Short-term rental operators are increasingly turning to artificial intelligence to protect margins and stay competitive as market pressure intensifies, according to new global research from vacation rental management platform Hostaway.
Findings from Hostaway’s 2026 Short-Term Rental Report, which surveyed over 300 operators across 46 countries, show that competition – rather than regulation – is now the dominant challenge facing the sector.
Nearly three-quarters of respondents said their local market is more competitive than a year ago, while a majority reported that regulatory changes have had little direct impact on performance.
AI adoption accelerates as operators seek efficiency
As competition increases, AI is becoming a core operational tool. The report found that 61% of operators used AI tools in 2025, rising to 79% among managers overseeing portfolios of over 50 properties. Larger operators are already seeing measurable benefits, with almost a third saving more than five hours per week and over half reporting monthly cost savings in the hundreds.
AI adoption varies by region, reflecting different operational pressures. European operators are currently leading usage rates, followed by operators in other global markets, with adoption in the US slightly behind.
Despite this, the report highlights significant upside potential as AI tools become more embedded into day-to-day property management workflows and easier for smaller operators to deploy.
Growth outlook remains positive, but pressure persists
Performance indicators remained broadly stable throughout 2025, with occupancy and average daily rates holding firm. Looking ahead, sentiment is cautiously optimistic. Around 60% of respondents expect occupancy to increase over the next year, while a similar proportion forecast ADR growth.
Revenue performance was strongest among operators using AI. A higher proportion of AI adopters reported annual revenues exceeding both $100,000 and $500,000 compared with non-users, suggesting a growing link between automation, scale and financial resilience.
Direct bookings remain an underexploited opportunity
Despite widespread adoption of direct booking websites, most operators continue to rely heavily on third-party platforms. Nearly two-thirds generate under a quarter of bookings through owned channels, while almost one in five receive no direct bookings at all. Airbnb remains the dominant source of demand for most operators.
Marketing strategies reflect this imbalance. While SEO and organic social media are common, fewer operators prioritise retention-focused tactics such as email marketing, loyalty schemes and repeat guest strategies – areas the report identifies as some of the most accessible levers for improving direct booking performance.
“Competition is intense across most short-term rental markets, and our latest report shows that those pulling ahead are the operators embracing AI and technology to work smarter and boost their revenue without extra costs. What’s clear from this report is that AI is no longer optional.
“With each passing month, if not week, more and more short-term rental operators are becoming astute AI users. If you do not count yourself among those operators, you have already fallen behind the pack.”
Marcus Rader, CEO and Co-Founder, Hostaway
