people coming in and then you get in the winter, like there's no tours coming out there, but you've got all these doctors, nurses, students, and you can sort of blend in a month to month, three month long booking, and where you're not going to generate a whole bunch of one day, two days, so that blended strategy works really well. And then in markets like New York, Denver, Los Angeles, San Francisco, where regulation has come in, like short term rentals are banned in New York. We've seen the overall amount of listings on Airbnb only drop about 15%. Why is that? Like it's not like the homeowners were all of a sudden bring it into the long term rental market, they had reasons why it wasn't in, and so now they've shifted them to midterm rentals, they're doing three month long stays out of time, and like, yeah, overall demand is down. Yeah, overall rates have cratered, because the rate you're going to get for a midterm stay is not the rate you're going to get for a short term stay, but we have not seen a mass return of listings back into the housing market for New York, because these listings were never going to be long term rentals to begin with. So let's talk about what actually matters in terms of metrics. So you guys are, I call yourself data nerds, right? Yeah, of course. But that's not the average you know, you're a very small minority in this industry. And we talk, we can talk about metrics all day long, every day, and we have all these abbreviations and it's overwhelming, but what actually matters? And I would like to kick this off with you, you know, what, like, for a property manager, for a PMC, what metrics do really matter when they look at data, and this area is going to be a shift, then they need to look at things that they don't look at. I mean, I think not, you know, I mean, I think there won't be a shift, we'll see. But I think in general, the idea of focusing on these past data points, you know, adjusted by leading indicators is generally the strategy, right? So what about that is like, hey, you know, how was that book last year? You know, what was, what was, what was the way, what was the overall occupancy? And then adjusts by basing, right? And I think that's, I'm really basic way of looking at a strategy that just works, right? It's worked for hotels for, you know, whatever, 15 years, 20 years, whatever, how many years, hotels have been doing revenue management. And so it has to work for, you know, SDRs as well. And there's no need to like complicate that too much. I mean, there are other indicators that you can look at that could be interesting, but in general, I think that covers, you know. So what are the key metrics for you? The metrics past occupancy, past ADR, and then leading indicators for future occupancy and ADR coming in, you know, and yeah, covers. So ref par is overhyped in our industry? I mean, if you think of occupancy together with ADR, right, to get ref par, so I don't know, it's about the same. Yeah, I think it's. Yeah. Yeah. How do you view that? Yeah. So five years ago, I left the hotel industry to come into shorter models. And the hotel industry is pushing really heavy into go par, trev par, and essentially measures of profitability in profitability, not measured at a management company level. Like I know most property managers room, like, and yeah, I care about like how profitable your business are. But ultimately, this major stakeholders in this industry are the homeowners. And like, we do not have a key measure of how profitable it is for them, I mean, as investors of these million dollar assets, half a million dollar asset, like, are they actually in owning that asset generating cash flow or not? And like, ultimately, like if they're generating profits, they're going to buy more short terminals. They're going to add more inventory into those existing property managers, not like they're going to hire 20 property managers for the 20 different assets. They're going to hire one and generally let that person run if they're doing it properly. And I think better measure of like all the expenses that go into running a short terminal. And it's not just your management fee, but it's insurance. Insurance has been crushing homeowners over the past two years. Property taxes have been crushing homeowners over the last few years. And if you not have a holistic view of like, what's actually impacting your homeowners and their ability to continue to operate these assets, like, I don't think you're a true partner with that homeowner, like, I think many of us say that we are. So while the market is more compressing, we need to think more and harder about profitability in general, right? And now we have also OTAs ranking up fees and changing fee structures, and that has a massive impact as well, right? Yeah, for sure. And it's had a massive impact on our data. Yeah. It has. Yeah. And we both try. So explain that just quickly. Yeah, so the OTAs move to essentially all in pricing. So any guest that goes and searches Airbnb Verbo, instead of seeing the nightly rate, and then a breakdown for the cleaning fee, the service fee, the admin fee, the booking fee. Like, I mean, that's my favorite fee. And it was, and we were all seeing it on TikTok Instagram, like, everyone complaining, like, I go and book this $100 night rental, and I ended up being $500, like, for a single night, like, how does this happen? And I was like, well, you booked a property with a $350 cleaning fee, like, that's what happens. Like, short term rentals aren't meant to book for one night. But essentially, what I think though T.H. found was that if you hide those fees, I'm not to display them. Like, customers actually convert better, like in that concomition. And so when you go in search and you see that $500, like, that that's going to be the $500, maybe with some taxes on top, that he ended up playing, and that by nickeling and dying and adding all that up when you go to checkout, like, you lose a lot of people in that checkout process. So they made that change. It absolutely impacted how we scrape, collect the data. And we had a lot of, make a lot of changes through our process. But ultimately, later DNA, we've always included cleaning fee in the total revenue that we report back. Yeah. Because our goal was getting to what is host take home amount. So we are excluding fees. So all this changes and fees, like, we just had to make sure we're tracking it the right way. And ultimately, it doesn't impact our revenue or our ADRs that we're reporting back. But if you go and now look out at total prices, and the rates that people are sort of reporting for your competitors, you do need to have a sense of, like, what their fee structure is, what their cleaning fees are, and that really helps get a better understanding there. How did that affect you algorithm as well? Yeah. I think it's similar, you know, like, it changes the way that we collect the data and that we display the data, but we try and do it in a way that doesn't affect, you know, anything else, right? The underlying platform from the streets, continue working the same way. We do think that, you know, there will be a time when we won't be able to, like, estimate very well some of these fees, right? So cleaning fee, service fee, today, we're able to get it. But there might be a time when we aren't. So we're moving towards, like, an all-inclusive type of fee. So we're migrating, we've been testing, you know, some changes, and we're migrating everything to all inclusive eventually. Are there any questions from the audience at all? Any questions? This is your chance. And our work, it will do a lot of work to stay. Is there a way they are able to capture that when you're going to speed up? Yeah, we do. So the question was, you know, if they capture the average length of stay and length of stay, right? Yeah, like, I don't know, like, like, like, 10% discount for weekly stays, that kind of thing is that being picked up in comp sets. It does. Yeah, yeah. So it does, like, increase the complexity of collecting that data a lot, right? Because now just a date doesn't have a price, right? It has multiple prices depending on the length of stay, but that's part of, you know, the scraping that we do is we determine, you know, what's the price for different lengths to stay. And so it gets us there. And we do the same thing. So when we do a scrape, we'll see, like, a 10-day block go unavailable, we'll then group all those 10 days together, give them a reservation number. And then when our scraping will do one-day stays, we'll do seven-day stays, we'll do month-long stays, we'll see what the discount is for those. And so when we're estimating the revenue for that, we'll then apply the right discount back and given what that length of stay is. And then we actually show been smarting for that. So you can look at any property manager and see, I mean, okay, this competitor's doing 10% this one's doing 20%. This one's doing 30% on weekly or monthly stays, and you can see how they differ. And then, length of state trends has been a big one over the past five years. So average length of stay in general is about four days, but it can vary dramatically by much. Yeah. So imagine we have a crystal ball here when we're looking into this crystal ball for 2026. What are your predictions? And what is the data telling you? It's a very lame prediction. I mean, I think that 2025 is very stable here, and I think that 26 is going to be a continuation of that. So it's nothing really exciting, you know, but plenty for that, plenty of, for a year without growth, right? A year where you're fighting for a market share, right? You're not kind of like going into like green new passers, right? This is all about market share. And so I think that's the, that's how the competitive landscape is going to look like in 2026. So if you could give a property manager advice in relation to data and everything else for 2026, what should they continue to do or should do? I mean, I think, you know, expanding, you know, revenue, not through inventory, but through like optimizing what you have, right? Or learning how to, I mean, maybe you can expand inventory as well, but, you know, learning how to optimize what you have, I think it's very important, right? Because that's where the competitive advantage comes from, right? It's not about acquiring, of course, things that's about being better than your, you know, next reading. Yeah. What's actually, is there a number out there that I've been thinking about this for a long time and as revenue management came into our industry, you know, the adoption rate was pretty slow. But is there, is there a high level number of, let's say, professional property managers who use revenue management solutions nowadays? Yeah. I would say it's probably in like the 10 to 15 percent range. What? Yeah. So I've got a number because we track all the rates for across the industry, we see it's about 30% using revenue management for property managers, we see it's about price less. It's about 60% that we see like high variability of like rates and like, yeah, I mean, we have the four, four, four property managers. So those with 20 more listings, like very high, I'm not all, I think it's crazy that 40% of property managers aren't using this. This is like, he says 90, I say it's much lower, but I think he says it's much lower. Yeah. Yeah. Yeah. We can define like what rather like using it differently, right? Yeah. Yeah. I think that's the difference. I've got, yeah. Yeah. But I'm, yeah. So what does AirDNA's crystal ball to last on 2026? So I've got a whole 30 minute session tomorrow morning on the outlook for 2026, but I'll give you the highlights. Yeah. The rule cup is going to matter for next year. Is it? I wanted to ask that question this morning because I'm not convinced that it's, no, you guys know how to play soccer in the U.S. as well. I mean, it's interesting. I don't think the soccer is going to matter much. Okay. It's the party. Yeah. I mean, that's why. I mean, go look American footballs because of the cheerleaders. Americans actually drove more in-down demand to Qatar and to Russia than any other country for the world cup. So the fact that Americans aren't interested. Americans also have money and they're willing to travel and it doesn't take a whole lot of people traveling to drive a lot of inbound demand. So, but you're going to see it and I'm going to sort of call out tomorrow morning the top 10 countries that are going to, we just going to see the drive inbound demand. And then I'm, and that was sort of a joke, but my outlook for next year is maybe a little bit pessimistic because I do think this year is the lowest supply growth. We will see and that there's some confluent factors of home values are coming down. Interest rates are slowly coming down. Overall revpars have edged up and that is making it more attractive for supply to actually come in. And I think we're going to start seeing more and more supply growth next year. I don't think demand is going to be able to keep up. So next year could be another negative year for occupancy where this year was essentially flat, slightly positive. And so if that happens, like pricing power could have rode a bit more. And so our outlook is like 1% down on occupancy, 1.5% increase in ADR, which means that power up half a percent. And like, if that doesn't come true, like maybe the supply doesn't come to head, like, I don't think we're going to have much more pricing power. And like, so if occupancy is flat, we have 1.2% rep far growth and that's the upside. And inflation is going to be 2.5% like, it's, it's not a happy story for most companies, unless you're growing your inventory, unless you're scaling in ways to make your, your business more efficient. How did your predictions at the ARM 2024 compared to 25 come up? Well, I wasn't I didn't speak last year, but you made some predictions too. I did. I mean, they generally came true. We called for occupancy to be slightly up with modern pricing power. You look back on it, like occupancy predictions were spot on. It didn't come true where the pricing power, it wasn't as strong as we were expecting. And I think a big piece of that was the erosion of occupancy on the lower tier listings, which was unexpected. It really, I mean, it happened after the great liberation day. And certainly skyrocketed. So we're really worried about inflation and what tariffs we're going to mean for goods for their fixed costs. They're going to have to pay anyway and we saw them really starting to pull back and forward planning. They weren't willing to book and Melanie showed it, like, you looked in May for forward pricing for the summer, like, pacing was way down. Like, August actually ended up, ended up positive, but it took a lot of discounting to get to it. Virgo talked about it on their, an expedient on their earnings call. Like the only thing that led them to have a good quarter was that they rolled out their discounting platform where they're allowing property managers to offer different discounts. Like Airbnb, again, they're like, it was looking to be a bad summer. We rolled out, reserved now, pay later. All of a sudden, like, people started booking, but like, these are, these are things that like only really work when people are appealing pinched. Awesome. Guys, we unfortunately have to wrap this up also to the audience who is listening to us on the live stream. Thank you very much for attending. Thank you, Jamie and good luck tomorrow as well and thank you Pedro and then have a wonderful Christmas period as well. I appreciate it. Thanks a lot.