Vacation rentals are booming while hotels falter, according to the May 2025 Skift Travel Health Index. With STRs up 12% year-over-year and Brazil seeing 105% booking growth, we explore why short-term rentals are leading the travel rebound—and what this means for hosts.
We unpack the May 2025 Skift Travel Health Index and why vacation rentals are pulling ahead while hotels face mounting pressure.
Vacation Rentals Take the Lead in Post-Pandemic Growth
The Skift Travel Health Index hit 102 in May 2025, marking steady growth across the global travel industry. But beneath the surface, short-term rentals are making the biggest moves. The sector posted a 12% year-on-year surge, with Brazil leading the charge at a staggering 105% increase in bookings. While occupancy saw a slight dip—likely due to seasonal oversupply—RevPAR projections remain strong. AirDNA’s latest forecast shows continued momentum into 2026, making this a defining moment for the STR space.
For hosts and property managers, this signals a major opportunity. Demand is high, consumer behaviour continues to favour the flexibility and comfort of vacation rentals, and international growth is on the rise. Operators who focus on refining their pricing strategy, investing in guest experience, and exploring new markets will be best positioned to ride this wave into the future.
Hotels Under Pressure: Time to Rethink the Playbook
While STRs soar, hotels are facing headwinds. PwC has revised its U.S. hotel forecast downward, now predicting a modest 0.9% increase in RevPAR for the year. Booking momentum is slowing in key regions like North America and Europe, and Average Daily Rates are being cut in an attempt to reignite demand.
This divergence between hotels and STRs isn’t just a trend—it’s a shift in traveller mindset. As guests seek more personalised, home-like experiences, short-term rentals are stepping up to deliver. For hoteliers and STR operators alike, the message is clear: agility, authenticity, and adaptability are the new benchmarks for success in a post-pandemic travel economy.
Takeaways for STR Hosts
✅ Double down on flexible stays and localised experiences
✅ Optimise pricing to capture high demand without sacrificing RevPAR
✅ Monitor regional trends (like Brazil’s boom) for potential expansion opportunities
✅ Use guest feedback and review data to enhance loyalty and repeat bookings
Final Thought: The STR Sector’s Time Is Now
The latest data makes one thing crystal clear—short-term rentals aren’t just surviving; they’re leading. As the travel industry evolves, operators who stay informed and act strategically will shape the next era of hospitality. Don’t just ride the wave—own it.
Ready to elevate your direct booking game? Visit the Boostly website for the tools, strategies, and support you need to succeed in 2025 and beyond. And remember: Book Direct
