Best Airbnb Markets in 2026: Where Hosts Still Make Money
- Market selection determines 70% of your results. A great operator in a bad market still loses money.
- There are five types of markets that consistently win: Walkable Water, Supply Dry, Grammacore, Brickstory, and Hotel Hollow. Know which type you are entering before you sign anything.
- Target occupancy above 60% and RevPAN above $120 before investing in any market.
- Regulations killed cash flow in many major cities. Always verify local rules before signing anything.
- Emerging neighborhoods offer the best risk-adjusted opportunity in 2026. Less competition, friendlier regulations, lower entry costs.
- Multiple demand drivers reduce seasonality risk. Markets with tourism, business, and event demand outperform single-driver markets.
- You can research any market for free. Search Airbnb directly, filter by dates and guest count, read what is booked versus what is sitting. No paid tools required.
of your STR results come from market selection, before you buy a single piece of furniture
How to Evaluate Any Market
Most new hosts pick a market the wrong way. They look at a city they love to visit and assume other people love it too. That logic fails all the time. The right way to pick a market is with numbers, not feelings.
Four metrics tell you almost everything you need to know about a short-term rental market. Learn these four and you will be ahead of 90% of hosts before you ever sign a lease. But there is a fifth question that matters even more than any single number. I will get to that after the four.
Occupancy Rate
This tells you how many nights per month a listing is actually booked. A market with 65% occupancy means listings are booked about 20 nights per month. Below 55% and you are fighting for bookings. Above 70% and you have pricing power.
Learn to read occupancy data accurately at Airbnb Occupancy Rate: What the Number Actually Means.
Average Daily Rate (ADR)
The average price charged per booked night. High ADR with low occupancy is a trap. You want both. ADR without occupancy is just wishful thinking on your listing page.
RevPAN
Revenue Per Available Night. This is the single best number for comparing markets. It equals total revenue divided by total nights available, not just booked nights. A listing with $200 ADR at 50% occupancy has $100 RevPAN. A listing with $150 ADR at 80% occupancy has $120 RevPAN. The second listing wins.
Regulatory Status
The most important non-financial metric. A market can have great numbers today and be banned tomorrow. New York City is the cautionary tale. Excellent STR market for years. Then Local Law 18 in 2023 effectively ended short-term rentals in the city. Check current rules and the political direction of a city before you commit.
What Type of Market Is This?
The four metrics above tell you the numbers. This fifth question tells you WHY the numbers are what they are. After working with students across dozens of markets, I found that high-performing markets almost always fit one of five patterns. I call them Walkable Water, Supply Dry, Grammacore, Brickstory, and Hotel Hollow. Each one has a different reason guests show up. That reason determines what kind of property wins, what amenities matter, and what price the market will pay. Learn to spot which pattern your market fits before you start looking at listings.
I have watched people lose everything picking the wrong market. Not because they were bad hosts. Because they ignored the numbers and went with their gut.
How to Research Any Market Before Committing
- Search Airbnb directly for your target city. Filter by guest count, select entire place, and add dates to see what is already booked. Booked listings are invisible.
- Calculate RevPAN yourself: ADR multiplied by occupancy rate for a quick check
- Search city council minutes for any STR regulation discussions in the past 12 months
- Check the ratio of active listings to population. Over-supplied markets compress prices.
- Look for at least 2 demand drivers (tourism + events, or tourism + remote work)
- Run comparable listings at 70% of market ADR. If that math still works, the market is forgiving.
Sean's 5 Market Category Framework
After years of helping students find their first market and their fiftieth, I stopped describing markets by where they are. I started describing them by why they work. That shift changed everything. Five patterns kept showing up. Five types of markets kept outperforming everything else. Here they are.
Category 1: Walkable Water
The simplest category to understand. If guests can walk to the water, they will pay a premium. That is the entire thesis. It does not matter if the property is small. It does not matter if the furniture is basic. What matters is how close to the water you are and whether guests can see that in the photos.
I was just working with a student from Panama and we were looking at markets where she could invest. We found some super pretty, quaint, very inexpensive properties to get into. You can even arbitrage them, that is how inexpensive they can be. And the only requirement was that you show in your photos how close to the beach you are.
The geographic range for Walkable Water is enormous. South Florida is the obvious one: Miami, Fort Lauderdale, Pompano Beach. But most people do not realize there are gorgeous beaches all the way between Port St. Lucie and Miami. Jupiter, Singer Island, Lantana. These are not household names, but they are fully bookable. Then you have St. Petersburg, Naples, the entire Gulf Coast through Mobile Alabama and the Mississippi coast. The Carolinas coastline is deep with opportunity. San Diego fits this category too.
There are many properties near the water in South Florida. Yes. And in the most popular areas it might be tough to get close to the water. But what most people do not realize is there are gorgeous beaches all the way up and down the coastline that most hosts have never even considered.
The key insight here is that proximity is the product. The property does not have to be expensive. It has to be close. A one-bedroom apartment with a five-minute walk to the sand will outperform a three-bedroom mansion twenty minutes inland. Every time.
Category 2: Supply Dry
Supply Dry markets are the most forgiving in the entire short-term rental space. The concept is simple: demand has outrun supply. You do not have to be good to make money. The market does the work.
The best example right now is Jersey City and Hoboken. New York essentially banned Airbnb. Meaning anyone who wants to stay in an Airbnb near New York has to go across the water to Hoboken or Jersey City. And what I found with my students is that as long as you have five beds, it could be a studio apartment, a basement apartment with five beds, you will make $300 or $400 a night. The supply constraint does all the heavy lifting.
I have seen apartments in Jersey that looked like they were out of a horror movie. They made $400 a night. This market is not just for the little guy. It is for the inexperienced guy too. Supply-dry markets forgive operator mistakes that would destroy you anywhere else. Bad photos, basic furniture, slow response times. In most markets those will kill your bookings. In a supply-dry market, guests have no other option. They book anyway.
San Diego is a mixed example. It fits Category 1 (Walkable Water) and Category 2 (Supply Dry) at the same time. The city has restricted new STR permits in many zones, so the supply is capped. Meanwhile, demand keeps growing from tourism, conventions, and military families. That combination is powerful. If you are considering rental arbitrage in supply-dry markets, read the full rental arbitrage guide first.
Category 3: Grammacore
I named this one after a music vibe. Weird name. Bear with me. This is the category that changed how I think about the entire industry. Because it proves that the investment community has been wrong about what guests actually want.
After COVID, something happened in the STR investment space. A very Globo Gym vibe. More amenities, more, more, more. Pools. Hot tubs. Game rooms. Movie theaters. Basketball courts. Investors poured money into amenities because they assumed more stuff meant more bookings. But people do not necessarily want more. Some of the highest-performing properties I have ever seen have almost nothing.
Here is the story that made me name this category. In Dallas, near Rock Wall and White Rock Lake on the northeast side of the city, there are million-dollar houses going half empty. Overpriced and over-amenitized. But grandma's house on the lake is fully booked. And grandma does not have good photos. She does not have good furniture. She has grandma's furniture. But she has a picnic table in the yard and no pool. And that is exactly why she is booked.
The psychology is real. If you are my age or older, you remember playing in the mud, getting your knees dirty, and you want your kids to have those same memories. So you book the house without a pool on purpose. Because the pool would ruin it. The lake is the point. The kids catch frogs and skip rocks and fall asleep on the drive home. That is the product. Not the amenity list.
Grammacore markets are everywhere once you know what to look for. Rock Wall and White Rock Lake near Dallas. Conroe and the Woodlands near Houston. Lakes outside San Antonio and Austin. Wisconsin Dells. Edgerton, Wisconsin. These are family destinations where simplicity wins. And the affordability bonus is real. Some of these properties are inexpensive enough to buy outright. You are spending less and making more, because you understand what families actually want instead of what investors assume they want.
Category 4: Brickstory
Brickstory markets are historical industrial cities with charming old-world properties. Think red brick, exposed beams, cobblestone streets, and buildings that look like they have a story to tell. Philadelphia. Pittsburgh. Boston. Chicago. Cleveland. Columbus. Milwaukee. Houston.
What it means to live in a city is completely different from what it means to visit one. Locals want the new glass tower. Visitors want the building with a story. That gap is where Brickstory hosts make their money.
One of my students was talked into buying nine high-rise apartments in Cleveland. I said do not do that. There are too many. They look identical and they compete with hundreds of other identical units. I said let us look at what actually makes money here. In the middle of winter, we found a little red brick two-bedroom. Quaint. Charming. Fully booked at double the rate of every two-bedroom in the city. I have a student in Boston whose two-bedroom properties do about $500 a night. Because they are red brick.
The opportunity in Brickstory markets is that distressed old-world properties can often be arbitraged because locals pass on them. Nobody who lives in Cleveland wants to rent the charming old walkup when there is a modern high-rise two blocks away. But visitors from out of town see that same walkup and think it is beautiful. That mismatch creates lower competition, easier landlord negotiations, and higher nightly rates for anyone who understands what guests actually want from a city visit.
Category 5: Hotel Hollow (The Blitz Method)
Hotel Hollow is my favorite category in 2026 because the window is open right now and it will not stay open forever. These are neighborhoods where hotels cannot build yet because of what developers call the assemblage problem. To build a hotel, you need to buy an entire block of parcels, get zoning approval, secure financing, and wait three to five years for construction. In gentrifying neighborhoods, that process has barely started.
The examples are everywhere. Fishtown in Philadelphia. Kensington in Philadelphia. East Downtown Houston. Oak Cliff in Dallas. Neighborhoods in Atlanta and the Carolinas. You have multiple years to get into these neighborhoods before hotels can catch up. Prices are still cheap. Landlords are easier to work with. The neighborhood is coming to life with art, music, restaurants, and the kind of energy that makes guests want to stay.
The honest exit strategy for Hotel Hollow markets is built into the model. Short-term rentals is not real estate. It is hospitality. Sometimes you get into a neighborhood, it makes money for a few years, and then it changes. If the margins drop, you either ride it out or you pack up and move the furniture somewhere else where it will make money. That mobility is not a weakness. It is the whole strategy.
Read the full guide to rental arbitrage to understand how to enter these markets without buying.
Top 20 Airbnb Markets: Data Table
The table below reflects direct Airbnb search data and industry research for Q4 2025 through Q1 2026. These numbers represent median performance for entire-home listings. Individual results vary based on property quality, listing optimization, and pricing strategy.
| # | Market | Occupancy | Avg Night | RevPAN | Regulation Risk |
|---|---|---|---|---|---|
| 1 | Gatlinburg, TN | 72% | $245 | $176 | Low |
| 2 | Destin, FL | 68% | $310 | $211 | Low |
| 3 | Scottsdale, AZ | 64% | $285 | $182 | Low |
| 4 | Nashville, TN | 62% | $240 | $149 | Medium |
| 5 | Asheville, NC | 66% | $220 | $145 | Medium |
| 6 | Sedona, AZ | 70% | $260 | $182 | Low |
| 7 | Panama City Beach, FL | 65% | $290 | $189 | Low |
| 8 | Myrtle Beach, SC | 61% | $210 | $128 | Low |
| 9 | Colorado Springs, CO | 59% | $185 | $109 | Low |
| 10 | Savannah, GA | 63% | $195 | $123 | Low |
| 11 | Gulf Shores, AL | 64% | $255 | $163 | Low |
| 12 | Breckenridge, CO | 67% | $350 | $235 | Medium |
| 13 | Joshua Tree, CA | 65% | $280 | $182 | Medium |
| 14 | Charleston, SC | 60% | $225 | $135 | Medium |
| 15 | Austin, TX | 57% | $215 | $123 | Medium |
| 16 | Chattanooga, TN | 61% | $175 | $107 | Low |
| 17 | Branson, MO | 63% | $165 | $104 | Low |
| 18 | Flagstaff, AZ | 60% | $190 | $114 | Low |
| 19 | St. Augustine, FL | 62% | $200 | $124 | Low |
| 20 | Lake Tahoe, CA/NV | 58% | $340 | $197 | Medium |
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Coastal Markets
Coastal STR markets have two advantages: high nightly rates driven by scarcity and strong seasonal demand from families, couples, and spring break crowds. The risk is seasonality. A beach market can produce 80% of its revenue in four months. You need cash reserves to cover the slow periods.
Destin, Florida
Destin sits at the top of the coastal tier with a $211 RevPAN. The Emerald Coast draws millions of visitors each year. White sand and turquoise water drive premium pricing. Occupancy stays above 65% even in shoulder season because of sports tournaments and fishing events. Florida is generally STR-friendly, though individual counties have their own rules.
Panama City Beach, Florida
Similar to Destin but with more mid-market inventory. RevPAN of $189 is strong. Spring break demand is massive. A properly priced property during those two weeks can cover multiple months of rent. This market rewards aggressive seasonal pricing more than almost any other.
Myrtle Beach, South Carolina
High volume, more competition, lower ADR. RevPAN of $128 is acceptable for lower-entry-cost properties. The market is thick with inventory so listing optimization matters more here than in supply-constrained markets. Average photos and average copy will get buried.
In seasonal beach markets, price aggressively during peak weeks. Do not leave peak demand money on the table to maintain consistent pricing. A single July 4th weekend priced correctly can be worth $2,000–$4,000 more than default pricing.
Lake and Nature Markets
Mountain and lake markets fit what I call the Grammacore pattern. Guests want outdoor experience, not amenities. The markets below have proven this consistently. They have two full seasons (summer hiking and winter skiing) which compresses the slow period. Gatlinburg leads this category but several others are worth serious attention.
Gatlinburg and Pigeon Forge, Tennessee
This is the most searched mountain STR market for a reason. Gatlinburg has 72% occupancy and $245 average nightly rate, producing a $176 RevPAN. The Smoky Mountains are the most visited national park in the country. Demand never really goes away. Fall leaf season and Christmas alone drive premium pricing for 10+ weeks per year.
Breckenridge, Colorado
The highest RevPAN in the mountain category at $235. Ski season drives enormous pricing power December through March. Summer outdoor recreation keeps occupancy solid through August. The risk is increasing local STR regulation in Summit County. Check licensing requirements and any cap on STR permits before committing here.
Sedona, Arizona
Sedona is unique among mountain markets because it has almost no winter slowdown. Red rock tourism is year-round. Spiritual retreats, hiking, wedding tourism, and the New Age market create demand in every season. RevPAN of $182 on a 70% occupancy rate is excellent. Lower entry cost than Colorado mountain markets with comparable performance.
Gatlinburg is where I send students who want a market that is almost impossible to fail in, if you price it right and keep the property clean.
Mountain Market Checklist
- Verify STR permit availability before signing any lease or purchase contract
- Check HOA rules. Many mountain condo complexes have banned STRs.
- Look at December through January and June through August separately to understand both peak seasons
- Calculate break-even using only 45% occupancy to stress-test the market
- Find the 3 top-performing comps and study their pricing calendars
Urban Markets
Urban markets are tricky in 2026. The cities with the best demand (New York, San Francisco, Los Angeles, Chicago) have either banned or severely restricted STRs. The urban markets that remain workable tend to be mid-size cities with strong event and convention demand.
Nashville, Tennessee
Nashville remains one of the best urban STR markets because of relentless bachelorette party demand, concert tourism, and a growing convention scene. RevPAN of $149 is solid for an urban market. The city has been tightening STR rules, so a permit is required and some zones are restricted. Always verify your specific address against the zoning map.
Savannah, Georgia
Savannah is underrated. Historic district tourism, college graduation events, and strong local festivals drive solid demand. A $123 RevPAN with low regulatory risk and lower entry costs than most urban markets makes Savannah a strong value play.
Charleston, South Carolina
Charleston has strong demand from food tourism, history tourism, and weddings. RevPAN of $135 is decent. The city requires an STR license and has been moving toward stricter enforcement. Regulation trajectory here is worth watching closely.
Never invest in an urban STR market without reading the actual city ordinance yourself. Do not rely on what a landlord or real estate agent tells you about the rules. Regulations change fast and the risk of getting your license revoked, or never getting one, is real.
Emerging Neighborhoods: The Hotel Hollow Opportunity
These are my favorite markets right now. They fit the Hotel Hollow pattern: demand is rising faster than hotels can build, prices are still accessible, and the regulatory environment is investor-friendly. The best risk-adjusted opportunities in 2026 are in markets most people are not paying attention to yet. Less competition, more landlord willingness to negotiate, and friendly regulations define this category.
Chattanooga, Tennessee
Chattanooga is 90 minutes from Atlanta and 2 hours from Nashville. Outdoor adventure tourism (rock climbing, river activities, mountain biking) is growing fast. The city is STR-friendly and inventory is still manageable. A RevPAN of $107 is lower than top markets but entry costs are significantly lower, so cash-on-cash returns can actually be higher.
Branson, Missouri
Branson is a deeply established entertainment and family tourism market. RevPAN of $104 is lower but consistently delivered. Low competition, low entry costs, and strong repeat visitor demand from midwest families. Not glamorous, but reliable.
St. Augustine, Florida
Oldest city in the United States. History tourism, beach access, and a growing arts scene create multi-driver demand. RevPAN of $124 at a lower price point than Destin or Panama City Beach. A market worth serious analysis if you want Florida exposure without top-tier prices.
Red Flags to Avoid
Knowing where to invest is only half the equation. Knowing where to avoid saves you from expensive mistakes.
Markets With Pending STR Bans
If city council is actively debating STR restrictions, stay out. You cannot out-earn regulatory risk. The cost of unwinding a lease in a banned market is brutal.
Over-Supplied Seasonal Markets
Some markets have too many listings chasing too few guests. When supply grows faster than demand, ADR falls and occupancy falls at the same time. You can see this pattern by searching Airbnb directly. If there are hundreds of listings available for next weekend in a market you expected to be busy, supply has already outpaced demand.
Single-Driver Demand Markets
A market that only has demand for one event type, say one major annual festival, is fragile. Festival gets cancelled, market collapses. Look for at least two independent demand drivers.
Markets Where You Cannot Compete
If the top-performing listings in a market have professionally designed interiors, studio photography, and thousands of reviews, a generic listing will get buried. Make sure you can match or beat the top comp quality before entering a competitive market.
Before entering any market, read how to spot and avoid saturated STR markets.
How to Research Any Market for Free
Reading a market is a skill. And the best source of market data is Airbnb itself. It is free, it is real-time, and it reflects how the algorithm actually works today. You do not need expensive subscriptions to understand whether a market will make you money.
Third-party tools estimate bookings by watching calendar changes. When a host blocks a date for any reason, a tool can count that as a booking. It is not. The only way to see real demand is to look at what Airbnb shows you when guests search.
Here is what I do. I search Airbnb for my target city, filter by Entire Place and Instant Book, and look at the total listings available without dates. Then I add dates for an upcoming weekend and watch how many disappear. The ones that disappear are booked. That tells me how much real demand the market has right now.
How to Research a Market Directly on Airbnb
- Search Airbnb for your target city. Filter for Entire Place and Instant Book. Note the total listing count without dates.
- Add an upcoming weekend. Count how many listings remain. Subtract from the no-date count. That gap is real demand.
- Change the guest count from 2 to 4, then 5, then 6. Watch how fast the supply drops. A big drop at 5 or 6 guests means an underserved guest tier.
- Look at page 1 and page 2 of results. Study the top 5 listings by review count. What amenities do they share? What photos do they use? That is your comp study.
- Search city council meeting records for "short-term rental" in the past 12 months. This is how you catch regulation before it moves.
- Calculate RevPAN yourself. Take ADR and multiply by occupancy rate. Compare markets on this single number.
For a deeper look at how to spot oversupply before it hurts you, read the market saturation guide. For pricing once you have picked a market, the pricing strategy guide covers the full system.
How BIG DATA Trains Your Eye
Reading market data is a skill. Most people look at Airbnb search results and see listings. A trained analyst sees a story: where demand is growing, where supply is saturating, where pricing power is shifting, and where the next opportunity is forming before the crowd notices.
The RE:Algorithm course covers how to pull market data from Airbnb directly, how to interpret seasonal curves, how to identify markets before they peak, and how to set prices that beat your comp set every single month.
Over 5,000 students have gone through this training. The ones who apply the market analysis framework consistently outperform their local market benchmarks. That gap comes from information, not luck, not better furniture, not a nicer neighborhood. Information.
Master Market Selection With BIG DATA
The RE:Algorithm course covers how to pull market data from Airbnb directly, how to read seasonal curves, how to identify markets before they peak, and how to set prices that beat your comp set every month. Over 5,000 students have used it to find their winning market.
Explore RE:AlgorithmCommon Questions
What are the best Airbnb markets in 2026?
Top markets include Gatlinburg TN, Destin FL, Scottsdale AZ, Sedona AZ, and Breckenridge CO based on occupancy, nightly rate, and RevPAN data. These markets consistently fit one or more of the five winning categories: Walkable Water, Supply Dry, Grammacore, Brickstory, and Hotel Hollow. Emerging markets like Chattanooga TN and St. Augustine FL offer strong risk-adjusted returns with lower entry costs.
What is RevPAN and why does it matter?
RevPAN is Revenue Per Available Night. It divides total revenue by total calendar nights, not just booked nights. It is the best single number for comparing market performance because it accounts for both rate and occupancy together.
What are the five market types Sean uses to evaluate cities?
The five types are Walkable Water (proximity to water drives bookings), Supply Dry (demand has outpaced available listings), Grammacore (simple lake or nature access beats over-amenitized competition), Brickstory (historic charm in industrial cities outperforms modern glass towers), and Hotel Hollow (gentrifying neighborhoods where hotels cannot build yet). Each type has a different reason guests show up and a different strategy to win.
Are urban Airbnb markets worth it in 2026?
Most major urban markets have been restricted by local regulations. Mid-size cities with event demand (Nashville, Savannah, Charleston) still work but require permit verification. Avoid any city with pending STR legislation.
How do I research a market without paid tools?
Search Airbnb directly. Look at total listings without dates. Add weekend dates and count what disappears. The listings that disappear are booked. That is real demand. Study page 1 of results for any market before committing. What the top listings share is your blueprint.
Sources & Further Reading
Research & Industry Data
- Airbnb Newsroom: Host and Guest Data
- Phocuswire: Short-Term Rental Industry Research
- PriceLabs Market Dashboards and Revenue Data
