The short-term rental (STR) industry has experienced transformative growth over the last decade, and 2025 is shaping up to be no different. As we approach a new year, hosts and property managers must stay ahead of trends to remain competitive in this ever-evolving landscape – and here are five key predictions that we expect to define the STR space in 2025:
1. A surge in direct bookings
This one is not going away – and was something Hostfully Co-Founder, David Jacoby, highlighted during a recent episode of the HCH Podcast. David was discussing Hostfully's latest vacation rental trends report, which showed that direct bookings increased to 20% as a reservation source in 2024.
The book direct movement is only growing, with hosts and guests savvy to the commissions levied by online travel agencies (OTAs) like Airbnb and Booking.com.
Direct bookings offer a win-win situation: guests enjoy better rates, while hosts retain more of their earnings. To capitalise on this trend, hosts will need to invest in:
A user-friendly, professional website.
Targeted digital marketing campaigns.
Loyalty programmes and exclusive perks for repeat guests.
By prioritising direct bookings, hosts can build stronger, long-term relationships with their guests while maximising profitability.
2. AI-powered operations
Artificial intelligence (AI) is nothing new – in fact it has been around since the 1950s. However, in the last few years it has moved very much into the mainstream, thanks to platforms like ChatGPT (side note: if you're not using ChatGPT to help generate ideas and content, what are you waiting for?).
AI is set to revolutionise the STR sector in 2025 and beyond. From guest screening to dynamic pricing and personalised communication (give Smart Pineapple a try in this area), AI tools will help hosts and property managers save time and increase efficiency.
Key AI applications in the STR world include:
Dynamic pricing tools like Beyond: Adjust rates based on demand, competition, and local events.
Guest screening: Automatically identify ideal guests while minimising risks.
Automated communication from your PMS, such as Hostfully, Hospitable, or Hosthub: Deliver seamless, 24/7 responses to guest inquiries.
Personalised recommendations: Tailor guest experiences with suggestions based on their preferences.
Hosts who embrace AI will gain a competitive edge, delivering exceptional experiences while streamlining their operations.
3. The rise of sustainable rentals
Sustainability is always a trend, right? Well, yeah, but it really is no longer optional in the travel sector. In 2025, eco-conscious travellers will increasingly seek properties that demonstrate a commitment to environmental responsibility.
Hosts can attract these guests by implementing green initiatives such as:
Installing an EV charger – check out VoltShare, which is offering £50 off the cost of installation, plus a free aluminium sign for HCH readers.
Installing energy-efficient appliances.
Using renewable energy sources like solar power.
Offering recycling and composting facilities.
Using eco-friendly cleaning products.
Offsetting carbon emissions from guest stays.
By adopting sustainable practices, hosts can meet guest expectations, reduce operational costs, and differentiate their properties in a crowded market.
4. The growth of “bleisure” travel
Good news: digital nomads now have their own travel category – 'bleisure'! Awful word, isn't it?
Anyway, it's going to be a continuing trend in 2025. Remote work is the norm, offices are closing every day, and travellers are no longer tied to one location. Furthermore, people are tending to extend business trips in order to enjoy working in vacation destinations.
If your property is suitable, you must cater for the bleisure travellers:
Provide high-speed Wi-Fi and ergonomic workspaces.
Offer amenities like coffee machines, printers, and noise-canceling headphones.
Highlight nearby co-working spaces, gyms, and leisure activities.
Create packages for longer stays with discounted rates.
By accommodating bleisure travellers, hosts can boost occupancy rates and secure more extended bookings.
5. Navigating stricter regulations
It probably should be number one on the list – but we don't want to depress everyone in the lead-up to Christmas.
The R word is not going away. Regulations are tightening worldwide. Think 90-day caps, more tax, licensing, and more stringent health and safety standards.
Regularly review and comply with local regulations.
Maintain accurate documentation and reports.
Team up with local hosts and property managers to share knowledge and lobby local lawmakers.
Use professional property management services to ensure compliance.
And, perhaps most importantly, join an association like PASC UK (England and Wales), UK STAA (UK-wide), and the ASSC (Scotland).
And finally...
To stay ahead of the curve, keep engaging with Holiday Cottage Handbook. We will continue sharing the latest news and insights from our sector – helping you to stay ahead of the pack.
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