This week’s roundup covers Skift’s optimistic short-term rental outlook, rising last-minute bookings, and a lawsuit against Airbnb in Los Angeles. Plus, Booking.com’s removal of illegal listings in Spain. Let’s dive in.
Skift’s State of Travel 2025 report predicts strong growth for short-term rentals, with bookings expected to surpass hotels in key markets. Social commerce is booming, with Skift Research estimating $7 billion in bookings originating from social media for hotels, airlines, and rentals. Other notable insights from the report include Airbnb maintaining dominance with 44% of the global vacation rental market as of 2024. However, increased regulation, including new licensing and occupancy caps in high-demand areas, could pose challenges to continued growth.
Ocean City’s new 3% short-term rental occupancy tax has sparked controversy. Airbnb argues the tax, which requires hosts to pay a levy on rental bookings, is illegal and unconstitutional. The platform claims the tax disproportionately targets short-term rentals, while excluding hotels and other lodging types. Local officials argue the tax will generate much-needed revenue for the city, though the dispute is expected to lead to legal challenges.
The Los Angeles city attorney’s office has filed a lawsuit against Airbnb, accusing the platform of allowing price gouging and unverified listings at more than 2,000 rentals following the January firestorm in Altadena and Pacific Palisades. The lawsuit claims some hosts inflated prices, taking advantage of displaced residents and emergency workers. Airbnb is also accused of permitting properties to be listed under fake identities, complicating efforts to provide safe housing. While Airbnb disputes the allegations, the case is expected to lead to further legal challenges.
AirDNA reports a significant rise in last-minute bookings in 2025. When looking at reservation lead times, booking behavior has clearly shifted. Travelers are increasingly waiting until the last minute to book. In August 2023, just 16% of U.S. reservations were made within five days of check-in. By January 2025, that share had nearly doubled to 31%, and sits at 24% in May. Experts speculate that travelers are catching on to pricing trends and waiting for property managers to lower prices to fill inventory, with economic uncertainty also driving more spontaneous bookings across all markets.
In continued news regarding Spain's court ruling against short-term rentals, previously reported on May 23, June 20, and July 18, Booking.com has removed 4,000 vacation rental listings in Spain to comply with new consumer protection laws. These listings violated one of three infractions: lack of required licences, failure to specify the legal status of landlords, or displaying incorrect licence numbers. Spain is intensifying its efforts against short-term rentals amid a housing crisis, with the government having already ordered Airbnb to remove over 65,000 illegal listings.
As regulatory changes, shifting booking trends, and legal challenges continue to shape the vacation rental industry, stay tuned for more updates. Check back next week for the latest news!