Glossary
Comprehensive definitions for Airbnb, vacation rental, and property investment terminology
139 terms
A 1031 exchange lets STR investors sell a rental property and reinvest all proceeds into a like-kind replacement without paying capital gains tax at closing — deferring the tax bill indefinitely.
Absorption rate measures how quickly new STR listings reach viable occupancy. High rates signal healthy demand; falling rates warn of approaching market saturation.
An active listing is a short-term rental property with confirmed booking or calendar activity in the past 12 months — the standard measure of true STR market supply.
Adjusted occupancy rate is booked nights divided by bookable nights — excluding owner-blocked dates — giving a true measure of STR booking performance.
Airbnb is the world's largest short-term rental marketplace, connecting hosts and guests across 220+ countries with 7 million+ active listings.
Airbnb Experiences are local activities and tours hosted through Airbnb. Learn how they work, how to qualify, what hosts earn, and how they complement STR listings.
Airbnbust is the colloquial term for the STR profitability downturn: supply growth outpacing demand, compressing occupancy, ADR, and host revenue across many markets.
AirCover is Airbnb's free built-in protection program providing up to $3M in damage coverage and $1M in liability insurance for every booking, at no extra cost.
Amenities are the features, supplies, and services at a short-term rental that drive search visibility, guest satisfaction, and nightly rate premium — from essential Wi-Fi to revenue-boosting hot tubs.
An API (Application Programming Interface) lets software systems exchange data. In short-term rentals, APIs connect pricing tools, PMSs, and market analytics platforms.
Automated messaging sends pre-configured guest messages triggered by booking events — confirmation, check-in, checkout — ensuring consistent, timely STR communication at scale.
Available nights are the calendar nights a short-term rental is open for booking. They set the denominator for adjusted occupancy and define a market's total supply capacity.
Average Daily Rate (ADR) is the average rental income earned per booked night: total revenue divided by occupied nights. See real ADR benchmarks by market and how to improve yours.
Average Length of Stay (ALOS) is the mean number of nights per booking. Learn the formula, real market benchmarks, and strategies to optimize stay length for STR profitability.
Average Transaction Value (ATV) is the mean revenue per reservation: total gross revenue divided by reservations. Learn the formula, real benchmarks, and strategies to grow per-booking income.
Base price is the starting nightly rate that dynamic pricing algorithms use as an anchor before applying demand, seasonal, and day-of-week multipliers to calculate the final rate a guest pays.
A bed and breakfast (B&B) is a small, owner-operated lodging with overnight accommodation and a morning meal — personal hospitality hotels and plain rentals can't match.
Benchmarking compares your STR's ADR, occupancy, and RevPAR against comparable properties so you can pinpoint exactly where you are winning or losing revenue.
Blocked dates are calendar nights a short-term rental host marks unavailable for booking — used for personal use, maintenance, turnover buffers, or holding direct reservations.
Booking curve tracks how reservations accumulate over time for a future date, revealing whether demand is ahead or behind pace — the clearest pricing signal in STR revenue management.
Booking lead time is the days between a guest's reservation and check-in. It determines when to hold rates firm, when to discount, and how to forecast STR revenue.
Booking pace measures how fast reservations accumulate for a future period — the leading indicator STR hosts use to raise or cut rates before demand becomes visible in occupancy.
Booking.com is the world's largest OTA for vacation rentals, reaching 500M+ monthly visitors across 228 countries. Learn its 15% commission model and how it compares to Airbnb.
A boutique hotel is a small, independently operated property of 10–100 rooms with distinctive design, personalized service, and a unique character that sets it apart from chain hotels.
Break-even occupancy is the minimum occupancy rate a short-term rental must hit to cover all operating costs and debt service, producing zero net cash flow.
A business license is a government authorization to operate commercially. STR hosts typically need one alongside an STR permit to legally run a short-term rental.
A cancellation policy defines the refund rules and timelines when a short-term rental reservation is cancelled. The right tier protects revenue without sacrificing bookings.
Cap rate (capitalization rate) is a property's net operating income divided by its market value, expressed as a percentage. See real STR cap rates by market.
Cash flow is gross rental income minus all operating expenses and mortgage payments. Positive cash flow means a short-term rental puts money in your pocket every month.
Cash-on-cash return measures annual pre-tax cash flow divided by total cash invested, expressed as a percentage — the clearest way to compare STR leverage against other investments.
A channel manager syncs availability, rates, and content across Airbnb, Vrbo, Booking.com, and other OTAs in real time, eliminating double bookings across platforms.
Check-in and check-out are the guest arrival and departure processes that bracket every STR stay, setting the tone for reviews, revenue, and operational reliability.
A cleaning fee is a one-time charge per STR reservation covering turnover labor, supplies, and laundry. Learn how to set it, price it strategically, and protect bookings.
A co-host manages an Airbnb listing on behalf of the owner — handling guest communication, check-ins, and pricing — for a fee of 10–25% of booking revenue.
Commission is the share of a booking a platform or agent keeps. Airbnb takes 15.5% of the subtotal from most hosts; Vrbo charges 5% plus 3% payment processing.
A comp set is a curated group of comparable short-term rental properties used to benchmark pricing, occupancy, and revenue against direct competitors in your submarket.
A conditional use permit (CUP) is a discretionary zoning approval that allows an STR where the use requires a public hearing and attached operating conditions.
Cost segregation is a tax strategy that reclassifies rental property components into shorter depreciation schedules, letting STR investors front-load deductions and reduce taxable income.
Cross-listing publishes a short-term rental on multiple booking platforms simultaneously to maximize occupancy, reduce platform dependency, and reach diverse traveler segments.
Debt service coverage ratio (DSCR) measures a property's net operating income against its annual mortgage payments. See how STR lenders use DSCR to qualify investors.
Demand in short-term rentals is the total booked nights travelers book in a market over a given period. Understand how to measure, track, and respond to STR demand.
Demand factor is a numerical multiplier applied to a base price by dynamic pricing algorithms to reflect real-time market demand, raising or lowering nightly rates automatically.
Depreciation is a tax deduction letting short-term rental owners recover property cost over its useful life — reducing taxable income each year with no cash outlay.
Direct booking is a reservation made without a third-party OTA, saving hosts 3–20% in commission fees and giving them full ownership of the guest relationship.
A double booking occurs when two reservations overlap for the same dates at a short-term rental. Learn how it happens, its consequences, and how to prevent it.
Dynamic pricing automatically adjusts a short-term rental's nightly rate in real time based on demand, seasonality, and competitor data to maximize revenue.
A dynamic pricing tool is software that automatically adjusts short-term rental nightly rates using demand, competition, and seasonality signals to maximize ADR and RevPAR.
An early-bird discount is a price reduction for guests who book a short-term rental 60–120+ days in advance, improving host cash flow and reducing last-minute vacancy risk.
Entire Home / Entire Place is the short-term rental listing type giving guests exclusive access to the full property — every bedroom, bathroom, and kitchen — with no host presence during the stay.
Extra guest fee is a per-person, per-night charge STR hosts apply when bookings exceed a set guest threshold, recovering incremental costs from larger groups.
A GDS (Global Distribution System) is a computerized network connecting travel agents and corporate booking tools to real-time inventory from airlines, hotels, and vacation rentals.
GOPPAR measures gross operating profit per available night after deducting operating costs. The complete STR profitability metric that goes beyond RevPAR.
Gross booking revenue is the total amount a guest pays per reservation — nightly rates, cleaning fees, extra charges, and taxes — before any host deductions.
Gross rental yield is annual STR revenue divided by property value, expressed as a percentage — the fastest screen for comparing short-term rental investment opportunities.
Gross revenue is the total income from short-term rental bookings before any expenses — nightly rates, cleaning fees, and guest charges combined. See real market benchmarks.
Guest communication is the structured flow of messages between a short-term rental host and guest — from inquiry through post-checkout — that drives ratings, ranking, and repeat bookings.
Guest Favorite is an Airbnb badge for the top 5% of listings by ratings, reviews, and reliability. Learn how it works and how it differs from Superhost.
HOA restrictions are homeowners association rules in CC&Rs that can legally limit or ban short-term rentals — separate from and in addition to local STR regulations.
A homestay is accommodation in a host's personal residence while the host lives there — combining a private room with cultural exchange, local knowledge, and personal hospitality.
House rules are host-defined guidelines that set guest expectations for behavior, property care, and policies during a short-term rental stay — and are agreed to at booking.
iCal sync uses the .ics calendar format to synchronize availability across Airbnb, Vrbo, and other booking platforms, preventing double bookings between channels.
Instant Book lets guests book an Airbnb without host approval, boosting search ranking and occupancy. Learn when to enable it, what guest requirements to set, and the tradeoffs.
Last-minute discount: a price reduction applied to unbooked STR dates within 1-14 days of check-in to recover revenue that would otherwise be lost to vacancy.
A length-of-stay discount reduces the nightly rate for longer bookings. Weekly and monthly discounts boost net revenue, lower turnover costs, and raise occupancy.
Liability insurance protects short-term rental hosts against guest injury claims, property damage lawsuits, and legal defense costs. Learn coverage types, gaps, and costs.
Listing optimization is the process of improving every element of a short-term rental listing — photos, title, amenities, and pricing — to maximize search visibility and revenue.
Management fee is the percentage of gross rental revenue a property manager charges to operate a short-term rental, typically 15-30%. Understand fee structures and real cost impact.
A market dashboard is an analytics tool that consolidates STR performance data—occupancy, ADR, RevPAR, supply, and demand—into one interface for data-driven decisions.
Market saturation in short-term rentals occurs when active listing supply outpaces traveler demand, compressing occupancy and ADR across a market.
Market value is the estimated price a property would sell for in a competitive open market. For STR investors, it anchors cap rate, yield, and equity calculations.
Maximum price is the hard ceiling rate a dynamic pricing algorithm cannot exceed for a short-term rental, preventing overpricing during peak demand while protecting revenue.
Maximum stay is the longest booking duration a host allows at a short-term rental. It protects against tenant-rights exposure, preserves peak-season availability, and shapes calendar strategy.
Mid-term rental (MTR) is a fully furnished property rented for 1–6 months, bridging short-term vacation rentals and long-term leases with lower costs and regulatory burden.
Minimum price is the lowest nightly rate an STR host will accept. It acts as a price floor inside dynamic pricing tools, protecting margins during low-demand periods.
Minimum stay is the fewest nights a guest must book at a short-term rental. Learn how this single setting shapes occupancy, turnover costs, and total revenue.
Mortgage interest deduction lets STR property owners deduct 100% of investment mortgage interest as a business expense on Schedule E, with no loan amount cap.
Net operating income (NOI) is gross STR revenue minus all operating expenses, excluding mortgage payments. It sets cap rate and drives property valuation.
Net rental yield is annual rental income minus operating expenses, divided by property value, expressed as a percentage — the clearest measure of STR investment return.
Net revenue is short-term rental income after all operating expenses, fees, and taxes. It is the true bottom-line metric for evaluating STR profitability and investment returns.
An annual night limit (night cap) restricts the total nights per year a property may operate as an STR. Limits range from 30 to 365 nights and directly cap revenue potential.
Nightly rate is the per-night price a guest pays for a short-term rental. It drives booking conversion, search ranking, and total revenue — and varies with demand, season, and day of week.
A noise monitor is a privacy-safe device measuring decibel levels in short-term rentals to detect parties and ensure compliance — without recording audio.
Non-owner-occupied rental: an STR where the owner is absent during stays, facing the strictest permits, zoning caps, and regulatory scrutiny in any market.
Occupancy limit is the maximum number of guests legally allowed in a short-term rental, set by local fire codes, building codes, or STR ordinances to protect safety.
Occupancy rate is booked nights divided by all nights in a period, with owner-blocked nights counted as unbooked. The primary measure of STR demand.
Occupancy tax collection is the process of collecting government-mandated lodging taxes from guests and remitting them to the appropriate authority. Rates typically range 5–15% of the rental amount.
Off-season is the lowest-demand period in a short-term rental market, marked by falling occupancy and compressed nightly rates. Learn how to protect cash flow and maintain bookings year-round.
An online travel agency (OTA) is a third-party platform like Airbnb or Vrbo that connects travelers with short-term rentals, charging hosts 3–20% commission per booking.
Operating expenses are the recurring costs of running a short-term rental — management, cleaning, insurance, taxes, utilities, and maintenance — excluding mortgage payments.
Orphan days are short unbookable gaps between reservations that cost STR hosts revenue. Learn causes, impact by market LOS, and proven strategies to fill gap nights.
An owner-occupied rental is an STR where the property owner lives on-site during guest stays, qualifying for lighter permits, night-cap exemptions, and tax advantages.
Pacing compares current forward bookings to last year's same point, giving STR hosts an early demand signal to raise or cut rates before revenue is lost.
Paid occupancy rate is the share of available nights booked by revenue-generating guests. It excludes owner stays and comps — the number investors and lenders rely on.
Peak season is the highest-demand period for short-term rentals, driving occupancy and nightly rates to their annual maximums. Hosts who price and prepare correctly can capture 40–60% of annual revenue in just 3–4 months.
A pet fee is an additional charge STR hosts apply when guests bring pets. It covers extra cleaning, allergen removal, and wear. Typical range: $25–$150 per stay.
Potential annual revenue is the projected maximum annual income a short-term rental can generate, calculated from market ADR, occupancy, and comparable listing data.
Premier Host is Vrbo's top-performer badge for vacation rental hosts who meet strict rating, response, and cancellation thresholds — boosting search placement across the Expedia Group.
A primary residence requirement restricts STR permits to the owner's main home. Learn how cities enforce this rule, which markets apply it, and how it reshapes supply.
A private room is a short-term rental listing where guests get their own lockable bedroom while sharing common areas — the lowest-cost entry point for new Airbnb hosts.
A pro forma is a forward-looking financial projection that estimates the revenue, expenses, and net returns of a short-term rental investment before you commit capital.
A property management system (PMS) centralizes reservations, calendars, guest communication, and operations for short-term rental hosts managing one or more listings.
Rack rate is the standard published nightly price before any discounts or dynamic adjustments — the reference ceiling that anchors all STR pricing strategy.
Rental arbitrage is leasing a property long-term and subletting it as a short-term rental on Airbnb to profit from the spread between monthly rent and nightly income.
A resort fee is a mandatory nightly charge, typically $15–$75+, covering shared amenity access — pools, gyms, parking — in condo-hotel or HOA-managed vacation rentals.
Response rate is the percentage of guest inquiries a host answers within 24 hours over a rolling 30-day period — the most gating metric for Airbnb Superhost eligibility.
Return on investment (ROI) is net profit divided by total capital invested, expressed as a percentage. It is the most comprehensive measure of Airbnb property performance.
Revenue management is the strategic practice of optimizing pricing, minimum stays, and distribution to maximize short-term rental income. Core strategies and KPIs explained.
RevPAL (Revenue Per Available Listing) measures total portfolio revenue divided by active listings. Benchmark real STR RevPAL data by market, formula, and optimization tactics.
RevPAN (Revenue Per Available Night) equals ADR multiplied by occupancy rate — the single metric that captures both pricing power and booking efficiency for short-term rentals.
RevPAR (Revenue Per Available Room) = ADR × occupancy rate. It measures revenue efficiency across all available nights — the single best metric for comparing STR performance.
Reviews and ratings are the star scores and written feedback guests leave after a short-term rental stay — the primary trust signal that drives search ranking, booking conversion, and nightly rate.
Data scraping is the automated extraction of listing data from rental platforms using bots or scripts. Learn how it works, its legal risks, and why APIs are the professional alternative.
Seasonality is the predictable, recurring demand cycle that drives Airbnb occupancy, ADR, and RevPAR up in peak months and down in the off-season — the single largest driver of STR revenue variance.
Seasonality index measures how each month's STR demand compares to the annual average. A score of 130 means 30% above average; 70 means 30% below. Used for pricing, forecasting, and market comparison.
A security deposit is a refundable hold or charge collected from guests to cover potential property damage during a short-term rental stay.
Self check-in lets short-term rental guests access a property independently using smart locks, lockboxes, or keypads — no host present required. Learn how it works.
A serviced apartment is a fully furnished apartment with hotel-like services — housekeeping, concierge, and utilities — suited for business travelers and extended stays.
A shared room is a short-term rental listing type where guests sleep in the same space as the host or other guests, with no private bedroom of their own.
A short-term rental (STR) is a furnished property rented for fewer than 30 consecutive days. Learn how STRs are defined, regulated, taxed, and how they perform versus long-term rentals.
Shoulder season is the transition period between peak and off-season in short-term rentals, marked by moderate demand, mid-range ADR, and variable occupancy.
A smart lock is an electronic door lock that generates unique, time-limited access codes per guest reservation, enabling keyless self check-in and eliminating physical key exchanges for STR hosts.
Smart Pricing is Airbnb's built-in automated pricing tool. It adjusts nightly rates daily within host-set bounds based on demand signals — but typically underprices listings versus dedicated tools.
A split stay is when Airbnb divides a guest's trip across two or more listings because no single property covers the full duration. Learn how it works and how hosts benefit.
An STR permit is a government authorization required to legally operate a short-term rental. Covers requirements, costs, application steps, and compliance.
STR regulations are the local laws governing short-term rentals — permits, taxes, zoning, and night caps. See how rules reshape supply and minimum stays.
A submarket is a neighborhood-level segment within a larger STR market with distinct occupancy, ADR, and RevPAR patterns. Submarket analysis exposes performance gaps that city-level data hides.
Superhost is an Airbnb status for top-performing hosts who meet strict rating, response, and cancellation thresholds. See the measured revenue premium.
Supply in short-term rentals is the total count of active listings or available nights in a market. Learn how supply levels shape occupancy, ADR, and revenue.
Transient occupancy tax (TOT) is a local tax on short-term stays under 30 days, collected from guests and remitted to the government by hosts or booking platforms.
Turnover is the cleaning and prep process between guest stays at a short-term rental — cleaning, restocking, laundry, and inspection that resets the property for the next arrival.
Unique Stay is the STR category for unconventional properties — treehouses, yurts, domes, houseboats, castles — that earn 20–60% ADR premiums on Airbnb.
Unit revenue is the total revenue a single STR listing generates in a period, excluding taxes. It benchmarks each property's contribution across a portfolio.
A vacation rental is a fully furnished residential property rented to leisure travelers for short stays — typically 2–14 nights — generating premium nightly revenue vs. long-term leases.
Vacation rental software is the full stack of platforms — PMS, dynamic pricing, messaging, and analytics — that STR hosts use to manage listings, guests, and revenue.
Vrbo (Vacation Rentals by Owner) is a major vacation rental marketplace owned by Expedia Group, listing entire homes only. Learn how it works, fees, and how it compares to Airbnb.
A welcome guide is a property information document that gives short-term rental guests everything they need — WiFi, appliances, house rules, and local tips — from day one.
The guest service fee is the 14.1%–16.5% charge Airbnb added to a guest's booking subtotal under the split fee. Under Airbnb's 15.5% single fee, guests pay none.
Year-over-Year (YoY) growth measures the annual percentage change in STR revenue, ADR, or occupancy, eliminating seasonal noise to reveal true performance trends.
Zoning regulations are local land-use laws that designate where short-term rentals can legally operate, shaping STR supply, permit eligibility, and investment viability.