Short-term rental market is facing a significant decline in demand.

Beth Davis

All County Editor

The Rise and Fall of Short-Term Rental DemandFrom Pandemic Boost to Post Covid Cooldown

When COVID-19 brought global travel to a standstill, few could have predicted that short-term rentals would experience one of their strongest surges in demand. As hotels shut down or operated under strict capacity limits, travelers and remote workers turned to platforms like Airbnb and Vrbo for safer, more flexible accommodations.

But fast forward to today — the boom is cooling. The once red-hot short-term rental market is facing a significant decline in demand, forcing many property owners and investors to rethink their strategies.

The Pandemic Boom: Why Demand Skyrocketed

1. Remote Work Revolution
   With millions working remotely, people no longer had to stay close to the office. This led to a surge in “work-from-anywhere” bookings, with families and professionals renting entire homes in rural or resort communities for weeks or months at a time. Learn more about how remote work reshaped travel.

2. Desire for Safety and Space
   Traditional hotels often meant shared spaces, crowded lobbies, and limited privacy. Short-term rentals, especially single-family homes, offered the opposite — private, isolated accommodations that felt safer during uncertain times.

3. Shift Toward Domestic Travel
   With international travel restricted, many Americans explored destinations closer to home. According to the U.S. Travel Association, domestic leisure travel surged to record levels, driving nightly rates and occupancy higher than ever before. Learn more about these travel trends.

4. Investment Frenzy
   Investors quickly noticed the trend. Thousands of new listings hit the market, creating an oversupply of short-term rentals as everyone raced to capitalize on the boom. AirDNA reported a dramatic increase in active listings between 2020 and 2022. Learn more about STR market data.

The Post-COVID Shift: Demand Cools Off

As the world opened back up, consumer behavior shifted again, and what once fueled the short-term rental surge has now reversed.

1. Return to Offices and Routines
   Many companies are pulling employees back to in-person or hybrid schedules. With less flexibility to travel, mid-term and long-term stays have declined, cutting into a large portion of pandemic-era demand.

2. Hotel Comeback
   Hotels have adapted with flexible check-ins, improved cleanliness standards, and competitive pricing. Many travelers who tried vacation rentals during COVID are now returning to hotels for consistency and amenities.

3. Economic Pressure
   Rising inflation and interest rates have affected discretionary spending. Fewer people are taking spontaneous trips, and travelers are becoming more price-sensitive. Forbes Real Estate and Bloomberg have both reported on declining occupancy rates in major markets.

4. Oversupply Meets Lower Demand
   The pandemic investment rush created a glut of short-term rental inventory. Now, with lower occupancy rates and stiffer competition, many hosts are lowering nightly rates or exiting the market entirely.

Regulations Tighten the Market

Adding to the pressure, cities across the U.S. have tightened regulations on short-term rentals. From New York City to Dallas to beach towns across Florida, new licensing requirements, minimum stay rules, and zoning restrictions are making it harder — and more expensive — to operate STR properties profitably.

Resources like the National League of Cities and Airbnb’s Responsible Hosting Hub help owners stay informed about changing rules. Learn more about local

.

What This Means for Owners and Investors

• Reassess your strategy: With reduced demand, some owners are pivoting to long-term or mid-term rentals to stabilize cash flow.

• Focus on quality, not quantity: Standing out now requires more than just a good location — amenities, professional photos, and great guest experiences matter more than ever.

• Stay ahead of regulations: Understanding and complying with local laws can make or break your STR business.

• Diversify revenue streams: Many operators are exploring mixed-use strategies — for example, renting to traveling nurses, digital nomads, or corporate relocations.

Looking Ahead

The short-term rental market isn’t disappearing — it’s evolving. The pandemic created an unsustainable surge, and the current slowdown is part of a natural market correction. Demand remains healthy in top destinations, but operators must be smarter, more strategic, and more adaptable than during the boom years.

Those who treat short-term rentals like a business — not just a side hustle — will be best positioned to thrive in this new landscape.

How All County® Can Help You Bring In More Income

If you’re a property owner feeling the impact of declining short-term rental demand, shifting to a long-term rental strategy may offer greater stability and higher rewards. At All County® Property Management, we specialize in maximizing rental income through professional property management — from marketing and tenant placement to rent collection, maintenance, and compliance.

Our experienced team can help you:

• Seamlessly convert your property from short-term to long-term rental.

• Attract and retain high-quality tenants.

• Ensure steady monthly cash flow and reduced vacancy rates.

• Stay compliant with all local, state, and federal housing regulations.

This market correction doesn’t have to be a setback — it can be an opportunity to build a stronger, more profitable investment portfolio.

👉 Learn more about All County® or find your local office to discover how we can help turn your property into a long-term income powerhouse.