If you own a vacation rental, or you are thinking about buying one, the short-term rental market in 2026 has a story worth hearing. The newest U.S. KeyData Index from Key Data Dashboard came out in late October, and it shows a market that finished the third quarter much stronger than it started. I own vacation rentals on the Outer Banks and help owners think through these decisions every day, so I read this one cover to cover. Here are the numbers that stood out and what I think they mean for you.
September Changed the Story for Vacation Rental Demand
Most of the year, booking growth was modest. Then September showed up. The KeyData Demand Index, which tracks year-over-year change in reservations per property, hit +0.17, up 0.21 from August. The Revenue Index did even better at +0.24, up 0.22 month over month. In plain language, more people booked, and the bookings they made were worth more.
The report also notes that demand was negative through much of 2024, improved in 2025, and has stayed mostly positive in 2026. August was the one soft spot, and September more than made up for it.
Occupancy, ADR, and RevPAR: The Numbers Behind a Strong Finish
Here's how September compared with September 2025. Paid occupancy climbed from 29% to 33%, up 13%. Average daily rate (ADR) rose from $251 to $276, up 10%. Revenue per available night (RevPAR) went from $73 to $91, a 24% gain.
July and August told a quieter story. RevPAR grew 11% in July, from $199 to $221, and 2% in August, from $133 to $136. What I like most is that ADR rose in every finalized month of the quarter: 6% in July, 4% in August, and 10% in September. Rate growth is great, but the report points out that the best results came when higher rates were paired with more occupied nights.
What the Bookings on the Books Say About Q4 2026
If you are wondering about the holidays, the early signals are encouraging. Occupancy on the books is pacing at or above last year for the rest of 2026. October sits at 25% (up 2%), November is 6% ahead at 12%, and December is 12% ahead at 9%. Booking windows are still open, so those numbers should keep building.
Rates are a little more mixed. October ADR is pacing at $284 versus $267 last year (up 6%), and November is at $342 versus $329 (up 4%). December is the exception, at $473 versus $481 (down 2%). Even so, December RevPAR is pacing up 10% because occupancy is doing the heavy lifting.
Guests are also booking a bit earlier. The average booking window for October stays grew from 71 to 75 days, November from 112 to 115 days, and December from 151 to 152 days. Average length of stay barely moved, with September stays dipping from 4.2 to 4.0 nights. My takeaway: do not panic if pickup looks slow in the next few weeks. Check the market pacing before you slash your rates.
Short-Term Rental Performance by Region
Every region in the report posted RevPAR growth in Q3, but the paths to get there were very different.
RegionPaid OccupancyADRRevPARMid-Atlantic+5%+11%+16%Midwest+4%+11%+15%New England-2%+14%+12%Western U.S.+4%+8%+12%Southwest+5%+5%+11%Rocky Mountain States+2%+7%+9%Southeast+6%+3%+8%Hawaiian Islands+7%0%+6%
New England is a great example of why local matters. Occupancy slipped 2%, yet a 14% jump in ADR still produced 12% RevPAR growth. Hawaii went the opposite direction, with occupancy up 7% and rates flat.
Why the Southeast Matters for Virginia and North Carolina Owners
This is the part that hits close to home for me. The report puts both Virginia and North Carolina in its Southeast region. That region grew RevPAR 8%, driven mostly by occupancy (up 6%) with a modest 3% rate increase. That is a more volume-led picture than most other regions, and it is a useful reminder that the Southeast is not winning by simply raising prices.
To be clear, this is a regional number and not an Outer Banks number, so please ’t treat it as a promise for any one home. But it does tell me that guests are showing up in our part of the country, and that filling calendar gaps is a smart focus right now. If you want to talk through what that could look like for your property, reach out to me here.
Direct Bookings vs. Airbnb, Vrbo, and Booking.com
The Q3 booking source data is worth a close look. Airbnb held the top spot with 47% of reservations and 35% of revenue. Direct bookings slipped to 26% of reservations and 38% of revenue, down from 27% and 40% a year earlier. Vrbo held steady at 20% of reservations and 23% of revenue, and Booking.com grew from 6% to 7% of reservations and from 3% to 4% of revenue.
The number I would circle is the direct one. Direct guests are only about a quarter of reservations, but they bring in 38% of revenue. That is why I tell owners to keep a strong presence on the big platforms while also investing in repeat guests and a booking experience that makes returning easy.
Vacation Rentals vs. Hotels
The report also compares short-term rentals with hotels in seven regions. Hotel RevPAR was positive in six of them, but vacation rental RevPAR growth beat hotels in all seven. In the Mid-Atlantic, for example, rentals grew 16% while hotels grew 5%. In Hawaii, rentals grew 6% while hotel RevPAR fell 2%.
What I Would Do With This Data as an Owner
A few things I am taking from this report. Protect your rate when demand supports it, but watch pacing so you can spot nights that need a nudge. Look at your own market instead of the national headline, because the regional differences are big. Keep your direct booking channel healthy, since it earns more than its share. And if you are an investor, remember that one strong month does not make a trend, which is why I like to look at the full year of data before making a decision.
Frequently Asked Questions
How did the short-term rental market perform in Q3 2026? According to Key Data, September paid occupancy rose 13%, ADR rose 10%, and RevPAR rose 24% year over year. July RevPAR rose 11%, and August rose 2%.
What is RevPAR for a vacation rental? RevPAR is revenue per available night. You get it by multiplying occupancy by ADR, or by dividing total revenue by all available nights. It shows how well a property earns across the whole calendar, not just on booked nights.
Are short-term rentals still growing in Q4 2026? The early pacing data says yes. Occupancy on the books is at or above last year for October, November, and December, and RevPAR is pacing up 8%, 11%, and 10% for those months.
Do direct bookings still matter? They do. In Q3, direct bookings made up 26% of reservations but 38% of revenue, which is the largest revenue share of any channel.
Sources
U.S. KeyData Index, Q4 2026: Industry Performance Analysis, Key Data Dashboard, October 2026. Request a personalized performance analysis at keydatadashboard.com/demo.
Report sponsored by the Vacation Rental Management Association (VRMA), host of VRMA 26 Nashville.
I am LeAnne Anies, a Northern Virginia real estate agent with LeAnne + Company and the Fox Homes Team at Samson Properties, and a co-founder of Salt Coast by Sojourn on the Outer Banks. This post is for general information and is not financial or investment advice.
