Global insights, local impact: STR predictions for 2025 with SCALE
The short-term rental (STR) sector underwent dramatic changes in 2024. Tightened regulations, AI breakthroughs, and shifting guest expectations reshaped the industry. These forces are only intensifying, setting the stage for a pivotal year ahead.
For property managers and hosts, navigating this evolving landscape means staying ahead of the curve. The coming year promises both challenges and opportunities, demanding agility and innovation to remain competitive.
Drawing on insights from global industry pacesetters, our final article of 2024 highlights the trends and opportunities expected to shape STR in 2025.
Key Global Trends
The rise of guest retention and loyalty
According to Boris Pavlov of Flataway and SCALE Eastern Europe guest retention is set to take centre stage in 2025, with the #bookdirect movement gaining momentum.
He believes startups who are introducing fresh approaches to guest retention, loyalty and referral programs are shaking up traditional booking channels: “This reflects a growing need for direct relationships with guests, which will only become more critical as the market evolves.”
AI and automation transforming operations
Simon Lehmann of AJL Atelier and Lauren Clarke of NOX Cape Town both highlight the growing influence of AI and automation. Technologies which not only enhance guest experiences but also streamline operations for property managers.
Simon firmly believes that in 2025 AI and automation will continue to reshape the short-term rental industry, enhancing guest experiences and streamlining operations for property managers. He predicts that businesses must adapt strategically to remain competitive amid increasing regulation and market consolidation.
Lauren agrees that we need to keep an eye on AI moving into 2025: “Something to keep an eye on and the big buzzword, is AI. We actively use it in quite a few departments and functions at Nox and we’re hoping as it grows and develops it will only enhance our guests and staffs experience.”
Experiential and meaningful travel
Ruth Whitehead, COO of eviivo foresees a shift toward more meaningful and experiential travel. She envisions independent rentals offering authentic and personalised stays that create lasting memories.
“Travel in 2025 will be all about more meaningful moments. People don’t just look for a place to lay their head these days, they crave the experience of an authentic stay – one that resonates on a deeper level. Independent accommodation and short-term rentals are perfectly aligned to deliver on this, providing an antidote to cookie-cutter travel. Whether it’s a quirky apartment in a neighborhood off the beaten track, or a boutique villa steeped in local heritage, these stays create the kind of memories that last a lifetime.”
Ruth suggest that it’s technology that is facilitating this sea of change. “Guests will continue to demand a smoother, and more intuitive experience – think contactless check-ins, personalised offers and payment systems that just work. At the same time, AI is evolving into the ultimate travel companion. It’s no longer just informing travelers about their destinations; it’s narrating their journey and aligning it with their values, whether through eco-friendly options or uncovering hidden gems off the beaten path.
And Lauren Clarke of NOX Cape Town agrees, emphasising the growth of experiential travel and the importance of offering unique, locally inspired stays. She also advocates for better pre-arrival guest engagement through tailored itineraries and storytelling-driven marketing.
Sustainability and the “Green Pound”
Bob Garner of EnviroRental and Lisa Roads, The Holiday Property Coach, both predict a continued emphasis on sustainability.
Sustainable advocate, Bob Garner believes eco-friendly practices will differentiate businesses and resonate with environmentally conscious travellers.
And Lisa Roads echoes this sentiment, adding: “sustainability must be integrated into an agile business model supported by a robust tech stack.”
And Ruth of eviivo also believes that our perception on the impact of travel and how we can reduce our travel footprint is changing: “Another shift we’re seeing unfold is in how people view the impact of their travels. They’re moving away from the crowds, choosing quieter, more thoughtful retreats that align with a growing sense of responsibility toward the planet and local communities. Independent rentals that highlight sustainability, support local businesses and embrace off-peak tourism will be best placed to capture this growing demand.
Late booking trends
Sally Henry from Key Data suggests the late booking trend across Europe that operators have experienced in 2024 will continue into 2025, with significant revenue impact. “In 2024, 40% of bookings in the UK occurred within 14 days of the stay, often at lower rates. This trend is expected to persist in 2025, driven by economic pressures and cost-conscious travellers.”
How can we adapt to regulatory challenges 2025?
Tightening regulations will continue to impact the short-term rental industry in 2025.
Enrique Alcantara of Stay U-nique and president of Spanish association Apartur highlights increasing regulatory pressures in Spain as governments address housing shortages. This reflects a broader trend seen across Europe and other regions globally, where governments are implementing tighter regulations to balance housing availability with STR activities.
Simon Lehmann of AJL Atelier points to the global nature of regulation and market consolidation challenge for short-term rentals operators, urging businesses to adapt strategically to stay competitive.
Jessica Gillingham of Abode Worldwide notes that these pressures could foster innovation and the exploration of alternative revenue sources: “2025 will be the year of the great convergence: the lines between hospitality and living will continue to merge and more and more businesses will begin to look sideways for growth into other sectors.
As regulations tighten in many destinations around the world, short-term rental operators would be wise to explore other revenue sources, from simple upselling to alternative use cases. Consider how you can reach your guests in other areas of their lives and become their go-to brand for work, play, and home.”
Regional perspectives
Australasia
Rebecca Cribbin of Holiday Rental Experts expresses optimism for the region although regulatory challenges are expected: “I am excited for 2025 and the STR industry in Australasia. Whilst we are feeling pain around regulation, like the rest of the world, I am confident for the future.
As an industry we are seeing leaps forward in the quality of product, we are focused on creating incredible experiences for guests and property investors are seeing all the benefits around short- and medium-term rentals. As the take up of dynamic pricing increases both guests and owners will benefit.
For Property Managers like me, I am also positive that if we maintain consistency in our offering and we concentrate on excellence in servicing both our sets of clients we will continue to thrive. I think 2025 will be a similar year to 2024 from an industry wide perspective and I look forward to 2025 – my 15th year in this fabulous and crazy world of STR.”
Asia Pacific
Keith Cowarn of STRA – Short-term Rentals Asia highlights the immense growth potential of the region, echoing sentiments from Brian Chesky of Airbnb.
“I think Asia Pacific probably has the greatest growth potential of any region in the world.” Cowarn notes that Asia’s diversity, thriving tourism industry, and growing digital adoption position the region as a cornerstone of the travel ecosystem. Looking toward 2025, the STR market in Asia presents unparalleled opportunities for innovation and expansion.
South Africa
Nick Taylor from NOX Cape Town says Cape Town is going to be a trending destination for 2025. Cape Town International Airport is already receiving a record-breaking number of weekly flights, couple that with popularity of Cape Town as a cruise stop-off destination, it looks like Cape Town property managers will be busy busy!
However, according to an article by Conde Nast Traveller, short-term rental operators will have to contend with an influx of hotel brands arriving in the ‘Mother City’, increasing the need to deliver on brand and guest experience if they want to win the lion’s share of bookings.
2025: A year brimming with opportunity?
Hyper-localised, hyper-personalised
We talked about hyper-personalisation as a marketing trend in our last article and Richard Vaughton of YES Consulting mirrors the suggestion that when it comes to the guest experience, hyper-personalisation is going to help counteract the OTAs push to capture a greater slice of traveller’s spend.
“As we approach 2025, much of the conversation in the short-term rental space has revolved around AI, data, and legislation—undeniably critical themes shaping the future. Yet, there’s been comparatively little discussion about shifting travel dynamics and the implications for professional property managers.
One of the clearest trends emerging is the aggressive push by OTAs to capture a greater share of travellers’ spend. This includes not just accommodation but also activities, experiences, and services. At the same time, global economic pressures and rising costs are squeezing margins, leaving property managers to face mounting challenges.
These challenges do come with opportunities however. Leveraging local experiences, in-house offerings, and concierge services can not only differentiate a business but also drive incremental revenue streams. This shift isn’t merely about operational adjustments—it’s about creating a branded travel ecosystem that generates higher margins while enhancing the guest experience.
This mirrors a playbook long championed (unsuccessfully) by Airbnb and is further reinforced by initiatives like Expedia’s loyalty schemes and bundling strategies.
Also mentioned by Boris Pavlov in terms of approving better guest retention, Richard suggests: “These approaches aren’t just about short-term wins; they pave the way for better book-direct opportunities, stronger brand development, and lasting guest loyalty. Its also a hyper local opportunity, not something OTAs are good at!”
This approach has been mooted for years, but now we are seeing loyalty schemes, tech enabled experiences and guest comms channels enabling hyper local experiences. Prioritising guest experience, local partnerships, and streamlined revenue-generating services can add to that all important margin and improve local relationships!
Professional managers must adapt or stagnate. The focus should be on maximizing profitability and scalability without being consumed by overheads (where AI comes in) and this is a true opportunity!”
Watch out for our new column, Richard’s POV launching in the New Year.
Redefining Professionalism
CEO and founder of Hospitable, Pierre-Camille Hamana predicts a shift in how self-managers and independent hosts are perceived.
“For too long, the narrative has unfairly suggested that self-managers and independent hosts are less ‘professional’ than established property management companies. However, this perception is finally changing, driven by three key factors:
Airbnb’s strong backing of independent hosts, travellers’ growing desire for authentic and personalised experiences, and the democratisation of technology.
For years, independent hosts have been the underdogs, battling hefty software costs, minimum property thresholds, and overly complex systems that stifled their ability to scale.
Now, with accessible, professional-grade tools once reserved for larger operations, these hosts are emerging as a formidable threat to conventional property management companies.
As technology levels the playing field, independent hosts can operate with the same professionalism as large firms while maintaining their distinctive local character.
Coupled with travellers’ shifting preferences towards more authentic stays, it’s likely that more guests will prioritise localised accommodations over big branded companies. This could drive a movement away from branded property management firms towards smaller, more personable hosts and pave the way for a more diverse STR market.”
Building Strong Brands
Both Lisa Roads and Nick Taylor of NOX Cape Town and SCALE South Africa organiser underscore the importance and opportunity in building trusted brands.
Nick suggests that consistency in brand and service delivery will be paramount for property managers in 2025. “Guests are tired of ill-equipped Airbnbs. There will be a shift towards trusted property management companies offering reliable service, consistent quality, and guest guarantees.
Professional managers have an opportunity to address the fear of the unknown and build trust by ensuring guests know exactly what to expect.”
Lisa believes that online STR booking space continues to be congested with STR operators who don’t stand out. “Standing out with a strong trusted brand, being known for curating an exceptional personal niche market stay experience is going to be critical for that specific customer to find you and want to do business with you in 2025.”
Final Thoughts from the SCALE Team
As we look toward 2025, it’s clear that the STR industry is entering a transformative phase. From the integration of AI and sustainability to the convergence of hospitality and living, the opportunities for growth are immense.
Yet, these opportunities come with challenges—tightening regulations, economic pressures, and evolving guest expectations.
The SCALE team remains committed to supporting the global STR community through insights in the SCALE Community, events, and collaborations that empower operators to adapt and thrive in this dynamic landscape.
We look forward to engaging with you at our events worldwide as we collectively shape the future of short-term rentals.
Damian, Gianpaolo, Louise & Katie
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