The U.S. vacation rental market is entering 2026 cautiously on paper, but the data suggests operators are quietly pricing for a stronger finish.
According to the Q1 2026 U.S. Key Data Index, published by global short-term rental analytics company Key Data, early demand indicators remain soft, with on-the-books paid occupancy pacing 6 percent lower year over year in January and 5 percent lower in February. Despite this weak early outlook, pricing power is strengthening and forward-looking revenue indicators are stabilizing, signaling a market that has adapted to delayed booking behavior rather than being undermined by it.
Rather than chasing volume through early discounting, operators appear to be holding rates and pricing for demand to materialize later in the booking cycle.
Early Demand Remains Soft, But The Gap Narrows Closer to Arrival
Forward-looking data shows paid occupancy improving as arrival dates approach, narrowing to 3 percent below last year by March. This pattern reflects behavior seen throughout late 2025, when final pickup played a decisive role in monthly performance.
The trend reinforces a structural shift in how demand should be interpreted. Early pacing increasingly understates final outcomes, placing greater emphasis on real-time visibility and late-stage execution.
Pricing Confidence Supports Revenue Expectations
Despite softer forward occupancy, operators are maintaining pricing discipline. Average daily rate (ADR) is pacing 2 percent higher year over year in January, strengthening to 4 percent in both February and March, signaling confidence in late-stage demand rather than a rush to stimulate early bookings.
That discipline is already reflected in revenue pacing. Forward RevPAR is currently tracking 4 percent lower in January, stabilizes to flat in February, and turns slightly positive (+1 percent) by March, before most demand has materialized. The trajectory suggests operators are prioritizing margin protection over early volume-led growth.
Late Booking Behavior Reshapes Performance
Traveler behavior continues to support this shift. Booking windows remain compressed later in the quarter, pacing up to 3 percent–4 percent shorter year over year, while average length of stay is tracking 1 percent to 5 percent shorter across the quarter. Guests are still booking, but they are waiting longer and committing to shorter trips, making late-stage optimization increasingly critical.
As a result, performance is becoming less about where demand starts and more about how effectively it is captured as arrival dates near.
Regional Results Highlight an Execution-led Market
While national averages point to stabilization, regional performance remains uneven. Late 2025 results show standout performance in the Mid-Atlantic and New England, where RevPAR increased 18 percent year over year, supported by both occupancy gains and disciplined pricing.
Elsewhere, pricing carried performance. In the Western U.S. (Oregon, Alaska, California, Washington, and Nevada), RevPAR rose 8 percent despite flat occupancy, underscoring the growing importance of rate strategy and responsiveness in a cautious demand environment.
Marketplaces Benefit as Bookings Shift Later
Compressed booking windows are also reshaping distribution. In Q4 2025, Airbnb captured 54 percent of reservations and 45 percent of total revenue, continuing to gain share as travelers gravitated toward platforms offering speed, flexibility, and broad inventory when booking closer to arrival.
Direct bookings declined to 21 percent of reservations, though they still accounted for 28 percent of revenue, reflecting their higher value but increasing difficulty capturing last-minute demand without strong visibility and seamless conversion.
Melanie Brown, VP Data Analytics and Insights, said, “Early demand indicators look weak, but pricing tells a different story. Operators are no longer reacting to soft forward pacing by discounting early. They are pricing for late pickup and protecting rate integrity. In 2026, success will depend on understanding when demand actually materializes and acting decisively when it does.”
All data cited is sourced from Key Data’s Q1 2026 Report which tracks real-time performance across 1.2 million short-term rental properties in all 50 U.S. states. The Index includes anonymized reservation data from integrated property management systems, covering demand, revenue, pricing, and guest behavior trends.
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