U.S. short-term rentals are experiencing a record surge in demand this summer. In July 2025 alone, bookings hit 26.4 million nights stayed, marking a new monthly high and a 3.6% increase year-over-year.
This spike comes ahead of the Labor Day weekend, traditionally the summer’s last big travel push, indicating robust domestic travel momentum. Industry data show that average daily rates (ADR) climbed 6.9% compared to last year, as travelers proved willing to pay more for vacation stays.
The soaring demand is being driven primarily by American vacationers opting to stay stateside, especially flocking to beach destinations and resort areas, even as international visitor numbers lag.
Record Summer Demand Fueled by Domestic Travelers
Domestic leisure travel has powered the short-term rental (STR) market to new heights in 2025. Americans are vacationing within the U.S. in massive numbers, easily offsetting a decline in foreign tourists.
July’s 26.4 million rented nights not only exceeded last summer’s levels but set an all-time record for any month. Industry analysts note that U.S. beaches and other traditional summer hotspots saw an influx of local travelers, filling vacation homes and condos that might normally host more international guests.
For example, in tourism-heavy Florida an overwhelming 91.5% of summer visitors were domestic U.S. travelers (with overseas tourists just 6.7% and Canadians 1.9%). This surge of in-country demand underscores how U.S. vacationers have been making the most of easier travel conditions at home, even as some global factors discourage cross-border trips.
Critically, this boom in U.S. STR demand comes despite a softening in occupancy rates when measured against rising supply. Industry data shows available short-term rental listings were up ~4.5% year-over-year , slightly outpacing demand growth.
As a result, nationwide occupancy averaged 67.4% in July, about 1% lower than last year. In other words, more nights were booked in absolute terms, even if the percentage of filled rooms fell a bit due to more rentals on the market.
Yet higher pricing ensured that revenue kept flowing: U.S. revenue per available rental (RevPAR) rose 5.7% in July compared to 2024. The willingness of travelers to plan getaways and spend on lodging – even amid economic uncertainties – signals a resilient domestic travel appetite as summer winds down.
Bigger Rentals and Higher Rates Drive Revenue
Another standout trend reshaping the STR market is the soaring popularity of large vacation rentals. Travelers are increasingly booking high-capacity properties like think multi-bedroom beach houses, villas, and mountain lodges for their getaways.
Since February, demand for large homes (6+ bedroom rentals) has grown over 13 times faster than demand for one-bedroom listings, and roughly four times faster than for two-bedroom units.
In other words, big group trips (such as multi-generational family vacations or friend reunions) are on the rise, and renters are seeking spacious accommodations to suit their needs. This trend toward “go big” rentals is a key factor that helped push July’s booking numbers to record levels.
With vacationers gravitating to larger, often more luxurious properties, pricing power has strengthened. The average nightly rate paid for a U.S. short-term rental has jumped by about 6.9% year-over-year. For July 2025, the nationwide ADR reached $351.67, a reflection of both inflation and the fact that travelers are renting higher-end, higher-cost homes.
Even though occupancy was down a touch, these higher rates per night more than compensated, lifting overall host revenues. Property owners and managers have been able to raise prices without dampening demand, especially in desirable leisure markets.
Many report that upscale amenities and larger spaces are commanding premium pricing as vacationers splurge on memorable trips. The result is a short-term rental market that is not only busier than ever, but also yielding greater revenue for each night booked.
Domestic Getaways Eclipse International Travel
One striking aspect of this summer’s travel boom is how home-grown it is. While Americans pack into beach towns, lake cabins, and national park gateways, far fewer international travelers are visiting the U.S. this year – contributing to a notable shift in who is occupying short-term rentals.
According to industry data, international demand for U.S. short-term rentals fell roughly 16% in recent months as compared to last year, even as overall demand hit record highs. In particular, travel from Canada has dropped sharply, hitting U.S. tourism and rentals in border-state markets.
Canadian bookings for U.S. vacation rentals have plummeted – one analysis showed nearly a 50% collapse in stays by Canadian travelers versus the same period in 2024. This decline coincides with a tumultuous year in U.S.-Canada relations.
Early in 2025, Canada’s government openly discouraged its citizens from vacationing in the U.S. amid political and trade tensions, prompting many to “choose Canada” for their holidays instead. Indeed, official figures show the number of Canadians returning from U.S. trips by car was down 36.9% in July, with returns by air down 25.8% – a dramatic drop in cross-border travel.
Other overseas visitor segments also remained soft. Overall foreign arrivals to U.S. destinations have not rebounded to pre-pandemic or prior-year levels, due to factors ranging from a strong dollar (making U.S. stays more expensive) to shifting perceptions of America as a travel destination.
This means the current STR boom is largely an all-American affair. U.S. hosts who previously catered to many European, Asian, or Canadian guests are seeing a greater share of domestic guests this summer.
Markets that typically rely on international tourism – big cities like New York or San Francisco, for example – have faced headwinds, while purely domestic vacation regions are thriving.
The shortfall in foreign visitors has been most acute in places near the Canadian border and other areas popular with Canadians. For instance, tourism officials in border states like New Hampshire have reported Canadian tourist numbers down about 30% this year in some spots.
The good news for rental owners is that Americans are filling many of those vacancies, keeping occupancy and revenue robust in leisure markets. But the shift underscores a strategic pivot: property managers are focusing marketing efforts more on U.S. guests, and some are rolling out incentives to lure back international travelers in the future.
Labor Day Travel Trends and Outlook
All eyes now turn to Labor Day weekend, and indications are that this end-of-summer holiday will cap the season on a high note for short-term rentals. Despite some mid-summer occupancy softness, holiday weekends remain a bright spot for the industry. Advance booking data shows Labor Day travel demand is up significantly in many destinations compared to last year.
In fact, 18 of 24 major U.S. markets tracked are showing more nights booked for Labor Day weekend than at the same point in 2024. Americans are clearly seizing the three-day weekend to get away. Beach and resort areas figure prominently among the hotspots: for example, Destin, FL has 32% more Labor Day bookings than last year, and South Lake Tahoe, CA is up 32% as well.
Some city destinations are also benefiting – Atlanta’s bookings are 37% higher, and Chicago and Seattle are seeing solid late-summer upticks. On the other hand, a few markets are lagging; places like Las Vegas and Washington D.C. are pacing behind, reflecting how urban STRs still face challenges without as many foreign visitors or with business travel subdued. Overall, though, the nationwide trend for Labor Day is positive, suggesting Americans are making one last summer splash.
Travel experts note that last-minute bookings are playing a role this year. Many travelers held off longer before committing, likely watching economic news or weather forecasts, but then ultimately decided to go. This has created some uneven patterns – property managers in some regions have had to offer discounts to fill lingering vacancies, while more popular destinations have nearly sold out at high rates.
Average nightly prices for Labor Day stays are a bit higher than last year in most areas (roughly 3% up, per industry indexes ), though pricing strength varies. The Northeast, for instance, is seeing strong rates, whereas some markets in the Midwest and South have seen hosts trim rates to entice late bookers.
The overarching takeaway is that Labor Day 2025 is set to reinforce the summer’s themes: Americans are traveling in big numbers, favoring leisure-oriented locales, and they’re often willing to pay a premium for prime accommodation – especially if it means securing that perfect beach house or mountain cabin for the long weekend.
Why It Matters
The surge in domestic short-term rental demand – coupled with a retreat of international travelers – is reshaping end-of-summer tourism and property strategies in the U.S. For the travel industry, it signals that American travelers are currently the engine of growth, prioritizing leisure trips and larger group stays.
This boom in local tourism is a silver lining for rental hosts and investors: many are capitalizing by catering to upscale domestic clientele seeking spacious, high-amenity rentals. We’re seeing property owners respond by adding larger rental homes to their portfolios, upping amenities (from pools to game rooms) to justify higher rates, and targeting their marketing toward U.S. families and groups. Luxury and big-format rentals are emerging as a key segment, as evidenced by the outsized demand growth for 6+ bedroom properties.
Destinations and tourism boards are also taking note. Those in areas that normally rely on foreign visitors are pivoting to attract more U.S. travelers, at least in the near term.
Some are launching campaigns highlighting road trips and “staycation” style experiences to draw Americans who might otherwise travel abroad. Conversely, once international conditions improve, there could be a pent-up opportunity — when foreign travelers return in larger numbers, the STR market might see an even bigger lift, given the expanded inventory and refined offerings hosts have developed in this domestic boom period.
For travelers, the current trends carry mixed implications. On one hand, the wealth of rental options and host competition (with a growing supply of listings) can mean good deals, especially for last-minute planners or those flexible on location.
On the other, popular destinations are experiencing high occupancy and rising prices, so procrastinating travelers may find limited choices or premium price tags for peak holiday dates. Travel advisors suggest booking early for sought-after spots or considering alternative destinations that haven’t seen as much demand growth.
Overall, the Labor Day 2025 STR outlook appears strong and symbolizes a broader shift: domestic leisure travel is king this season, and it’s redefining strategies in the short-term rental industry.
As summer turns to fall, U.S. rental hosts are riding this wave of demand, hopeful that the combination of Americans’ wanderlust and gradually returning foreign visitors will keep the momentum going.
The end-of-summer boom is a clear reminder that even in a changing global travel landscape, America’s love for a home-away-from-home getaway remains as strong as ever.