The Enduring Niche: Why a Substantial Minority Still Opts for Private Rentals Despite Hotel Dominance This Holiday Season

TODAY’S DATE: December 3, 2025

A significant trend has emerged as Americans finalize their plans for the 2025 holiday travel season: a clear statistical preference for traditional hotels over short-term rentals (STRs) like Airbnb and Vrbo. A recent survey, conducted by Upgraded Points and reported across industry publications, indicates that 62 percent of U.S. travelers favor hotels for their peak-season stays. Yet, the segment opting for private rentals—nearly four out of every ten travelers (38 percent)—is not simply comprised of bargain hunters; rather, this group is motivated by specific lifestyle and space requirements that traditional lodging often cannot meet, regardless of service level. Their choice is a deliberate prioritization of environment and autonomy over centralized amenities and service predictability. The editor-in-chief of the organization that conducted the study, Keri Stooksbury, aptly noted that the entire traveler mindset is evolving, stating that convenience, transparency, and community impact are now shaping decisions, indicating that even within the minority segment, new value propositions are being sought.

The Enduring Niche: Why a Substantial Minority Still Opts for Private Rentals

Despite the clear statistical advantage held by hotels for the holiday season, the segment opting for short-term rentals—nearly four out of every ten travelers—is not simply comprised of bargain hunters; rather, this group is motivated by specific lifestyle and space requirements that traditional lodging often cannot meet, regardless of service level. Their choice is a deliberate prioritization of environment and autonomy over centralized amenities and service predictability.

The Premium Placed on Personal Space and Untouchable Privacy

The single greatest appeal for the thirty-eight percent of travelers choosing rentals is the fundamental desire for increased square footage and an elevated sense of personal territory. A compelling seventy-five percent of those who lean toward short-term accommodations prioritize the availability of more space and robust privacy, which is often difficult to secure in a standard hotel room or even adjoining rooms. For multi-generational family gatherings or groups traveling together during the holidays, having distinct living areas, multiple bathrooms, and the feeling of a temporary private home environment is an essential, non-negotiable element of the experience, fostering a different kind of communal celebration.

Leveraging Homestyle Comforts: The Kitchen and Domestic Functionality

Another significant draw, cited by sixty-eight percent of the rental advocates, is the integration of true homestyle amenities, most notably the full-service kitchen. For extended holiday stays, or for families with strict dietary needs, young children, or simply a desire to recreate familiar traditions like holiday baking or elaborate shared dinners, the ability to prepare and serve meals in a private, fully equipped setting is invaluable. This functionality shifts the vacation dynamic from one centered on dining out to one centered on domestic activity and shared culinary creation, a hallmark of many traditional holiday celebrations.

Accommodating Collective Travel: Sizing Up for Larger Contingents

The final key differentiator for this segment is the practicality of housing larger numbers of people efficiently. Fifty-six percent of short-term rental adherents specifically choose this model when traveling with extensive families or larger groups of friends. A standard hotel configuration often necessitates booking multiple, often costly, individual rooms, which fragments the group experience. In contrast, a rental property offers a centralized living and sleeping arrangement that maintains group cohesion, often at a better aggregate per-person cost than securing equivalent room blocks in a conventional hotel setting.

The Economics of Perception: Pricing Transparency as a Decisive Metric in Two Thousand Twenty-Five

The evaluation of cost is never absent in travel planning, yet the 2025 findings suggest that the way the cost is presented is becoming as important as the absolute final figure. A significant majority of travelers now perceive hotels as offering superior financial clarity, which directly impacts their trust in the booking process. This perception is powerful because it speaks to the traveler’s desire for control over their financial commitment throughout the entire journey. Hotels were cited by 73 percent of respondents as superior due to amenities, and by 62 percent for having no cleaning rules or surprise fees.

The Perception of Lower Domestic Travel Costs in Traditional Lodging

Sixty-four percent of all respondents indicated a belief that, for domestic travel scenarios, hotels ultimately present a less expensive lodging option when all variables are factored in. This suggests that the added costs frequently associated with short-term rentals—such as variable cleaning fees, which may or may not scale appropriately with stay length, and administrative booking charges—are being mentally accounted for by travelers, pushing them toward the hotel standard as the baseline cheaper option for routine travel.

Measuring Trust Through Fee Visibility: The Hotel Transparency Premium

The disparity in trust regarding billing is even more pronounced when looking at fee disclosure. A striking seventy-six percent of the surveyed population asserted that hotels provide a significantly more transparent accounting of their total pricing structure and associated service fees. This high figure underlines a critical vulnerability for the short-term rental sector: the consistent pattern of itemizing charges late in the booking funnel erodes traveler confidence and pushes budget-conscious consumers toward the established, known quantity of the hotel bill.

Societal Responsibility and the Ethical Dimension of Lodging Choices

A notable evolution in the data set for two thousand twenty-five is the incorporation of ethical and community impact considerations into the lodging decision, demonstrating a growing sense of traveler responsibility or at least awareness of externalities. This introduces a layer of complexity where personal travel choices are being weighed against potential negative societal consequences, particularly in high-demand metropolitan and vacation areas. The dialogue surrounding the role of short-term rentals in housing affordability has clearly permeated public consciousness, influencing booking attitudes for the holiday season.

Widespread Concern Over Housing Affordability Impacts from Short-Term Rentals

A considerable majority, exceeding seventy percent of all travelers surveyed, expressed the view that the proliferation of short-term rental properties directly contributes to escalating housing costs within popular destination locales. This represents a significant societal pressure point being internalized by the consumer base, even those who might occasionally utilize these rentals. The concern is particularly acute among younger demographics, with the agreement level reaching as high as seventy-five percent among both Generation Z and Millennial respondents, suggesting a future where this ethical consideration may become even more pronounced.

Growing Support for Municipal Intervention and Regulatory Frameworks

Mirroring the concern over housing costs, a clear majority of travelers signaled their approval for municipal governance stepping in to manage the scope of the short-term rental market. Sixty-one percent indicated that they believe city authorities should enforce limitations on the number of short-term rental units permitted in areas experiencing high housing demand. This acceptance of external regulation over the private rental market signifies a desire for equilibrium between the tourism economy and the need to maintain stable, affordable residential communities for permanent residents.

Broader Sector Implications: Analyzing Vrbo and Competitor Performance in the 2025 Market

The findings from the holiday preference survey gain added weight when viewed against emerging data concerning the actual transactional performance of the short-term rental platforms themselves during the broader travel year. Evidence from recent market analysis suggests that platforms like Vrbo have been experiencing some softening in their Average Daily Rates (ADR) compared to the gains seen by more diversified Online Travel Agencies (OTAs) pushing hotel volume. This parallel trend suggests that the preference shift for the holidays may be indicative of a larger, recalibration of market positioning and pricing power across the entire spectrum of accommodation providers. Furthermore, the evolving booking behavior—characterized by shorter lead times and increased spontaneity—presents an operational challenge to the private rental model, which often requires more extensive coordination.

Pricing Power Dynamics: A Snapshot of ADR Trends for Short-Term Rentals

Market observations from earlier in the year indicate a complex pricing landscape. While U.S. short-term rental demand hit a record high in July 2025, with overall ADR climbing by 6.9% year-over-year, this masks significant regional and platform divergence. Some markets are projecting strong ADR increases due to regulatory limits on supply. However, other analyses report revenue declines of 8–12% year-over-year in certain coastal markets, and a general trend of pricing pressure has pushed many property managers to lower rates to remain competitive in a saturated environment. The narrative presented is that the market signaled a necessary downward correction in rental pricing to maintain competitiveness in areas not buoyed by specific events like the Super Bowl.

The Challenge of Booking Lead Times and Last-Minute Travel Adaptation

The rise in spontaneous travel, characterized by shorter booking lead times, poses an operational friction point. While one segment of the market shows a trend toward longer trips, data from summer 2025 indicated a 12% year-over-year decline in booking lead time, pointing to a greater last-minute travel behavior. This spontaneity often benefits the hotel model, where operations run twenty-four hours a day, over the private rental model which requires coordination for cleaning and key exchange. The industry must adapt its revenue management strategies, perhaps by shortening minimum stay requirements, to recapture some of the spontaneous traveler volume that might otherwise default to a hotel booking due to speed and convenience.

Concluding Thoughts on the Evolving Traveler Psyche and Future Trajectory

The two thousand twenty-five holiday travel survey serves as a significant inflection point, illuminating a traveler base that is increasingly sophisticated, ethically aware, and resistant to hidden costs. While the intrinsic appeal of privacy and space in a rental property remains potent for a dedicated segment, the overall majority is currently voting for the assuredness, amenity richness, and financial transparency that the traditional hotel industry delivers, especially during peak, high-expectation periods like the holidays. The narrative that short-term rentals would inevitably supplant conventional lodging has been tempered by the realities of consumer experience: convenience, when bundled with clear pricing, often triumphs over the promise of a purely domestic experience when that experience is marred by unexpected fees or regulatory uncertainty hanging over the destination. The travel industry, for both hoteliers and property managers, must internalize these findings, focusing on enhancing value through clearer communication and service integration to successfully navigate the ongoing equilibrium between these two powerful lodging philosophies into the future. The evolution is not over, but for this crucial holiday period, the established framework holds the confidence of the majority.