Good morning,

Here’s what’s going on in the vacation rental world this week:

A Hostaway survey finds only 20% of STR operators use AI agents, AirDNA’s September US market review shows RevPAR up 15.3% (with a little help from Labor Day), and we break down the 5 trends that will separate the winners and losers in vacation rentals.

Lets dive in. 

NEWS

Headline Roundup

• Hostaway survey finds only 20% of STR operators use AI agents (The Host Report)

• Airbnb adds rain insurance (The Host Report)

• AirDNA’s September 2026 US market review (AirDNA)

• Airbnb contributes $105K to Massachusetts’ Legalize Starter Homes campaign (Airbnb Newsroom)

• Airbnb accused of ‘aggressive’ campaign over BNB trademark (Bloomberg Law)

• Simpson Travel acquires South France Villas (Travel Daily Media)

For the host who dreads writing the monthly guest email

INTERESTING INSIGHTS

5 Forces Shaping the Future of Vacation Rentals

For years, the STR industry had one big thing going for it: growth.

More travelers were booking vacation rentals, more new properties were entering the market, and property managers could grow simply by riding that wave.

But that's changing.

This week I listened to a presentation by Jamie Lane, Chief Economist at AirDNA. He broke down the five major forces he believes will shape our industry over the next several years.

Some are threats, Others are opportunities.

Here's what stood out to me, and what it could mean for you.

1. Economic Volatility

Jamie argues that two factors matter most for travel demand: #1 whether people have jobs and #2 whether their incomes are growing.

When people make more money, they tend to spend more on travel.

Simple enough.

But inflation, rising consumer debt, and shrinking savings are all warning signs that travel spending could slow down.

He also pointed out an interesting trend: More Americans are taking trips to Europe, while fewer international travelers are coming to the U.S. 

That's bad news for markets like Orlando, Miami, NYC, Vegas, and Hawaii, where international travelers make up a big share of visitors.

2. The Growing Power of OTAs

For all the talk about direct bookings, the OTAs (Airbnb, Vrbo, and Booking) are actually gaining market share.

These companies spend billions on marketing to attract travelers. And it's working.

But Jamie made an interesting point about why this is actually good news for hosts, even if you’d rather get direct bookings. 

The OTAs are spending billions to introduce people to vacation rentals for the very first time.

Once someone stays in their first vacation rental, they're more likely to book another one.

And that next booking might even be direct.

Another positive trend is that hosts are becoming less dependent on a single OTA platform as more operators list their properties across multiple booking channels.

And as I wrote about recently, AI agents could eventually disrupt the entire OTA model by searching across platforms and direct-booking websites.

3. The Sorting

This was the most interesting part of Jamie's presentation.

He calls it "the sorting," and the idea is simple: The gap between great property managers and average ones is getting bigger. Here's why:

Back when the number of new vacation rentals were growing by more than 20% annually, property managers could grow their business simply by signing newly purchased vacation rentals.

But today, supply growth is only around 1.6%.

That makes it a completely different game.

Now, if a property manager wants to add 50 properties this year, they need to convince 50 existing homeowners to fire their current managers and hire them instead.

And how do you do that? Typically by proving you can deliver better results.  

AirDNA's data shows just how much better performance matters.

And consider these findings:

So better reviews don't just help properties make more money. They also make it easier to keep homeowners from leaving.

That's the sorting. The best operators are pulling ahead, while everyone else is fighting to keep up.

4. The Housing Market

Jamie said only ~4 million homes are expected to sell this year.

That's roughly the same level we saw during the depths of the 2008 financial crisis.

With rates above 7%, buying a vacation rental is a much tougher investment to justify. And Jamie doesn't expect rates to fall below 6% anytime soon.

But here's the flip side:

Home values have also declined in several major vacation rental markets, including Gatlinburg, Sarasota, Cape Coral, Panama City, and Austin.

For investors who can make the numbers work, lower prices could create some attractive buying opportunities. And for existing hosts, fewer new properties entering the market also means fewer new competitors.

5. AI

Jamie had an interesting take on AI that had almost nothing to do with automated guest messages or listing descriptions.

What if AI actually makes people travel more?

Here's the thinking… Historically, travel has grown as people became more productive, earned higher incomes, and gained more free time.

Jamie believes AI could accelerate that trend.

AirDNA's modeling suggests that if AI delivers major productivity gains and economic growth, STR demand could increase substantially by 2030.

Of course, the opposite could happen if AI eliminates jobs without creating widespread economic benefits people could end up with less money to travel.

Nobody knows exactly how this plays out.

The Easy Growth Era Is Over

My biggest takeaway from Jamie's presentation is that the next phase of the vacation rental industry will reward better operators, not necessarily bigger ones.

For years, a rising tide lifted almost everyone.

But as supply growth slows, the property managers that deliver better guest experiences, generate stronger returns, and keep homeowners happy will have the advantage.

MARKET INSIGHTS

Mortgage Rate Snapshot

Mortgage rates fell to a two-week low, led by Thursday’s biggest one-day drop in three months. Investors stepped back into bonds after deciding yields were finally high enough to be worth buying, giving mortgage rates their strongest pullback since late August.

Regulations Update

• Santa Barbara, California unanimously approved rules banning STRs from inland residential zones starting January 2027, with a one-STR-per-owner limit and a two-night minimum

• Hillsborough County, Florida begins annual STR registration January 1 with a $200 fee and a required one-hour response to problems

• Idaho’s House Bill 583 wiped out Sandpoint’s cap of about 35 neighborhood STRs, leaving the city with no STR rules at all

• Dunes City, Oregon votes November 3 on a measure that would ban new STRs and require on-site hosts for existing ones

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