Italy, Croatia, France, Spain, Portugal, Czech Republic, US, and UK Drive Unstoppable Growth and Dynamic Transformation in Europe’s Short-Term Rental Market – Travel And Tour World

The short-term rental market across Italy, Croatia, France, Spain, Portugal, the Czech Republic, the US, and the UK is experiencing explosive growth, driven by shifting traveller preferences and innovative accommodation offerings. These countries are at the forefront of redefining Europe’s rental landscape, fueled by diverse guest demographics, increased demand for flexible and spacious stays, and the rise of new travel trends. This dynamic transformation is reshaping the industry, presenting unmatched opportunities for destinations to attract high-value travellers while addressing evolving market needs.

Europe’s Short-Term Rental Market: Evolving, Diversifying, and Challenging Old Perceptions

Despite ongoing controversies around housing availability, regulatory challenges, and market saturation concerns, Europe’s short-term rental (STR) market is thriving in new and unexpected ways. Far from being a simple budget-friendly alternative to hotels, the STR sector is evolving into a mature and dynamic segment of the travel industry. Understanding these changes is critical for policymakers, destination managers, and stakeholders who aim to balance growth with sustainability.

This perspective is grounded in a recent white paper authored by Mabrian, a global travel intelligence platform within the Almawave Group, in partnership with Phocuswright and The Data Appeal Company – Almawave Group. The report was prepared ahead of the Phocuswright Europe 2025 event, set to take place in Barcelona this June. It provides fresh insights into the demographics, preferences, and trends shaping the STR landscape in six major European destinations.

Beyond Budget Travel: STRs Attracting Affluent and Diverse Guests

A common misconception about STRs is that they primarily serve budget-conscious travellers. However, data from key European cities like Rome, Dubrovnik, and Paris show that this is far from the full picture. Over 65% of U.S. guests booking STRs in these cities belong to high or very high-income brackets, reflecting a substantial demand from affluent travellers. Across multiple source markets, such guests represent between half and 70% of STR bookings.

Even visitors from France and the UK who choose STRs predominantly come from middle- to upper-income segments. Their motivation often centers on lifestyle factors—such as more spacious accommodations, greater flexibility, and better locations—rather than just lower costs. STRs, in this sense, are increasingly seen as premium or lifestyle-driven choices rather than purely economical alternatives to hotels.

The Rise of “Silver” Travellers: An Untapped Market Segment

Another important trend highlighted in the report is the growth of the “silver traveller” segment—those aged 55 and above. In several key markets, this age group accounts for between 5.5% and nearly 10% of STR demand, particularly among American and French tourists.

This demographic holds immense potential for destinations seeking to promote tourism outside peak seasons. Older travellers often prioritize privacy, access to kitchen facilities, and quieter neighborhoods—features where STRs have a distinct advantage. According to Phocuswright data, 57% of guests in this age group view STRs as offering superior value compared to traditional lodging options. By catering to this niche, destinations can encourage more year-round tourism and reduce overcrowding during high-demand periods.

Destination-Specific STR Preferences: Size and Type Matter

The report also reveals that STR preferences differ markedly depending on the destination’s character and tourism profile. In cities like Paris and Dubrovnik, STRs tend to complement hotel accommodations by primarily catering to couples, with over 48% of STR guests in Dubrovnik and 44% in Paris opting for properties ideal for two people.

In contrast, in leisure-focused destinations such as Mallorca and Lisbon, as well as culturally rich urban centers like Rome and Prague, demand leans more toward larger properties suitable for families and groups. This trend underscores the versatility of STRs and their ability to serve diverse travel experiences, from romantic getaways to multigenerational vacations.

The “Full Property Effect”: A Strong Preference for Entire Homes

A standout finding across all six destinations is the overwhelming preference for renting entire properties. Mabrian’s data shows that at least 80% of travellers choose full-unit rentals, a figure that rises to nearly 90% among American visitors in certain locations. This “Full Property Effect” illustrates why STRs remain especially popular among families, groups of friends, and the growing segment of remote workers who require dedicated living and working space.

STRs offer guests greater convenience, privacy, and flexibility compared to traditional hotels. Phocuswright data confirms this, indicating that travellers consider STRs superior in several critical areas: privacy (48%), value for money (47%), personalized or unique experiences (46%), and distinctive interior design (45%). These attributes make STRs highly competitive and desirable within the broader accommodation ecosystem.

Extending Tourism Beyond the Peak Season

Seasonality is another important dimension where STRs demonstrate their value. Mabrian’s seasonal data highlights that STRs help extend tourism activity into shoulder seasons, attracting travellers looking for longer stays, better rates, and more authentic, local experiences. This capability is increasingly vital for destinations aiming to reduce over-tourism during summer months and develop sustainable tourism models.

During peak seasons, STRs also play a crucial role in easing pressure on hotel capacity by offering additional lodging options. According to data from The Data Appeal Company – Almawave Group, average hotel room prices in cities like Paris, Rome, Lisbon, and Mallorca are at least 15% higher than comparable STR rates. When accommodating larger groups or families, STRs provide a more cost-effective and practical alternative, particularly when hotel prices surge during busy periods.

Addressing Challenges: Toward Smarter Regulation and Integration

While the benefits and evolving nature of the STR market are clear, the report also emphasizes ongoing challenges. Fragmented regulatory enforcement, inconsistent quality controls, and the persistence of unregulated “shadow” rentals pose risks to guest safety and public trust. These issues highlight the urgent need for smarter, more consistent regulatory frameworks that balance market growth with protection for travellers and local communities.

Effective integration of STRs into destination planning requires cooperation among regulators, industry players, and technology providers. Enhanced transparency, reliable data sharing, and standardized quality benchmarks will be key to fostering a sustainable STR ecosystem that benefits all stakeholders.

Italy, Croatia, France, Spain, Portugal, the Czech Republic, the US, and the UK are driving rapid growth in Europe’s short-term rental market. Changing traveller demands and innovative offerings are reshaping the industry and unlocking new opportunities.

Europe’s short-term rental market is no longer a niche or purely budget segment. It has matured into a multifaceted accommodation category that appeals to affluent professionals, older travellers, families, and groups alike. Its flexibility and unique attributes position it as a strategic asset for destinations seeking to diversify their tourism offerings and promote more balanced, sustainable visitation patterns.

To fully harness this potential, policymakers and industry leaders must embrace data-driven strategies and smarter regulations that support both innovation and responsible growth. The future of Europe’s STR market will depend on striking this balance—ensuring that it remains a vibrant and valuable part of the travel landscape for years to come.