The number circulating in every STR Facebook group right now is 138%. That's the average premium short-term rentals earned over long-term rentals nationally in 2025, according to AirDNA. And it's real — I'm not here to debunk it.
I'm here to tell you it's the wrong number to chase.
The operators who make this business work long-term don't start with "where can I get 138%?" They start with a completely different question. And the difference between those two starting points is the difference between building a business and building yourself another job.
Quick Answer: The 138% STR premium is real, but chasing it market-first is how operators end up with a job they hate instead of a business they love. The framework that actually builds wealth starts with WHO you want to serve — not where the data shows the highest premium. Start with the experience, then find the geography.
What the 138% Number Doesn't Tell You
The first thing to understand is that accommodation rates alone don't run a profitable STR business — not long-term. The 138% premium is an average across a national dataset. It tells you nothing about your specific costs, your competitive positioning, or whether the market you're entering has room for one more operator.
More importantly: the margin game in STR is not where the real money is. Every operator has a price ceiling. The profits flow to whoever can run the most efficient operation — and efficiency comes from systems, automation, and the right type of guest in the right type of property, not from chasing the highest headline number.
Unique accommodation listings grew 123% between 2020 and 2024. The market that generated that 138% premium three years ago is a fundamentally different market today. The operators who got in early didn't need to be good — they just needed to be present. That window is closed.
The Market-First Trap
Here's how most new operators approach the market decision: they look at a map, find the highest-performing city or zip code, and ask "how do I get in?" That's starting with the product instead of the person — and in every other business category, that's considered a cardinal sin.
"As the market matures, the winners will be those who leverage precise, data-driven insights to adapt to shifting trends and capitalize on the strongest opportunities." — Jamie Lane, Chief Economist, AirDNA
Precision is not a shotgun approach to geography. Precision starts with understanding who you're building for. When you start market-first, you end up with a property optimized for a statistic — not for a human being.
And when the statistic changes — rates compress, regulations shift, competition increases — you have no foundation to stand on. The guest becomes an afterthought instead of the reason the business exists.
The Experience-First Framework (The Billy Bob Principle)
Let me give you a concrete example of what the alternative looks like.
Somewhere in the Everglades of Florida, there's a Billy Bob Alligator and Airboat experience. Billy Bob isn't sitting around asking which market has the best RevPAR. He's asking: who is the person that wants this exact experience, and how do I make it extraordinary for them? The accommodation around that experience follows. The geography is already decided — by the experience.
Field of Dreams logic applies here: build it for the right person, and they come. This is how I've always evaluated new STR markets — not by looking at the market first, but by identifying the experience first and the person who wants it. The location is a supporting variable, not the lead variable.
"2026 is opening meaningful opportunities for both new and experienced operators, but capturing them depends on understanding how market conditions are shifting." — Rohit Bezewada, CEO, AirDNA
The shift Bezewada is describing is exactly this: from commodity accommodation to curated experience. Niche STR operators in categories like bachelorette weekends already earn a 35% revenue premium over standard listings. The data supports the framework — the experience-first operators are already winning.
What This Means When You're Choosing a Market
There's a practical implication here that most guides leave out: this framework gets dramatically more powerful at scale.
When you're running one or two properties, it feels like real estate. At seven or more properties, it starts to feel like a business — because the systems, the team, and the guest relationships compound in ways that a single property can't support. The experience-first framework also protects you from concentration risk: if your guest identity is clear, you can serve that person in multiple markets.
The market has matured — not saturated. There's a difference. Saturation means there's no room. Maturity means you have to be good to win. The operators who are struggling right now started with geography. The operators who are thriving started with the guest.
You don't need to be in the highest-premium market. You need to be in the right market for the experience you're building. Those are rarely the same place.
Frequently Asked Questions
Should I still use the 138% premium data when evaluating a market?
Yes — but as a benchmark, not a goal. Use AirDNA data to stress-test your numbers after you've defined the experience and the guest. Don't let the headline stat drive the location decision.
What if the experience I want to build doesn't have obvious comp data?
That's a signal you're on to something. Novel experiences have limited comp data because the market doesn't have a category for them yet. When you build the category, you set the rate — and the 138% average becomes a floor, not a ceiling.
Is rental arbitrage still viable as an entry strategy in 2026?
Yes — the fundamentals haven't changed. You don't need to own property to build an STR portfolio. What's changed is the execution bar: you need to be good from day one, which means starting with a clear guest identity and a differentiated experience.
How many units do I need before the experience-first framework really pays off?
The strategy works at one unit. It compounds at seven or more. At that threshold, your guest identity starts driving acquisition decisions automatically — and you stop making location choices based on data alone.
Further Reading
If you want to go deeper on this framework — how to identify the right experience, build the guest profile, and find the market that supports both — the next step is the free newsletter. Every week, one actionable insight for STR operators building the right way. Subscribe at newsletter.cashflowdiary.com/welcome.