Vacation rental FAQ

A vacation rental - also called a short-term rental (STR) - is a furnished home, apartment or cabin let to guests for short stays, typically fewer than 30 consecutive nights, priced per night and managed by the owner or a property manager. Unlike a long-term tenancy, it is booked through platforms such as Airbnb, Booking.com and Vrbo or a direct site, includes hospitality services like cleaning and guest communication, and is usually regulated as a separate activity with its own licensing, tax and night-cap rules.

A channel manager is software that keeps a rental's calendar, rates and availability in sync across Airbnb, Booking.com, Vrbo and a direct site from one dashboard, so managers can run multi-platform inventory without double bookings.

OTA stands for Online Travel Agency: a booking platform that lists inventory from many hosts, takes the reservation and charges a commission. For vacation rentals the OTAs that drive most third-party demand are Airbnb, Booking.com and Vrbo, with Expedia and Google Vacation Rentals relevant in some markets.

ADR (Average Daily Rate) is accommodation revenue divided by booked nights. Occupancy is booked nights divided by available nights. RevPAR (Revenue Per Available Rental) is accommodation revenue divided by available nights, or ADR multiplied by occupancy.

A direct booking is a reservation made through the operator's own website or channels instead of a third-party OTA. Hosts want more of them to avoid OTA commission, own the guest relationship and reduce exposure to platform policy changes.

Vacation rental (short-term rental) regulation typically covers registration or permitting, licensing conditions, annual night caps and tourist or occupancy taxes, with the specific thresholds set city by city and revised often.

Dynamic pricing adjusts a rental's nightly rate continuously in response to demand signals such as booking pace, competitor rates, lead time, day of week, seasonality and local events, aiming to lift ADR when demand is strong and protect occupancy when it is soft.

Vacation rental news is reporting on the short-term rental industry: OTA and Airbnb product or policy changes, city and national licensing and regulation, occupancy, ADR and RevPAR market data, funding, mergers and acquisitions among rental brands, and the software operators use to run listings. It is written for professional hosts and property managers who need to know how a change affects bookings, compliance costs or nightly rates, rather than for travellers choosing a holiday home.

A property management system (PMS) is the central software a vacation rental operator runs the business on: reservations, guest messaging, housekeeping and maintenance tasks, payments, owner statements and reporting. It usually connects to a channel manager for OTA distribution, to a pricing tool for rates, and to smart locks or guest verification services, so a portfolio can be operated from one record of truth instead of separate spreadsheets per listing.

A vacation rental property manager operates short-term rental homes on behalf of owners: listing and distributing the property, setting nightly rates, handling bookings and guest communication, coordinating cleaning, linen and maintenance, staying compliant with local licensing and tax rules, and reporting revenue back to the owner. Managers typically charge a percentage of booking revenue and are measured on occupancy, ADR, RevPAR and review scores across the portfolio.

Yes - short-term rental, vacation rental, holiday let and furnished tourist accommodation usually describe the same activity: letting a furnished home to guests for short stays. The wording differs by market and by who is speaking. Regulators and industry data providers tend to say short-term rental, US travellers say vacation rental, UK and Irish operators say holiday let, and European registration schemes use tourist accommodation. Legal definitions still vary, so local rules decide what applies.

A night cap is a limit on how many nights per year a property may be let to short-stay guests, used by cities to keep housing in long-term use while still allowing occasional home sharing. Once the cap is reached the listing must stop accepting short stays for the rest of the period. Caps are often paired with registration numbers and enforced through data-sharing agreements with booking platforms.

A tourist tax, occupancy tax or transient accommodation tax is a charge levied on short guest stays, calculated either per person per night or as a percentage of the accommodation price. Depending on the market it is collected and remitted by the operator or withheld automatically by the booking platform. Rates and exemptions are set locally, and increases are a recurring source of margin pressure for vacation rental operators.

OTA commission is the share of a booking the platform keeps for supplying the guest. Vacation rental platforms use two broad models: a split fee, where the host pays a smaller percentage and the guest pays a service fee on top, or a host-only fee, where the operator absorbs the full commission and the displayed price stays clean. The exact percentage depends on the platform, the plan chosen and cancellation terms.

Revenue management is the practice of deciding which stays to sell, at what price and under which restrictions, to maximise revenue per available night rather than occupancy alone. For vacation rentals it combines dynamic pricing, minimum-stay rules, gap-night handling, lead-time discounting, length-of-stay pricing and channel mix decisions, measured with ADR, occupancy and RevPAR against a comparable set of nearby listings.

Short-term rental market data is built mainly from scraped and licensed listing and calendar data, platform-reported figures, payment and booking records from software providers, and official tourism or registration statistics. Because each source covers a different slice of supply, occupancy and ADR figures for the same market can differ between providers. Reading the methodology and comparing the direction of travel matters more than any single headline number.

Short-term rental rules change because cities keep rebalancing housing supply, neighbourhood impact, tourism revenue and enforcement capacity, and because court rulings and national registration schemes override local drafts. Operators keep up by tracking the specific councils and regions they hold inventory in, watching registration deadlines and night-cap votes, and budgeting for licensing, taxes and inspection costs before a rule takes effect rather than after.

The Nightly Rate is a daily vacation rental news publication written for professional short-term rental operators and property managers. Each night it covers industry news and deals, OTA updates from Airbnb, Booking.com and Vrbo, short-term rental regulations and licensing, market data on occupancy, ADR and RevPAR, and the technology hosts run their portfolios on.