• 2025 should be a relatively calm year for Airbnb and Vrbo hosts, according to a new forecast.
• Occupancy rates are expected to remain the same or improve a bit, while supply won't increase much.
• Travelers are interested in houses with six or more bedrooms that cost relatively little per night.

Airbnb and Vrbo hosts can expect more consistency in 2025, according to a new report from industry analytics firm AirDNA.

"There's going to be a bit more stability," Bram Gallagher, director of economics and forecasting at AirDNA, told Business Insider. "The market is in a more mature phase compared to where it was five, even 10 years ago."

The short-term-rental market's roller coaster kicked off in 2020, when a surge in travel brought hosts record profits. An influx of new properties opened up, leading to a correction. Hosts have been adjusting their expectations ever since, sometimes lowering prices to remain competitive.

2024 has been an improvement for hosts in some ways. Demand for short-term rentals, as measured by the number of nights booked, grew 7% compared to 2023. Occupancy rates, the number of nights a month a rental is booked, declined from February 2022 to April 2024, but have been relatively constant since.

There are early signs that the more stable climate will translate to better returns for hosts in 2025. AirDNA measures a rental's expected revenue using a measure called RevPAR — or revenue per available rental, which combines a unit's average daily rate with its region's occupancy rate. For two years the average RevPAR declined, meaning hosts could expect to bring in less revenue than the year prior. RevPAR forecasts for 2025 have turned positive.

"We're going to be seeing some gradual improvement from here on out," Gallagher said.

Here are 3 predictions AirDNA has for hosts in the new year.

1. Occupancy levels will stay about the same

Occupancy rates went through a historic whiplash over the past four years. First, a lower number of overall listings following COVID-19 lockdowns met a nationwide surge in stir-crazy travelers looking for more space, which produced some of the highest occupancy rates in industry history — hitting a peak of 61.9% in February 2022.

Then, a flood of new properties spurred by an investor boom intensified the competition for bookings, pushing occupancy rates down to 54% in April 2024.

Rates settled around the mid-50s this year, and AirDNA expects occupancy rates to stay around that mark in 2025.

"It's such a slight increase, but we're going to be holding on to the gains that we've got this year," Gallagher told BI.

2. The number of new Airbnbs and Vrbos has slowed, so there's less competition

The post-pandemic explosion of new Airbnb and Vrbo listings is likely over.

"Supply is going to continue slowing, so you're going to have fewer new competitors next year to worry about," Gallagher told BI.

First, a tight housing market eroded investor appetite for new properties. Increasing regulations on Airbnbs and Vrbos in cities across the US and abroad over the past few years have also dampened new listings.

That's good news for hosts who already manage units.

"It's good for operators that are already in the market, because they've got barriers to entry that are already in place for anyone who wants to compete with them," Gallagher noted.

3. Large homes with relatively cheap nightly rates are likely to keep growing in popularity

One surprising trend from 2024 that Gallagher said is likely to continue into the new year is the exceptional performance of a certain segment of listings: multiple-bedroom homes that large groups can book cheaply.

AirDNA found that the largest growth in both demand and available listings in 2024 was for listings with six or more bedrooms in the "budget" category, or the cheapest 20% of listings ranked by price-per-night.

Gallagher explained that the uptick in interest might be a response to the comparisons some travelers make between hotels and short-term rentals.

"People are looking at the value proposition of renting six rooms at a budget hotel, compared to getting a six-bedroom short-term rental," Gallagher said. "It's been a change to the composition of short-term rental supply."

In recent years, some loyal Airbnb guests have claimed they are opting to stay in hotels more frequently due to issues like fees and chores.

Airbnb has intensified its competition with hotels in recent months, with one executive teasing that the company will soon start offering "hotel-like" amenities.

• I've learned to spot red flags while booking a lot of vacation rentals online during my travels.
• Diving deep into reviews provides the opportunity to learn from previous guests.
• I'm skeptical of listings with photos that use wide-angle lenses to make spaces look bigger.

I've been traveling full-time for the past two years.

In that time, I've stayed in more than 40 unique rental units for a total of more than 380 nights across 16 countries. (The other nights were spent on cruises, hotels, or at friends' houses.)

A never-ending vacation may sound relaxing but it means I'm always looking for my next accommodation and hoping it's good.

I've stayed in gorgeous farmhouse lofts, high-rise city apartments, and desert hideaways — but I've also booked a few duds along the way.

Here are five questions I use to spot red flags when booking lodging, no matter which website or app I use.

Do the photos reflect reality?

I love high-quality photos, but I try not to let them cloud my judgement. Great staging doesn't always equal a comfortable stay.

Plus, a good photographer can make a home seem more spacious than it really is, especially if they use the right lens.

When looking at listing photos, I analyze whether the furniture looks comically elongated, like a reflection from a funhouse mirror. It could be a sign the photo was taken with a wide-angle lens that's making the space look bigger.

I'm also apprehensive to book a place if I can't decipher its layout by looking at the photos.

How high is the overall rating?

I use overall ratings to quickly weed out rentals. In my experience, staying somewhere with less than four-and-a-half stars can be risky — especially if I'm booking a month-long stay.

If enough guests are providing ratings less than five stars, there's likely something amiss. (Airbnb can even remove hosts who have an average of less than four-and-a-half stars.)

Reviews can also yield other red flags. I find crowdsourced feedback sheds light on important items like cleanliness, rental location, and outside noise.

It can also be risky to book a place that doesn't have any reviews yet. Instead, I save unreviewed listings I like and check them until others have stayed and left feedback.

If you want to book a place with no reviews, I recommend at least looking into the host. Do they have other properties with tons of positive reviews? That might be a good sign.

Are all the reviews old?

It can be difficult to trust the accuracy of a rental listing if the latest review is over two years old.

After all, I've read horror stories about trusting travelers staying in rentals that they didn't realize had been vacant and uncared for for months.

If a nice-looking rental only has old reviews I'll sometimes just save it and check on it until someone writes about a more recent stay.

How has the host responded to feedback?

There is no greater red flag than when a host berates a previous guest for leaving feedback.

How an owner responds to reviews is one of the most important items I look for. If they disrespect or talk down to guests I'm staying clear of their property.

Are the listed amenities available?

I use search filters to find lodging with my desired amenities, but before booking, I perform a keyword search of the reviews for those specific features.

For houses with a jacuzzi or pool, I look to see if recent guests have mentioned any issues with it. There's nothing worse than showing up to swim, only to find out the pool has been drained for repairs.

For Wi-Fi, I check to see if anyone has complained about unreliable service. Whatever experience others have had, I might expect the same issues during my stay.

Additionally, I share in my introduction message to the host that I'm looking forward to the specific amenity. That way, they know I'm serious about that item and expect it to be available and in working order.