As we step into 2025, the short-term rental sector faces an exciting combination of opportunities and challenges. Based on predictions by Simon Lehmann, CEO and Co-Founder of AJL Atelier, and insights from leading conferences such as VRMA International, VRWS, ASTRA, DARM, and Scale, let’s explore the key trends shaping the industry.
Predictions for short-term rentals in 2025
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Accelerated consolidation in short-term rentals
The fragmented nature of short-term rental management is expected to drive more mergers, acquisitions, and strategic partnerships. Market leaders will be those who can expand efficiently while maintaining high service quality. Consolidation will not only involve small businesses but also major players aiming to dominate local and international markets.
Insights from 2024: In March 2024, Guesty acquired Rentals United, marking a significant move in the tech sector. Additionally, Host & Stay, a UK-based management company, acquired Guest Homes and Hartland Property Management.
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Private equity: A catalyst for growth
The influx of private equity capital will reshape the industry, accelerating innovation, consolidation, and market expansion. Companies backed by private equity will set the pace for growth and professionalization, creating new operational and innovation standards.
Insights from 2024: The private equity firm Risk Capital Partners invested in Simpson Travel, a company specializing in Mediterranean vacation destinations, including Greece.
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Artificial Intelligence in short-term rentals
AI will no longer be a luxury but an essential tool for competitiveness. Applications such as dynamic pricing, guest engagement, operational automation, and content optimization will become indispensable for industry professionals.
Insights from 2024: Since ChatGPT’s debut in 2023, a new world of possibilities has emerged. In 2024, AI was a topic of discussion across nearly every economic sector. In tourism, AI made significant inroads: Greece’s Ministry of Tourism launched the mAiGreece app in June (currently in beta), while in the private sector, Hostaway became the first short-term rental software company to integrate AI. In Greece, Hosthub introduced the AI Assistant to transform communication between managers and guests. PrimeHost, a Greek tech company, developed AI tools tailored specifically for short-term rental managers.
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Regulation: Stricter but structured
Cities and regions will continue grappling with industry regulations. However, 2025 is expected to bring more structured frameworks that balance community concerns with business opportunities. Professionals who adapt to these changes will maintain a competitive edge.
Insights from 2024: In Greece, starting in 2024, individuals owning three or more properties are required to establish a business entity. Additionally, a Residence Tax and Climate Resilience Fee have been imposed. Management companies are now subject to an extra Operational Fee for each property under their control. Moreover, as of January 1, 2025, issuing new AMAs (Short-Term Rental Property Registration Numbers) will be prohibited in three central districts of Athens.
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Climate and geopolitical factors
Environmental disasters, geopolitical conflicts, and natural phenomena such as floods and wildfires will influence travel patterns. Destinations that adapt to new conditions will emerge as winners.
Insights from 2024: October in Greece saw the highest occupancy rate increase in short-term rentals across Europe, while during the summer, northern (and cooler) countries experienced the greatest growth.
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Professionalization redefines the sector
The gap between amateur and professional managers will widen. Those investing in technology, operational excellence, and optimal guest experiences will lead the market, heralding a new era for short-term rentals.
Insights from 2024: The 2024 ShortStay Conference focused on tools and practices that enhance service quality and operational efficiency for both short-term rental companies and individual property owners. The 2025 ShortStay Conference, scheduled for February 14-15, aims to equip industry participants with the resources needed to stand out from the competition.
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Growth in luxury and specialized markets
Demand for luxury accommodations and high-value experiences will rise. From premium villas to unique stays, travelers increasingly seek personalized options.
Insights from 2024: British company CV Villas reported a 29% increase in bookings for villas in Greece for 2025.
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Technological Innovation
Technology in the short-term rental sector will continue to attract investments. Property management systems, automation, and guest experience tools will be at the forefront, shaping the industry’s future.
Insights from 2024: Hostaway secured $365 million in funding at the end of the year—the largest investment in the sector.
Conclusion
2025 is poised to be a year full of challenges but also significant opportunities for the short-term rental sector. Professionalization, innovation, and adaptation to regulatory and environmental changes will be key to success. Professionals who invest in technology and deliver high-quality, personalized experiences will lead the industry.
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