With economic volatility, shifts in guest behavior, and the lingering impact of geopolitical factors like the U.S. trade war, property managers have to adapt faster and smarter than ever before. The days of relying on last year's strategy are over.
This blog builds on insights shared in Episode 1 of our STR Rev Talk webinar series. You can watch the full replay below.
Understanding the current market landscape
In 2025, travel behavior is shifting. Guests are waiting longer to book, staying for shorter periods, and behaving differently depending on where they’re going and how they plan to get there. The influence of inflation, employment concerns, and greater spontaneity in travel is apparent across all U.S. regions.
The budget listings are noticing the biggest impact of this increasing uncertainty. AirDNA published this graph showing drops of up to 4% in forward YoY occupancy pacing for budget properties in August, while luxury stays are seeing a slight increase. This might indicate that lower income families and individuals are waiting to book more than wealthy people.
Domestic vs. international travel trends
Budget listings are feeling the effects of uncertainty the most. According to data from AirDNA, forward year-over-year occupancy pacing for budget properties is down by as much as 4% in August. In contrast, luxury listings are seeing a slight uptick. This trend suggests that lower-income travelers may be holding off on booking, while higher-income guests continue to plan ahead with more confidence.
Slowing demand is real: What Orlando and Hawaii are telling us
Looking at two of the most heavily booked short-term rental markets in the U.S., Orlando and Hawaii, we’re seeing clear warning signs that demand is not where it used to be.
Let’s break it down.
Orlando: Occupancy is soft, booking pace is fragile
In Orlando, the data tells a clear cautionary tale. Forward-looking occupancy for May showed a late surge in pickup, with over 35% of bookings for the month made in the final 14 days, suggesting guests are waiting until the last minute.
However, that momentum didn’t carry into June, bookings for June flattened earlier, and forward occupancy as of mid-May was tracking 10–12% behind the same time last year, according to Wheelhouse data shared in the webinar.
What’s striking is that ADR remains relatively high, especially in early summer. That mismatch, between stagnant occupancy and elevated rates, is risky. As discussed in the webinar, many property managers are still holding out for rates that were successful in past years. But with guest booking windows shortening and families hesitant to commit early, these inflated expectations could lead to last-minute panic pricing.
This pattern aligns with what John An described as the “wait-and-drop” cycle: holding high rates too long, then slashing at the last minute, which creates a distorted picture of the market. It reinforces short booking windows not because guests prefer them, but because operators are conditioning the market that way.
The reality is: Orlando's soft demand isn't just a seasonal fluctuation. It’s a signal that operators must act early, adjusting base pricing now, building lead-time based discounts, and doubling down on listing optimization to secure earlier bookings.
Hawaii: Low occupancy masked by high ADR
Hawaii presents a slightly different, but equally troubling story. On the surface, ADRs look strong. The average daily rate for July and August is over $400, suggesting continued strength in pricing power.
But when you dig into the occupancy trend, the picture changes. May and June show a decent pace, but from July onward, occupancy falls sharply. That drop-off is especially pronounced in the past 14 days, meaning, we’re not seeing new bookings come in at the rate we’d expect at this time of year.
This reflects a broader issue in Hawaii: international travel softness and guest hesitancy. With more Americans choosing overseas destinations and fewer international travelers entering the U.S., Hawaii’s fly-to dependence is becoming a liability. Unlike drive-to markets that can rely on weekend trips or local bookings, Hawaii depends on long-haul, higher-commitment travelers and those travelers are holding off.
The gap between ADR and occupancy is a key indicator of mispricing. It’s not just about charging too much, it’s about the fact that price sensitivity is rising. Guests who might have paid $450 a night in 2023 are now questioning the value, especially with airfare, rental car costs, and broader inflation to consider.
Looking at 2 key markets in the U.S., Hawaii and Orlando, we can see some real warning signs of slowing demand.
The rise of the "missing middle"
One of the most telling and underappreciated booking trends in 2025 is what revenue managers and analysts are calling “the missing middle.” It refers to the sharp decline in mid-lead time bookings, particularly in the 30 to 60 day window. While bookings far in advance (90+ days) and those made last-minute (within 14 days) continue to occur, that crucial middle segment has thinned out across many U.S. markets.
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To compete in this compressed, hesitant window, it’s not just about pricing. Policy flexibility matters too. Guests shopping in the 30–60 day range are more likely to convert when they see options with favorable terms.
Here’s how to respond:
1. Adjust cancellation policies earlier.
Don’t wait until the final days to loosen your cancellation terms. For travel dates 30–45 days out, consider shifting from strict to moderate cancellation, especially if pacing is behind. This gives guests confidence to book earlier, knowing they won’t lose out if their plans change.
2. Loosen MinLOS dynamically.
During soft mid-lead periods, rigid 3- or 5-night minimum stays can block bookings that would otherwise fill your calendar. Use lead-time rules in your PMS or pricing software to automatically reduce your MinLOS to 2 or even 1 night within certain windows. For example, drop from 3 nights to 2 nights between 21–35 days out if occupancy is below target.
3. Layer in gradual price adjustments.
Rather than holding firm and then making a dramatic cut, apply small, timed discounts (e.g. 5–10%) starting 60 days out. This smooths your revenue curve and encourages mid-lead conversions while still protecting your average rate.
In today’s market, capturing demand early means adjusting early, long before the calendar screams urgency. The operators who win the middle will be those who build confidence for hesitant guests while proactively guiding owners through data-driven decisions.
Why you can't rely on past years
It’s tempting to look to 2023 or 2024 for guidance, but doing so can backfire. The market conditions shaping 2025 are fundamentally different. Waiting for demand to follow old patterns is a high-risk approach that may leave calendars empty and revenue below target.
Guest behavior is being influenced by a wider set of pressures: economic instability, inflation, rising airfare costs, and even changing attitudes toward work and leisure. As John An noted during our panel, "What the data says is not always what’s happening. Context matters."
Visibility is the new revenue lever
In today’s STR market, pricing alone won’t get you booked. If your listing isn’t being seen, it doesn’t matter how competitive your rates are. That’s why visibility, your placement and appeal in OTA search results has become just as important as pricing.
Think like an ecommerce brand
You should treat your listings like high-performing product pages:
- Title: Use mobile-friendly, keyword-rich titles that highlight key features or location perks.
- Photos: Lead with your most compelling visual, not just the living room, but maybe the pool or the view.
- Captions & categories: Rich, descriptive captions and proper category tagging (like Airbnb’s “Amazing Views” or “Cabin”) help you show up in curated filters.
- Activity signals: OTA algorithms reward listings that are updated regularly and get quick responses to inquiries.
Pricing and visibility go hand-in-hand
Too often, property managers drop rates when bookings slow, but ignore visibility issues. If your impressions are down, the problem isn’t price, it’s discoverability. On the flip side, if views are strong but conversions are weak, pricing or presentation might need work.
To fix this, monitor visibility metrics weekly: views, saves, and conversion rates. Refresh photos, rotate titles, and run small tests to stay in the algorithm’s good graces.
Tools like AutoRank help scale this effort, keeping listings optimized across platforms without the manual work.
Building a new kind of revenue strategy
In a short-term rental market defined by fluctuating demand, shorter booking windows, and rising guest expectations, the old playbook no longer applies. To stay competitive in 2025, property managers need a revenue strategy that blends technology, segmentation, and proactive decision-making.
Combine tools with strategic oversight
Dynamic pricing platforms like Wheelhouse and PriceLabs remain essential, but they’re not the whole solution. As Jarne Van Compernolle explained, “A Formula 1 car needs a skilled driver.” These platforms give you speed, but it’s human oversight that determines direction.
Revenue management today requires active interpretation of data. That means stepping in frequently to override static settings, fine-tune stay restrictions, adjust policies, and align your strategy with fast-moving market signals.
Segment strategy by listing type and guest behavior
Forget blanket pricing rules. The days of applying a single strategy across a portfolio are over. Whether it’s a weekend-focused city studio or a 5-bedroom coastal villa, every listing has its own pacing, audience, and seasonality.
What key indicators should you track to determine local and international demand
The most successful revenue managers don’t just look at occupancy. They track a specific set of forward-looking KPIs, review them weekly (sometimes daily), and adjust accordingly. Here are the metrics that matter most:
1. Far-out occupancy and pacing
This is your earliest and most important signal. Are bookings coming in 30–90 days out? If not, it may not be a pricing issue, it could be timing, visibility, or policy-related friction. Comparing pacing across property types and submarkets helps you identify whether slow pickup is market-wide or isolated to certain segments.
“Don’t just compare your bookings to last year, look at what’s coming in now, for which properties, and at what speed.”
2. ADR evolution closer to check-in
While far-out ADR can be misleading, watching how rates change as the arrival date approaches is essential. If you notice steep price drops across your market, it could indicate soft demand. If prices are rising, demand may be stronger than anticipated, but that’s increasingly rare.
Use ADR deltas (i.e., changes in price over time) to assess whether you’re headed for a rate crash or have room to hold.
3. Pacing within your portfolio
It’s not just about market-level trends. Look at your own listings: are bookings concentrated in your top performers? If 10–20% of your units are consistently underperforming, you may have a visibility or pricing issue on your hands. Healthy portfolios pace somewhat evenly, if not, you're leaving revenue on the table.
4. Forward-looking page views
Page views are a valuable early indicator of booking potential. If your conversion rate is generally stable, but views are dropping, that’s a strong signal your listing isn’t being seen, and pricing won’t fix that alone. On the other hand, high views but no bookings point to a pricing or trust issue (e.g., bad reviews, poor photos, or inflexible policies).
5. OTA visibility and activity
Frequent listing updates, prompt responses, and policy flexibility all influence your search position on platforms like Airbnb and Booking.com. Weekly adjustments to pricing, content, and availability aren’t optional, they’re required to stay visible in increasingly competitive search environments.
Scale strategy without increasing overhead
For many operators managing 10 to 50 listings, revenue management can fall into a tricky middle ground. There's a need for more strategic oversight than automated pricing tools can offer, but not enough volume to justify a full-time revenue manager.
This is where working with a dedicated revenue service becomes valuable. Instead of relying solely on algorithmic pricing, services like AutoRank combine listing optimization with real-time data to improve both visibility and booking performance. It’s not just about adjusting rates, it’s about understanding what’s driving (or limiting) demand, and responding accordingly.
By focusing on both pricing and OTA ranking, these services help operators get seen by the right guests, capture demand earlier, and avoid reactive last-minute decisions. The result is a more consistent, scalable approach to revenue growth, without the burden of expanding your internal team.
Bridging the gap between owners and revenue managers
One of the most underestimated challenges in today's STR landscape is aligning the perspectives of property owners with the realities of market dynamics. While revenue managers are often immersed in daily data, pacing indicators, and competitive shifts, owners tend to view performance through a broader, often historical lens.
This disconnect can be particularly dangerous in a volatile environment like 2025. As demand softens and booking behavior shifts, waiting too long to adjust pricing can result in unfilled nights that are impossible to recover. But when owners resist price reductions or reject the idea of adjusting minimum stays or cancellation policies, even a highly skilled revenue strategy can stall.
Understanding risk tolerance
At the heart of the disconnect lies differing risk tolerance. Revenue managers, by nature and training, operate with a data-first mindset. They monitor forward-looking occupancy, keep a pulse on competitor pricing, and track pacing daily. Their goal is often to reduce risk by capturing bookings early, maintaining consistent occupancy, and avoiding last-minute volatility.
Owners, on the other hand, may be more emotionally invested in the perceived value of their property. Many interpret price reductions as a reflection of quality, or worse, a signal that their investment is underperforming. Some may prefer to take the gamble of holding out for a higher rate, believing that last-minute bookings will save the month, even if the pacing data says otherwise.
Communicating through data and framing
So how do you bridge this gap?
The most successful operators do two things exceptionally well: they frame recommendations through the lens of opportunity, and they use objective data to support their case.
For example:
- Instead of saying, “We need to drop the price,” say: “At this rate, we’re seeing lower views and weaker conversion compared to last year. If we adjust now, we’re more likely to capture early bookers before the market gets crowded.”
- Offer a test strategy: “Let’s lower the rate for the next 10–14 days and review the results together. If it doesn’t generate more bookings, we’ll reevaluate.”
This collaborative approach not only builds trust, but also gives owners a sense of control. It shows that pricing isn’t a guess, it’s a strategy with measurable outcomes.
Adapting with confidence
The best-performing operators of 2025 won’t be the ones with the lowest prices or the most aggressive discounts. They’ll be the ones who adapt with confidence, communicate clearly, and iterate constantly.
They’ll align owner expectations with real-time data. They’ll treat revenue management as an ongoing process, not a static set of rules. They’ll understand that guest behavior, OTA algorithms, and macroeconomics all interact in complex ways and build strategies to match.
In a market defined by change, flexibility isn’t just a competitive advantage, it’s a necessity. The ability to move fast, test frequently, and communicate clearly will define who thrives and who lags behind.
Looking to boost your listing performance and navigate uncertainty with confidence? Book a call with our team or explore how AutoRank can help you optimize for visibility, search performance, and smarter pricing.