From Boom to Balance: The STR Market’s Post-Pandemic Shift

Victoria Ward
3/4/2025

Casago is an owner-centric, short-term rental property management company offering prime homes in handpicked locations throughout North America and Mexico. We spoke with Tim Smith, Casago partner in New Smyrna Beach, and Manuel Arroyave, Casago partner in Orlando, to discuss how business has changed since the pandemic and what’s in store for the industry.

How have you seen the industry change since the pandemic?

Smith: Since the pandemic, the industry has experienced a real shift toward automation and technology-driven efficiency. Smart property technology has become a valuable and proven part of a property manager’s tech stack with automated locks, water detection sensors, outside cameras, and intelligent and remotely controlled thermostats, all saving money and improving security. You can even get a sensor that automatically shuts off the AC when the window opens, and with a new unit costing $10,000, it makes sense to use sensors to improve the lifespan of this hardware.

Arroyave: The industry obviously went through an unprecedented boom in 2022 and 2023, with remote work, low interest rates, and extra cash in guests’ pockets driving demand. Many hoped and assumed this would be the “new normal,” but things have since leveled out, and we’re now back to 2018-2019 numbers. With rising home prices, higher interest rates, and tighter travel budgets, demand is lower, and competition is now tougher than ever. The ones who are thriving today are the managers who truly understand hospitality and put homeowners and guests first.

Another big shift is in guest expectations. Short-term rentals aren’t just a fun alternative to hotels anymore; they’re a direct competitor. That means guests expect hotel-level service, cleanliness, and maintenance. No more “this is my second home” excuses when something doesn’t work. With supply continuing to grow, only those who run a tight operation and focus on quality will succeed.

What are the most notable advancements or shifts in operations, guest expectations, technology, regulations, and management strategies?

Smith: In operations, the adoption of advanced property management systems (PMS) and automation tools has transformed how property managers operate. Processes like maintenance, guest communication, and security have become more efficient, often requiring less manual intervention. This is good news for owners, as their properties are managed even more efficiently and looked after to an even higher standard, while guests are getting a really slick experience undisturbed by hardware breakdown or property maintenance.

Guest expectations have also shifted, with travelers now prioritizing more personalized and authentic experiences when they stay in a vacation rental. This is when local expertise really comes into its own. Not only can locally based property managers tell you the great restaurants to go to, but they can also tell you to ask for “Michelle,” who can make them a really great cocktail. Now THAT’s local.

Arroyave: The short-term rental industry has become much more professional, and the biggest difference now is that you have to really know what you’re doing to be successful. Running an STR business today isn’t just about hosting; it requires expertise in pricing, operations, compliance, and guest experience.

Regulations have been a game-changer. While they add complexity, they’re also helping weed out low-quality operators and scams. This is good for the industry in the long run, making it more trustworthy and sustainable. Guest expectations have also skyrocketed. Now that vacation rentals are going head-to-head with hotels, travelers expect flawless service, fast communication, and spotless properties. Technology is helping meet these demands, automating everything from guest messaging to maintenance tracking. The Casago community helps me with this too as it offers so much experience, insight, and information.

The bottom line is that the industry is maturing. This isn’t a get-rich-quick space anymore. The property managers who embrace technology, stay ahead of regulations, and deliver top-tier guest and homeowner experiences are the ones who will continue to thrive.

What trends, challenges, and opportunities do industry experts anticipate for the year ahead?

Smith: I believe this is going to be an exciting year for our industry, as long as hosts and property managers get back to the basics of this business. We can no longer count on pent-up demand, low-cost money/credit, or a pandemic to support revenue. The trend for this year should be an improved focus on guests and putting their experience front and center of every booking. There are two key ways to achieve this.

First, owners that have been coasting along without improving their properties will now have to update them to stay relevant and worthy of a booking. This doesn’t have to be costly, but a basic overhaul and modernization of rentals will go a long way. Second, enhancing the guest’s experience with overcommunication (through the guest's desired method), along with treats or surprises such as gifts on arrival, free late check-out, a personal note of thanks, etc., should be table stakes now.

Despite a backdrop of challenges for the industry, including interest rate hikes, the increased cost of gas that can particularly affect the drive-to destinations, and global economic uncertainty that may dampen travel demand, there are opportunities for both hosts and property managers. Using this “slowdown” time to prune unwanted properties, making little enhancements to every property and finding new ways to “wow” guests will set property managers up for a fantastic 2025.

Arroyave: The short-term rental industry has definitely become more professionalized, and that trend is only going to accelerate. Gone are the days when anyone could manage a few properties from their phone and expect to make easy money. Now, it takes full-time dedication, expertise, and the right technology to run a successful STR business.

The industry has reached a point where only those who truly specialize in STR property management will be able to keep up with guest expectations, regulations, and market fluctuations. As competition increases, there’s less room for poorly run operations or “hobby” hosts who aren’t providing top-tier service.

On the flip side, this shift presents a huge opportunity for professional property managers. Those who commit fully to STR management will thrive. The next few years will separate serious businesses from casual hosts, and those who embrace efficiency, professionalism, and scalability will be the ones who win.

How can property managers adapt to stay competitive and sustainable?

Smith: Staying competitive in today’s market requires three areas of focus: the guests, the pricing, and the properties.

Managers must prioritize the guest, making every stay an authentic, exceptional experience. Variable pricing should be used to prevent overpricing and fine-tuning rates to reflect current market conditions, attracting more guests while maximizing revenue. Finally, property managers should pick the right properties. If an owner is not going to update their property, then prune it.

Arroyave: To stay competitive, property managers must constantly evolve with technology and find ways to stand out. The industry is changing fast, and what worked a year ago might not work today. Property managers need to focus on continuous improvement — embracing automation, optimizing operations, and using smart pricing strategies to stay ahead of the competition.

But it’s not just about efficiency. Sustainability is becoming a bigger priority, and while some progress has been made, there’s still a long way to go. Property managers who take real action, whether through eco-friendly operations, energy-efficient technology, or community-driven sustainability efforts, will be in a stronger position as traveler preferences shift toward responsible tourism.

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