This Week’s News & Insights

What ultra successful STR’s will look like in the future + The latest Vacation Rental industry news

Good morning,

Here’s what’s going on in the short-term rental world this week:

Airbnb launches “Reserve Now, Pay Later” across the U.S., the White House names an Airbnb co-founder as America’s first Chief Design Officer, and a host discovers a $1,300 electricity bill after guests secretly ran a crypto mining operation.

This week in the markets: Mortgage rates dipped to their lowest level of 2025 on hopes of Fed rate cuts, and on the regulatory side, California delivered a wave of restrictions: Big Sur and Carmel Highlands saw outright bans, Santa Cruz cut off multi-property growth, and National City layered in caps, taxes, and background checks.

Lets dive in. 

NEWS

Headline Roundup

  • Guests Can Now Book Without Paying Upfront as Airbnb Rolls Out ‘Reserve Now, Pay Later’ Across U.S. (The Host Report)

  • Trump Appoints Airbnb Co-Founder as First U.S. Chief Design Officer (The Hill)

  • $1300 Electricity Bill Uncovers Crypto Mining Operation in an Airbnb (3DVF)

  • Airbnb Adds Safety Feature to Waterfront Listings and Homes with Pools (KPAX)

  • Lawyer: STR Bans Violate Constitutional Property Rights (Mondaq)

  • Hospitable Sees 45% Jump in AI for Guest Messaging (The Host Report)

  • Oxford Economics: Airbnb Drove $20.3B to Australia’s Economy (Airbnb News)

  • Gathern Raises $72M Series B to Expand STR Network (Lucidity Insights)

Custom Maps: The Easiest Way to Boost Your Bookings

Things you can do to improve your listing:

  • Remodel the house - $30k

  • Hire a designer - $10k

  • Join a Mastermind - $1k

  • Fresh Paint - $500

  • New photos - $300

  • Custom map - $29

Create yours in less than 5 mins: app.thehostreport.com

INTERESTING INSIGHTS

What Ultra Successful STR’s Will Look Like in the future

I’ve been thinking a lot about where short-term rentals are headed.

Airbnb’s about 16 years old now. Here's how I break down its evolution, and what I believe is coming next:

STR 1.0 (2009–2018): The Gold Rush Era

Airbnb made vacation rentals mainstream. This created so much new demand, but supply lagged.

  • Even low-quality listings turned a huge profit.

  • Good listings made a killing.

  • The guest experience was wildly inconsistent - great one trip, awful the next.

STR 2.0 (2018–Now): The Market Matures

Three major shifts reshaped the landscape:

  1. Explosion of Supply
    The general public realized that listing on Airbnb could be a huge money-maker. Homeowners jumped in. Entrepreneurs raised $ to buy Airbnbs, or launched “Airbnb arbitrage” operations. The number of Airbnbs ballooned.

  2. Professionalization of Hosts
    Many hardworking professionals left 9–5 jobs to manage STRs full-time. Gurus and online courses standardized “what works,” which raised the operational bar across the board. Becoming a top 10% listing now requires serious strategy.

  3. Airbnb Becomes the Dominant Platform
    Airbnb began flexing its power: Low-quality listings were removed, and platform consistency improved. But as a public company, Airbnb shifted toward guest-centric policies to drive bookings and revenue often at the expense of hosts. Additionally, Airbnb has become so popular that cities began crafting regulations specifically against Airbnbs.

The Result:
Profit Margins compressed. Listing quality has improved across the board. The environment is tougher than ever and regulations are a major risk. Gone are the gold rush days, it’s harder than ever to stand out.

STR 3.0 (2025+): Experience and Community

The next wave of breakout listings will share two traits:

  1. Niche Experiences
    Ultra successful Airbnbs will be Experienced based and Community based. Properties will be tailored to specific groups that want a specific experience (ex: guys on a golf trip). The property will cultivate such an amazing experience that it creates raving fans who can't wait to tell their friends about it. These aren’t just nice places to sleep, now the property is the destination.

  2. Direct Marketing & Direct Booking
    These hosts will ditch dependency on Airbnb. Instead, they’ll run niche-targeted ads, drive traffic to their direct booking sites, and build email lists for re-engagement. Platform fees go down, while control, profit margins and occupancy rates go up.

Key Insight:
Unique experiences give hosts pricing power. They let you escape the race-to-the-bottom dynamics of crowded Airbnb search results.

Case Study: Birdie Houses

Here’s a perfect example of what STR 3.0 looks like in action.

Brand: Birdie Houses
Target Audience: Golf trips
Locations: Myrtle Beach, Pinehurst, and Scottsdale: three of the most popular golf destinations in the USA.

What Makes It Work:

  • Experience-first amenities: On-site golf simulators, putting greens, short game practice areas, an outdoor bar, barrel sauna, and golf-themed decor throughout.

  • Direct booking machine: 94% of reservations come direct, driven by 110K+ Instagram followers and a great content strategy.

  • Clear niche positioning: Every detail, from marketing language to design choices, speaks specifically to golfers. (When booking, they don’t ask for the number of “guests” - they ask for the number of “golfers.” That’s the level of specificity I’m talking about.)

Check out the results:

  • That calendar shows 77% occupancy at $1,000+ ADR - before the month even starts. Odds are strong they'll land another last-minute booking and push the occupancy rate number even higher.

  • And October’s already 61% booked at $1,500+ ADR.

  • Plus their Concierge Services are likely adding tons of $$$ in upsells.

This is what happens when you go all-in on a niche, build an unforgettable experience, and take control of your marketing. Perfect execution Birdie Houses.

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MARKET INSIGHTS

Mortgage Rate Snapshot

Mortgage rates ticked up through midweek, then dropped sharply after Powell’s Jackson Hole speech hinted at possible rate cuts, pushing rates to their lowest level of 2025. After a minor rebound on Monday, rates settled back near those lows on Tuesday as markets turned their focus to next week’s jobs report.

Regulations Update

  • Monterey County's California Coastal Commission approval completely bans commercial vacation rentals in Big Sur and Carmel Highlands while capping all other STRs at just 4% of single-family housing stock

  • National City, California introduces criminal background checks for STR operators, caps the entire city at 180 rentals, and imposes a 10% Transient Occupancy Tax on top of $250 annual permits

  • Santa Cruz County locks in a 270-permit ceiling for non-hosted rentals with strict one-permit-per-person limits, effectively ending multi-property expansion opportunities

  • New York City's proposed Intro 1107 could allow single and two-family home owners to rent to up to four adults plus children without being present, potentially loosening the city's restrictive STR rules

See this weeks full regulations report here: (The Host Report)