For years, buying a property and tossing it on Airbnb looked like printing money. Book a few weekends a month, cover the mortgage, pocket the rest. Simple. But in 2025, the math has stopped working for thousands of amateur hoteliers who bet big on short-term rentals.

National occupancy rates have fallen from 57% last year to 50% this spring.[1] That seven-point drop translates to roughly 25 empty nights per year. Meanwhile, supply keeps climbing. The number of Airbnb listings in the U.S. hit 1.38 million in September, up 23% from the year before.[2]

Dallas added more than 6,000 new listings since 2020. Phoenix and Austin saw their Airbnb inventory surge 500% over seven years.[3] In 31 of the top 50 U.S. rental markets, occupancy is now declining.[2] What looked like a can't-lose investment has turned into a scramble for bookings.

Too many hosts chased the same guests. Cities that once had a few dozen Airbnbs now have thousands. Scottsdale, Cape Coral, and Nashville are drowning in listings. Travelers still book trips, but there aren't enough of them to fill every property.

Hosts responded. They cut prices, and added amenities like hot tubs, fire pits, and game rooms, trying to stand out. The properties that still do well are either dirt-cheap alternatives to motels or Instagram-perfect. Everything in between sits empty.

Who's Winning:

Who's Losing Out:

The gap between winners and losers keeps widening.

Just as supply peaked, cities started cracking down. New York effectively banned most short-term rentals in 2023, requiring hosts to be present during stays and limiting guests to two.[4] Airbnb listings in the city collapsed. Barcelona plans to ban short-term rentals entirely by 2028.[5] Athens froze new licenses in central districts.[6] New Orleans is one lawsuit away from a total ban.[7]

Even cities that haven't banned Airbnbs are making life harder. Registration requirements, occupancy taxes, safety inspections, night limits. Boston only allows owner-occupied units. San Francisco caps rentals at 90 days per year for non-primary residences.[8] Each new rule chips away at profits.

For investors who bought specifically to run Airbnbs, these regulations are existential. You can't easily sell a property marketed as a "turnkey Airbnb" when Airbnb is suddenly illegal. ■

Are you looking to buy, build, or invest in real estate? Join Real Estate Investing Intelligence for exclusive intelligence you won’t find anywhere else.

[1] Mashvisor. (2025, April 22). Airbnb occupancy rate: What it is & what to expect in 2025. https://www.mashvisor.com/blog/airbnb-occupancy-rate/

[2] iGMS. (2025, April 15). Navigating the Airbnb bust: A comprehensive guide. https://www.igms.com/airbnb-bust/

[3] iGMS. (2025, April 15). Navigating the Airbnb bust: A comprehensive guide. https://www.igms.com/airbnb-bust/

[4] Steadily. (2025, May 23). Airbnb & short term rental laws and regulations in New York - 2025. https://www.steadily.com/blog/airbnb-short-term-rental-laws-regulations-new-york

[5] Bloomberg. (2024, July 9). Airbnb (ABNB), Vrbo (EXPE): Why cities are cracking down on short-term rentals. https://www.bloomberg.com/news/articles/2024-07-09/airbnb-abnb-vrbo-expe-why-cities-are-cracking-down-on-short-term-rentals

[6] Hosthub. (2025, March 13). Short-term rental restrictions: Top 50 destination cities around the world. https://www.hosthub.com/research-data/airbnb-restrictions-around-the-world/

[7] WWNO. (2025, February 25). Explaining New Orleans' short-term rental saga. https://www.wwno.org/local-regional-news/2025-02-25/explaining-new-orleans-short-term-rental-saga

[8] Host Tools. (2024, May 18). What cities have banned Airbnb? https://hosttools.com/blog/short-term-rental-tips/what-cities-have-banned-airbnb/■