STRs (short-term rentals) had a strong second quarter in 2025, outperforming hotels across every U.S. region, according to new data from Key Data, which tracked more than 13 million listings nationwide. Vacation rentals posted a nine-point lead in RevPAR (revenue per available rental) over hotels, underscoring their lasting investment appeal even as the broader travel sector faced economic headwinds.
Melanie Brown, VP of Data Insights at Key Data, said: “Despite macroeconomic pressure, demand held strong.” If you’re an investor, this gap between vacation rentals and hotels is worth paying attention to.
The sector’s headline numbers are impressive, but the market isn’t moving in unison. Some cities are seeing explosive demand, while others are plateauing, and the difference often comes down to location, property type, and business strategy.
What This Means for STR Investors
If you own or are considering buying a short-term rental, this shift in traveller behaviour works in your favour. When more people choose vacation rentals over hotels, platforms like Airbnb capture more market share. For you, that can mean better occupancy, stronger nightly rates, and more resilience when the hotel market softens.
The demand isn’t just for “any” rental; travellers are increasingly paying a premium for space, privacy, and a sense of place that hotels can’t offer. Distinctive homes in sought-after areas are the ones pulling ahead.
Then there’s the matter of price point. In many U.S. states, entry prices for STR-friendly properties remain lower than you might expect, which means your capital goes further, especially if you buy in a city with solid tourism and a year-round draw.
The Best U.S. Cities for Airbnb-Style Properties
A study by Airbtics revealed the U.S. markets currently offering some of the best investment potential for vacation rentals.
Los Angeles, New York, and San Diego secured podium places, thanks to their high occupancy, average daily rates, and annual revenues; however, the report also notes that all three markets present strict regulations for STR owners.
Florida dominated the best places to buy an Airbnb, with Jacksonville and Miami ranking in the top 10, and Sarasota, Fort Lauderdale, Miami Beach and Cape Coral placing highly.
With 9,101 active listings and an average daily rate of $195, Nashville, Tennessee, was also named one of the most attractive STR markets. The city boasts a robust tourism industry, driven by a legendary music scene and growing sports tourism.
Let’s take a closer look at some of these locations and their investment appeal.
Jacksonville, FL
Jacksonville is a growing city with a steady tourism flow and relatively affordable buy-in compared to its coastal peers, making it an appealing entry point for investors looking to buy and list STRs. In terms of tourism, it attracts both business and leisure travellers with its historic neighbourhoods, cultural attractions, urban beaches, and eco-tourism.
Miami, FL
Miami is a global gateway; its airport offers connections to 150 destinations worldwide, generating $32 billion annually. Florida draws 45% of all international visitors to the U.S., with a huge 1,641 visitors for every 100 residents. Airbtics data points to forecasted revenues above $45,000 a year and occupancy rates north of 65% in Miami.
Nashville, TN
Nashville’s music scene, cultural events, and fast-growing economy make it a magnet for both leisure and business travel. TripAdvisor recently ranked it among the Top 10 U.S. Cities for Leisure, and Clever named it the #1 Music City in the country. With 660 daily flights to 114 nonstop destinations, the city’s international airport keeps visitor numbers high, while major sports events at GEODIS Park broaden the city’s appeal beyond music tourism.
Sarasota, FL
With a 68% occupancy rate and an average daily rate of $212, owners of vacation rentals can reap robust investment returns in Sarasota. The region’s iconic attractions—like Siesta Key Beach, cultural venues, and golf courses—draw both domestic and international tourists. Add to that Sarasota’s limited hotel inventory compared to cities like Miami or Orlando, and Airbnb fills a vital niche.
Fort Lauderdale, FL
This Florida city remains a strong STR performer, combining tourism appeal with healthy booking rates. Just 25 miles north of Miami, Fort Lauderdale offers a more affordable alternative with easier beach access and a calmer environment. Known for its waterways and scenic beaches, the city attracts diverse visitors ranging from families and boating enthusiasts to business visitors. It’s a family-friendly city, with plenty of attractions, events, and festivals supporting year-round tourism.
Miami Beach, FL
Miami Beach delivers high average daily rates, respectable occupancy, and solid annual yields, though a degree of seasonality remains. Short-term rentals are often in designated hotels and resorts due to strict zoning and licensing requirements, meaning Airbnb opportunities are relatively rare but can be very lucrative.
Cape Coral, FL
The Airbnb market in Cape Coral is experiencing substantial growth, with bookings and ADRs rising year-over-year. Known as the “Venice of America”, it has more canals than any city globally, as well as an array of outdoor and nature attractions. This makes Cape Coral a hotspot for family holidays and weekend getaways, drawing visitors from across the U.S. and beyond.
Opportunities in Two U.S. Markets Worth a Closer Look
The Modernist — Nashville
Minutes from Downtown Nashville, in the up-and-coming Wedgewood-Houston neighbourhood, The Modernist offers studios to three-bedroom condos in a short-term-rental-approved building. It’s designed to pull in high-yield guests and long-term tenants alike, with amenities like a rooftop deck, fitness centre, outdoor pool, sauna, and co-working spaces. Prices start at $261,900, with freehold tenure and an estimated 10% rental yield. Completion is set for Q1 2027. Given WeHo’s early-stage regeneration, there’s strong potential for capital growth alongside rental income.
7200 Collins — Miami
This 12-storey luxury development in Miami Beach’s revitalised North Beach offers fully furnished studios, one- and two-bedroom units with Airbnb approval. Many residences offer ocean views and private terraces, and the building boasts a range of resort-style amenities, including a beach club, landscaped gardens, and a yoga terrace. Prices start at $545,000, with freehold tenure and an estimated 9% rental yield. Completion is expected in Q4 2027.
Natiivo — Fort Lauderdale
This project in Fort Lauderdale offers 384 luxury units across 40 stories, ranging from studios to three-bedroom units. Due to be completed in Q2 2027, the development is the city’s first resort condominium property intentionally designed for vacation rentals, with a dedicated rental management team on hand to help provide a hands-off, hassle-free investment. Residents and guests can enjoy hotel-like amenities, including a pool, outdoor bar and kitchen, sundeck, co-working space, gym, spa, restaurant, entertainment lounge and 24-hour welcome desk. Owners have the flexibility to list their units on any rental platform, including Airbnb, Vrbo, Booking.com and more.
Short-term rentals are pulling way ahead of hotels. For investors, this is a signal to closely examine where demand is strongest and what type of property will stand out in a crowded market. With cities like Miami, Nashville, and Jacksonville posting strong returns and new developments catering to STR investors, the opportunity is there for those ready to move.
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