The vacation rental industry stands at a pivotal moment. After the unprecedented post-COVID surge, the market has entered a period of recalibration — one that demands strategic thinking, technological innovation, and a clear-eyed view of both opportunities and challenges ahead.

At GuestyVal 2025, Humberto Pacheco, Airbnb’s Director of Homes Supply for Americas and Luxe, shared insights from a unique vantage point. Having co-founded and run property management company Naya Homes in Mexico before joining Airbnb just months ago, Pacheco brings a fresh perspective on the industry’s evolution from both sides of the marketplace.

His experience as a PMC operator included selecting Guesty as his property management platform (specifically for its status as an Airbnb Preferred Plus Partner), seamless connectivity, and robust revenue tools.

The generational shift in hospitality

The vacation rental sector is experiencing more than a business cycle. It’s witnessing a fundamental shift in how people think about travel accommodation.

“All the young people, they’re growing up with Airbnb. They’re growing up with alternative accommodations, with vacation rentals, with short term rentals. And so as I look at the future, this is the area we have to be building in,” Pacheco said.

This generational transformation means the industry isn’t just competing with hotels anymore. In fact, it’s becoming the default choice for an entire generation of travelers. For professional hosts and property managers, this represents both validation of the business model and a call to continue raising standards.

Navigating the post-pandemic landscape

The comparison to 2021’s peak performance remains top of mind for many in the industry, but understanding the cyclical nature of the hospitality business is crucial for sustainable success. The market has matured, and with that maturity comes the need for operational excellence and differentiation.

Technology adoption has emerged as a critical factor in this new landscape. From listing optimization to customer support to owner communications, AI and automation tools are creating opportunities to improve efficiency across every aspect of property management. The hosts who succeed in this environment will be those who embrace these tools strategically.

Major opportunities on the horizon

Event-driven demand

Large-scale events represent significant opportunities for professional hosts. Airbnb’s recent partnership with FIFA for the upcoming World Cup exemplifies this potential. With matches scheduled across Mexico, the United States, and Canada, the impact will extend far beyond host cities.

The soccer World Cup will touch markets from Mexico City, Guadalajara, and Monterrey to major U.S. and Canadian cities. But the opportunity applies to vacation markets as well — travelers attending matches may extend their trips to destinations like Cabo, Puerto Vallarta, or Cancun, creating what Pacheco described as a “halo effect” for vacation rental markets.

Beyond mega-events like the World Cup, hosts should keep track of of all significant events in their regions. From Bad Bunny residencies in Puerto Rico to Taylor Swift concerts filling cities across North America, event-driven demand can transform occupancy rates and revenue.

Emerging market segments

Airbnb is targeting significant untapped demand in established markets. U.S. Hispanic travelers represent a massive segment that’s being prioritized with dedicated marketing efforts. Similarly, America’s heartland states — often overlooked in favor of coastal markets — present opportunities for both guest acquisition and new supply development.

Internationally, markets like Brazil, Mexico, and Puerto Rico are getting attention as non-core markets with substantial growth potential. For property managers operating in or considering expansion to these regions, alignment with Airbnb’s growth initiatives could create favorable conditions for business development.

The regulatory challenge

Perhaps no issue affects the industry more universally than regulation. With housing affordability dominating political discourse in cities worldwide, short-term rentals have become an easy target for policymakers seeking solutions. Pacheco said that while housing is a massive global and political issue, Airbnb is very focused on deregulation and supporting regulated markets.

The economic impact of the vacation rental industry is substantial. In the United States alone, Airbnb generated $90 billion in economic activity last year, with guests contributing over $24 billion in tax revenue. But the impact extends beyond these headline numbers. Every reservation generates revenue for restaurants, cleaning services, and numerous other businesses, supporting blue-collar employment across communities.

When major cities pass restrictive regulations, they often fail to account for the full economic cost. The loss can exceed $2 billion in total revenue, with the majority coming not from nightly rates but from the broader economic activity that reservations generate.

For professional hosts facing regulatory challenges, the message is clear: unified advocacy matters. Whether managing three properties or three thousand, regulatory outcomes affect all stakeholders in the ecosystem.

Quality as a growth driver

In a maturing market, quality differentiation becomes increasingly important. Guest experience — from seamless check-in to pristine cleanliness to responsive communication — drives the trust necessary for continued industry growth and market share gains from traditional accommodations.

“If a guest arrives and the check-in is seamless, they find the bed well made, the linens in good shape, they don’t find hairs in the bathroom… And the communication with the host is good, this is truly how we drive growth from the hotel sector,” Pacheco said.

Airbnb’s Guest Favorites program recognizes properties with ratings of 4.9 stars or above, with strong performance across key metrics including cleanliness, host communication, check-in, and listing accuracy. These properties receive preferential visibility and booking rates compared to non-designated units.

For property managers, tools like Guesty’s quality dashboard provide visibility into specific areas requiring improvement, enabling targeted interventions to elevate performance across portfolios.

The product development evolution

Airbnb is shifting its product development approach, maintaining two major annual rollout periods in May and late in the year while also iterating more rapidly throughout the year. This “startup mentality” of faster testing and deployment aims to deliver tools that help hosts improve revenue, quality, and operational efficiency more quickly.

AI integration is becoming fundamental across multiple areas: customer support optimization, listing enhancement, and revenue management. But the technology’s impact extends beyond what platforms provide. Property managers should evaluate how AI can reduce operating costs, accelerate acquisition processes, and improve owner relations within their own operations.

Looking ahead

The vacation rental industry is not approaching maturity. According to Pacheco, it’s still in its early stages. Despite the presence of operators with 25+ years of experience, the sector has decades of growth runway ahead as generational preferences cement alternative accommodations as the primary choice for travel.

For professional hosts, success in this environment requires embracing technology, maintaining relentless focus on quality, staying attuned to event opportunities, and participating in regulatory advocacy. The hosts who view themselves as partners with platforms in building the industry’s future (rather than simply suppliers) will be best positioned for the decades of growth ahead.

The next phase of the vacation rental industry won’t be defined by rapid, unsustainable expansion. It will be built on operational excellence, technological sophistication, and the ability to deliver consistent, high-quality experiences that justify the sector’s continued growth and earn the loyalty of a new generation of travelers.

Watch the full session here.

A B2B marketing professional with deep familiarity in the short-term rental industry, translating complex ideas into clear, engaging content. Writes blogs, web copy, and industry reports that inform and inspire. Uncompromising on the Oxford comma.