The short-term rental market in Italy showed significant signs of fatigue in 2025, as after two years of strong post-pandemic recovery, the revenues of owners and managers recorded a noticeable decline.
According to data collected by Italianway, net profits from short-term rentals fell by an average of nearly 16%, reflecting weaker demand and increasing operational challenges.
The country’s top tourist destinations, such as Venice, Florence, and Rome, are recording fewer bookings, lower occupancy rates, and reduced returns, indicating that the sector is entering a new phase of maturity after the post-pandemic “surge.”
Reduced returns in top tourist markets
In Venice, annual net revenues per property – after expenses and taxes – fell by almost 17%, from €21,672 to around €18,000. Despite the decline, returns remain relatively high, as gross profit corresponds to 10.8% of property value. However, occupancy dropped significantly, with rental weeks decreasing from 62% to 55% of the year.
A similar picture is observed in Florence, where annual net revenues fell by 12.6%, bringing yields down to 6.8%. Occupancy decreased from 61% to 58%, confirming the weakening demand. In Rome, the decline was milder, at 9.4%, with yields standing at 9.5%, showing greater resilience compared to other popular destinations.
Decline in arrivals – tighter restrictions
Decline in arrivals – tighter restrictionsAccording to market stakeholders, the slowdown is linked both to a reduction in high-spending international arrivals and to a stricter regulatory framework. The mandatory use of a national property identification number, increased tax audits, and new European requirements for short-term rental platforms are raising the administrative burden for managers and property owners.
At the same time, supply continues to grow. According to the national accommodation registry MITUR (BDSR), more than 718,000 short-term rental units are registered in Italy, of which around 72,000 are located in the 20 largest provincial markets in the country. The maintenance of high supply levels combined with the slowdown in bookings is limiting price increases and intensifying competition among properties.
The president of AIGAB (Italian Short-Term Rental Managers Association), Marco Celani, attributes the slowdown to multiple factors. As he notes, prices, after peaking in 2023, have been on a downward trend, while there is a general decline in demand from high-spending international visitors, particularly from the US and Asia.
An exception to the general trend is Milan. The city recorded a marginal revenue decline of just 0.5% year-on-year, confirming the differentiation of its tourism model compared to the country’s traditional cultural destinations.
The developments indicate that the short-term rental market in Italy is entering a period of rebalancing after the strong post-pandemic expansion. With occupancy and revenues declining, the sector’s trajectory will depend on the evolution of international demand, the return of high-spending tourists, and the adaptation of businesses to the new regulatory environment.
