Hi, I’m Jannik Abraham, Managing Director of Smoobu. Over the last four years, I’ve watched the short-term rental industry evolve at a breakneck pace. But with rapid growth comes a lot of noise. I’m sharing my perspective, because the industry is currently crowded with misconceptions, and too many people are focusing on the wrong priorities. I hope this article can prove helpful, happy reading! -- Jannik

Part 1 - Managing Guest Behavior

There is a lot of noise in the vacation rental industry right now. It’s incredibly easy for short-term rental hosts to feel a bit overwhelmed by everything hitting them at once:

• Global economic shifts: Tightening consumer wallets and unpredictable market trends.
• Changing guest behaviors: Shorter booking windows and shifting travel habits.
• The non-stop talk about technology: The constant pressure to adapt to AI and new tool stacks.

But if you look at the actual data, our industry is proving to be weirdly resilient. Why?

To sum it up very straightforwardly: People always travel. Even when economies tighten, travel is often the very last piece of consumer spending people are willing to cut (Bronner & de Hoog, 2016; Nemec Rudež, H., 2018; Boto-García & Baños Pino, 2023). 

However, there’s a distinct catch for 2026:
When guests have less disposable income but choose to spend it on a trip anyway, their relative expectations to experience the perfect stay, skyrocket. Instead of just a solid property, they’re looking for an experience aligned with their vision.

If you want to succeed this year, you need a little bit of tough love. You need to stop chasing the latest shiny tools and start mastering the foundations.

Here is my take on the state of short-term rentals in 2026, backed by data from Smoobu's latest study of 500 top-performing hosts across our core markets:

1. What your guests perceive is what they willingly pay for. Just mind the expectation gap.

Back in my undergrad days, the very first thing my economics professor told our class was a phrase that stuck with me:

“Perception is reality.”

This exact rule dictates how you should price and market your vacation rental. Guests are perfectly happy to book any tier of accommodation:

• A budget apartment
• A mid-range flat
• An expensive luxury villa

The price tag doesn't actually matter, as long as the perceived value matches what guests experience when they walk through the door. Expectation is the root of all heartache. If the online presentation and real-world reality mismatch, it’s incredibly hard to recover.

Data from Smoobu Insights show smaller independent hosts outperforming larger property managers on review scores: 

• ⭐ An average rating of 4.79 on Airbnb.
• 🔑 An average rating of 8.8 on Booking.com.

These top-tier hosts operate on smaller portfolios, averaging just 2.5 units. That doesn’t mean that every small portfolio will automatically outperform bigger ones. There is a reason that the independent host often outperforms the large scale operations:

Because they're small and personally involved, they have a natural advantage in keeping the "expectation gap" tightly closed. For example, they might have the time to write that handwritten note (side note: I LOVE a handwritten note, if you can do it, do it!) 

Scaling your business doesn’t inherently mean sacrificing your ratings. Rather, it highlights the core operational challenge for growing brands.What tends to happen with large operators is:

• They over-optimize listings: They pull out every digital trick to drive raw booking conversions.
• They skyrocket expectations: The online presentation promises perfection.
• They fail to deliver at scale: They miss the personal touch or on-site execution needed to match the hype.

Scaling successfully means building systems that protect the human touch,  ensuring your growing portfolio never feels mass-produced because for the guest, it isn’t. When digital marketing or a copy-paste approach outpace the human touch, the expectation gap widens, and star ratings begin to drift downward. 

2. How to Give Your Property a "Soul"

To close that expectation gap, your property needs what I call a "soul". Don’t get me wrong, this doesn't mean spending €20,000 on designer furniture or being there in person for every single stay.

It simply means getting tactical about the small things that show you actually thought about the human being staying in your home.

For a scaling business, it is incredibly easy to lose sight of this. When you are growing fast, it’s much faster to just throw basic, clean furniture into an apartment, drop a couple of random forks in the drawer, and call it a day. But you have to consciously avoid that trap:

The Reality of Scaling: Even if you grow to have 100 listings and a single property is only 1/100th of your portfolio, for the guest staying there, it is still the one spot they chose for their stay. That individual property needs to land.

Let’s get hyper-practical about where you should focus your attention to make that happen:

• Frickin’ sharp knives: You wouldn’t believe how many rentals I’ve stayed in where you can't even cut a tomato. It drives guests crazy. Put tools in place that show the stay is genuinely functional.
• Targeted utility spaces: Modern travelers demand real utility. Over 60% of top listings now explicitly feature a dedicated workspace, understand the actual amenities needed for your primary target groups and add practical value.
• Clean, intended essentials: Provide salt, pepper, a little fresh cooking oil, and refillable bathroom amenities. Please, get rid of that greasy, half-used bottle of oil left over from a guest three months ago. Make it clear these items are clean and intended to be there and ensure that the cleaning team refills these essentials regularly.
• Vibe shots over clinical wide angles: When hiring a photographer, don't just capture empty, cold rooms. Set the dinner table, show a cup of coffee on the balcony facing the morning sun, and let the guest visually live the experience before they even click "book".
• Last, and most importantly: Stay in your apartment and test it! Above everything, know what it’s like to actually live in that space. Understand where the sunlight falls, what corners of the room you gravitate towards for working, reading, and so on. 

If your operational costs have risen due to inflation or surging energy prices, you cannot simply hike your rates. If you need to charge more money, make sure to match the value to the expectation.

3. Shorter booking windows don’t mean more stress, IF you adapt the following things.

When speaking with hosts lately, there’s one operational shift everyone seems to hate: the shortening of the booking window.

Our internal data highlights that a massive 41% of Smoobu bookings are now happening last-minute, within less than 14 days of arrival. Global industry reports from AirDNA and Lighthouse mirror this trend, placing the baseline of last-minute bookings well over 30% across the board.

As business owners, we all crave planability. We would all rather have guaranteed baseline revenue for the next year than gamble on a 20% upside filled with constant uncertainty.

But here is the uncomfortable truth: you cannot change guest behavior. You have to accept it, adapt to it, and prepare your business for it.

In 2026, it looks like this:

• Optimize operations for speed: Ensure your cleaners, automated messaging, and smart locks can seamlessly handle short-notice, same-day check-ins without causing a logistics nightmare.
• Leverage intelligent tools to force consistency: Fight unpredictable seasonal dips with automated pricing systems. Our data shows that switching to Dynamic Pricing directly boosts your occupancy rate by about 14%. Over a six-month period, that added up to 28 extra bookings compared to the rest of the market.
  • German hosts who turned on Dynamic Pricing made an average of +€4,959 (+59%) more net revenue per apartment over six months than those who didn't.

Choose your strategy consciously, set up the system, and stop stressing over last-minute notifications. Dynamic Pricing tools are built to capture that exact crowd. If you’d like to read more about how it works, here you go.

I think that’s enough to digest for the moment but keep your eyes peeled (and make sure you’re following) for Part 2 where we get into AI, OTAs and strong foundations.

Part 2 - Utilizing Technology Correctly

If you made it through Part 1, you already know the foundation: close the expectation gap, adapt to shorter booking windows, and stop chasing tools you don't need yet.

Part 2 is where we're talking about the three topics every host has an opinion on but few have a clear strategy for: AI, OTAs, and the fundamentals that separate the hosts who survive market shifts from the ones who don't. Let's get into it.

4. Use AI to master your day-to-day operations. Don’t overthink how it changes guest behavior.

Every industry panel right now is dominated by AI, but the conversation is focused on the wrong things. 

My distinct opinion on this: I think people completely overestimate how AI is changing guest behavior (at least short-term), and massively underestimate what it can do for your day-to-day operations (right now).

We are still a long way off from autonomous AI agents booking vacations from scratch. If you look at the reality of the global market, the way guests find and experience properties hasn't fundamentally changed:

• Offline Booking Power: “Across the globe, roughly 30% of all travel is still booked completely offline (Statista).” People are literally still making phone calls, driving through towns, or shooting direct emails to a person they already know.
• The Physical Essence: At the end of the day, an AI agent cannot sleep in a vacation rental for me, and it certainly can't clean the physical apartment. The essence of our industry, going somewhere and spending the night in a unique property, is 100% going to stay the same.

However, the younger demographic is shifting where they look for initial travel inspiration. Gen Z travels based on visual social validation: 17% use TikTok as their primary destination discovery engine, and 27% prioritize Instagram. 

“50% of travelers intend to use AI tools when planning their trips (Booking.com). At the same time, 25% report receiving outdated or inaccurate AI information, highlighting the importance of reliable and structured content. (Amadeus)”

Where tech and AI are massive wins for our industry is removing technical back-end friction.

Previously, if you wanted to run a professional business, you had to manually learn complex software, click around through guidebooks, and spend weeks trying to configure a direct booking website. AI changes that by allowing you to use semantic language to make tech work for you:

• Natural Language Control: Instead of clicking through endless setup manuals, you can literally talk or type to your tools in plain language.
• Instant Adjustments: You can simply ask the technology to change your pictures, rewrite a description to sound more welcoming, or adjust a website layout to look cleaner 

This ease of use across the board removes massive operational headaches, gives you more free time, and lets you focus on the hospitality angle.

Please, do not waste your limited time and resources over-engineering your business for hyper-niche tech funnels, like trying to get press releases written just to show up in a generative AI search query. 

Is investing in that super tiny part of the funnel where you should be spending your energy as a business owner? Probably not. Stick to foundational optimization, keep your operations smooth, and keep your tech stack simple.

5. Let big OTAs find the guests, then turn them into yours. Be proactive in relationship building. 

There is a constant battle in the short-term rental community: OTAs (Online Travel Agencies) versus Direct Bookings. Many hosts talk about platforms like Airbnb or Booking.com as if they are the ultimate industry villain.

With my finance background, I look at this purely as a distribution and marketing play. Do not put all your eggs in one basket. Treat OTAs exactly for what they are: a powerful discovery engine.

• Maximize market reach: An overwhelming 97.6% of Smoobu's top-performing hosts don't choose between platforms, they actively list on both Airbnb, Booking.com and other OTAs like HomeToGo Marketplace simultaneously to maximize their market reach.
• Leverage global ad spend: These platforms spend billions of dollars every year to get global eyeballs on your property. Use them! Pay the commission as a necessary marketing cost to get a guest through the door the first time.

But once that guest is inside your property, you must take charge of the relationship. Don't just let them leave and forget you.

Our top-performing segment currently secures a healthy 9.8% of their total reservation volume entirely through commission-free direct bookings. They achieve this with simple tactics:

• Personalized Touchpoints: For example, put a beautifully printed welcome template on the counter with their name on it, signed by you. Anything physical that shows they’re being genuinely welcomed at your stay. 
• Seamless Off-Platform Links: Include an automated message sequence or place a direct, shareable QR code in your digital Guest Guide or checkout templates that says: “We loved having you. Next time you or your family want to come back, book directly through our site for 10% off.”

If a guest has an incredible stay, they might share that direct link with their family group chat or friend circles. Suddenly, you have 50 new targeted eyeballs on your direct booking site completely for free.

Use the major platforms for initial discovery, and use great hospitality to turn those guests into your personal brand ambassadors.

6. The golden rule is always: don't overcomplicate it.
A sturdy house is built on strong foundations. 

If you are a host balancing a full-time job or just starting out, remember this simple rule: get the boring stuff right first. Do not lose yourself trying to design the absolute perfect website or choosing the most advanced amenities if your baseline systems are broken.

• Sync your calendars: Ensure your calendars are synced via a dedicated channel manager across platforms so you never face a double booking.
• Automate your communications: Automate your routine guest messaging so you can maintain a flawless response rate without losing your weekends to manual tasks.

Prioritize effectiveness over efficiency. Get a basic, working version of your business out into the world, see what works, and optimize iteratively along the way.

Your business doesn't need to be fancy or expensive to be highly profitable, it just needs an honest, rock-solid value-for-money ratio.

Now it’s over to you. How are you adapting your operations to handle the shifting booking windows or guest expectations this year? Let's talk about it in the comments below! 👇

And if you’re keen to continue learning about the state of the industry…

Watch our full “State of Short Term Rentals”-Episode on YouTube here.

Download Smoobu Insights: How Hosts Will Win: Quality, Value, and Professionalization here.