Good morning,

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

Airbnb plans to add hotels to its platform in a major expansion, the Ryder Cup was projected to deliver a $160M economic lift with STR demand up 278%, and Airbnb will hold its first national host summit amid rising tensions over recent platform changes.

This week in STR regulations: Dearborn Heights, MI, dropped a hammer with a citywide ban on rentals under 27 days and $5,000 daily fines, while Monterey County, CA, cemented coastal zone restrictions that tighten usage of vacation rentals in tourist-heavy areas.

Lets dive in. 

NEWS

Headline Roundup

• Airbnb to Expand Beyond Homes, Adds Hotel Listings to Platform (The Host Report)

• Ryder Cup Expected to Drive $160M Boost, With STR Demand Up 278% (AirDNA)

• Airbnb to Hold First-Ever National Host Summit Amid Policy Tensions (Travel Jiffy)

• Gen Z Leads European Travel Surge With Record Spending (MMGY Intel)

• Outdoor Lifestyle Brand Gravity Haus Expands to Montana With Big Sky Launch (Hotel Dive)

• RMS Integrates With ResDiary to Combine Room and Dining Reservations (The Host Report)

• Apaleo Becomes First PMS to Launch MCP Server, Connecting AI Agents to Property Management Software (Phocuswire)

• Bob W Serviced Apartments Continues Its Rapid European Expansion (RLI)

• Simply Owners Teams Up With AccessibleUK to Open 6,000 Holiday Rentals to Disabled Travelers (Travel Daily News)

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INSIGHTS

Why Top Airbnb Operators Are Moving Into Boutique Hotels

This week I read an AirDNA blog post warning STR operators about the dangers of getting into hotel investing. I'd like to take the opposite side of that argument. There's a reason why big hotel brands like Marriott are copying what Airbnb owners are doing, not the other way around.

The Skills Transfer Better Than You Think

The article warns that "STR investors often underestimate the operational complexity of hotels, including staffing, regulatory compliance, and the need for continuous capital reinvestment.” Here's what I think the article misses:

The top STR operators have already mastered the fundamentals that make a hotel successful:

• Guest experience design - Top STR hosts obsess over reviews, amenities, and the guest journey

• Dynamic pricing - Many STR operators are more sophisticated with revenue management than legacy hotel operators

• Digital marketing - STR hosts understand direct booking funnels, social media, and online reputation management

• Operational efficiency - Successful multi-property STR operators already manage cleaning teams, maintenance workflows, capex budgets, and software stacks

The truth is, many traditional hotels are worse at hospitality than top-tier Airbnb operators. They're stuck in outdated service models while STR hosts have been forced to innovate.

Regulatory Certainty Is a Huge Advantage

The article frames hotel regulations as a burden, alluding to STR operators "overlooking strict compliance obligations." But flip the script:

Airbnb regulations are increasing and volatile in just about every market. It's exhausting for STR operators to constantly navigate gray areas while fighting city councils and the NIMBY crowd. There are still plenty of good Airbnb markets, but the number is shrinking.

Boutique hotels aren't threatened by sudden STR bans or 30-day minimum requirements. Hotel zoning offers predictability that allows you to plan a 10-year strategy without wondering if your business model will be legal next year.

Income-Based Valuation Works In Your Favor

Yes, hotels are valued on NOI (Net Operating Income) - and that's exactly why smart operators love them.

Airbnb’s are valued on comps. Let's say you have an Airbnb that's absolutely crushing it, making 25%+ cash-on-cash returns. What happens when you go to sell? In most cases, that Airbnb property is valued based on what the house across the street sold for. Successful Airbnbs generate amazing cashflows, but your operational excellence doesn't always translate to a higher sale price.

Boutique hotels are different. They are valued based on the income approach. And there are more profit levers you can pull to increase NOI: weddings, corporate retreats, in-house restaurants and bars, co-working spaces, spa services, top-tier amenities, curated experiences.

If a smart operator adds $100K to a boutique hotel's NOI and the property later sells at an 8% cap rate, that operator added $1.25 million to the hotel's value. That's massive.

Why This Shift Is Happening Now

Look around and you'll see three major trends colliding that I believe are pushing STR operators into boutique hotels:

First, there's a massive supply opportunity. Baby boomers are estimated to own roughly 25% of hotels valued under $10M, and they're retiring. Many of these properties haven't been renovated in years - they're running on outdated tech, have no social media presence, and aren't using modern PMS or revenue management systems. That means big opportunities for operators who know how to run modern hospitality businesses.

Second, guest preferences have evolved. Millennials and Gen Z don't want to stay at your grandmother's Marriott or Hampton Inn, but they do want consistently reliable experiences. They're craving the authenticity that's been Airbnb's "secret sauce" - but without the wild inconsistency between a great host and a terrible one. A well-run boutique hotel can deliver both authenticity and consistency.

Third, STR regulations are tightening everywhere. Operators who want long-term stability are looking for alternatives. And In a market where Airbnb’s are illegal, boutique hotels are the next best thing to capture the majority of Millennials and Gen Z travel demand. 

Bottom Line

To be clear, this is not an article against Airbnb ownership. I 100% believe vacation rentals are one of the absolute best ways to build generational wealth, and I shout that from the rooftops every day. I’m just saying that top-tier Airbnb operators have an excellent foundation to make the leap into boutique hotels if that's what they want to do. 

The operators succeeding in this transition aren't treating boutique hotels like "30 Airbnbs under one roof," they're recognizing that their hard-won hospitality expertise, operational systems, and guest experience obsession can translate directly into boutique hotel success.

MARKET INSIGHTS

Mortgage Rate Snapshot

Mortgage rates stayed in a tight range this week, briefly ticking higher after strong economic data but settling back into the high-6.3% range by week’s end. With a potential government shutdown threatening to delay the jobs report, rates remain steady as markets wait for clearer signals.

Regulations Update

• Dearborn Heights, Michigan, enacted an immediate citywide ban on short-term rentals under 27 days with $5,000 daily fines for violations and $1,000 penalties for maintaining online listings

• Monterey County, California, finalized an ordinance creating three categories of short-term rentals with specific operational limits in coastal zone areas that will restrict property usage in high-tourism markets

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