According to data from analytics site AirDNA, there are 15 U.S. cities and towns where more than half of all short-term rental listings are controlled by hosts with large property portfolios. These areas are often prime vacation destinations such as the ski resorts of Steamboat Springs, Colorado, and the seaside towns of Lincoln City and Newport in Oregon. In Steamboat Springs, for instance, professional hosts manage over 60% of the town’s short-term rental inventory. This high concentration of properties under professional management reflects a growing trend where small-scale hosts compete against well-established players who can leverage economies of scale to optimize their operations and pricing strategies.
Local Responses and Regulations
The rise of mega-hosts has not gone unnoticed by local governments. In Steamboat Springs, a 9% tax was introduced in 2022 on short-term rentals to address the shrinking availability of affordable housing for local workers. Moreover, in 2023, the town implemented zoning changes that created “red zones,” where new short-term rental permits are prohibited. These measures aim to balance the benefits of tourism with the needs of local residents.
While some property owners in the red zones have expressed concerns about losing significant rental income, others have welcomed the change. Torey Wodnik, a resident of Steamboat Springs, expressed satisfaction with the new regulations, noting the positive impact of having more full-time neighbors. “It’s been really lovely,” Wodnik shared with local radio outlet KUNC, highlighting the enhanced sense of community brought by year-round residents.
Thriving in Dominated Short-Term Rental Markets
For individuals considering entering the short-term rental market in these dominated areas, the scenario presents both challenges and opportunities. Jamie Lane, an economist at AirDNA, advises new hosts to be aware of the competitive environment. “Being the David against a Goliath means you will likely have to compete in multiple ways with hosts who are well-oiled machines,” Lane explained. This includes competing for ancillary services like cleaning, which may prefer the consistent work offered by large-volume operators.
However, Lane also points out that areas like guest services and communication can be avenues where smaller operators distinguish themselves. By focusing on personalized guest experiences and superior service, new hosts can carve out a niche that may appeal to travelers looking for a more bespoke experience compared to the standardized offerings of larger hosts.
Conclusion: A Complex Market Dynamic
The domination of mega-hosts in certain markets underscores the evolving dynamics of the Airbnb ecosystem, where scale can significantly influence market presence and operational efficiencies. For prospective hosts, understanding these dynamics is crucial to navigate the competitive landscape effectively.
Meanwhile, for travelers, the growing professionalism in the short-term rental market promises improved quality but also calls for careful selection to find unique and personal accommodations. As the market continues to mature, both hosts and guests will need to adapt to the changing realities of short-term rentals.
