Airbnb Investment Hotspots: How to Spot Emerging STR Markets Before Everyone Else

Everyone wants to invest in the next big Airbnb market, but the real wins often come from spotting places before they blow up. An “emerging STR market” is where short-term rental demand is climbing steadily, supply hasn’t caught up yet, local rules are clear enough to invest confidently, and property prices are still within reach. 

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Think of it as catching the wave early instead of fighting for scraps once it’s mainstream. Timing is everything: once a destination becomes “popular,” listings multiply, profits shrink, and city councils start tightening regulations. The early movers get better occupancy, stronger returns, and more flexibility when markets shift. 

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In the sections that follow, we’ll break down exactly how to recognize these emerging opportunities before everyone else does.

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What “Emerging” Looks Like in the Data (Your Scorecard)

When you’re hunting for an up-and-coming short-term rental market you can stay ahead in, it pays to zoom into the numbers. Think of this as your personal scorecard to evaluate whether a destination has the traction you want. I’ll walk you through the key metrics and how to layer in investability checks that really separate catch-ups from genuine early movers.

Core Metrics

1. Occupancy Trend (Year-Over-Year): Ask yourself: is the percentage of booked nights increasing? If a market is seeing occupancy rise steadily, that tells you there is growing demand. If it’s flat or dropping, that may be a red flag.
2. ADR Trend (Average Daily Rate Growth): Growing occupancy is good, but if owners are still charging the same rate, you may be missing the pricing upside. A rising ADR means more dollars per booked night.
3. RevPAR Trend (Revenue per Available Room or Unit): This blends occupancy and ADR, so it’s one of the best single indicators of performance. RevPAR going up means you’re getting more actual income per unit, not just more bookings.
4. Supply Growth vs Demand Growth: Emerging markets typically have demand climbing faster than supply. If supply is exploding while bookings stagnate, you’ll run into downward pressure. Use a service like Key Data Dashboard to compare listings growth with booked nights growth.
5. Booking Lead Time: If more guests are booking further in advance, that suggests stronger destination branding and planning behavior—not just last-minute stays. It hints at staying power.
6. Length of Stay: If the average stay is getting longer, that can point toward more serious travel demand (week-long trips, families) rather than fleeting weekend occupancy. Longer stays often mean less turnover cost and more stability.

Weighting the Metrics

Not all markets are created equal. If you’re evaluating a tiny town with only a handful of listings, the data will be noisy. For markets with a solid number of listings (say 200+ active units) you can put heavier weight on ADR and RevPAR growth. In thinner markets, occupancy trend and supply/demand balance get more emphasis since the rate data may fluctuate wildly. 

Tailor your scores accordingly: maybe 30% occupancy, 30% ADR, 25% supply/demand, 15% booking & length metrics—change the mix depending on how big and mature the market is.

Investability Layer

Once the core metrics are positive, you walk into the “Is it worth buying?” territory.

• Entry Price vs Projected Revenue: You could pick a hot market, but if homes cost three times what earnings justify, you’re entering late. Calculate a rough payback period: purchase price divided by annual gross rental income. Aim for shorter paybacks in emerging markets.
• Seasonality Stability: A market with 20 weeks of high demand and 32 weeks of tumble may be too risky unless you’re comfortable with large offseason gaps. Prefer markets where demand is reasonably spread or where slow seasons still perform decently.
• Regulation Friendliness: There is no point in revenue growth if a city clamps down on STR licensing tomorrow. Check municipal websites for permit caps, mandatory primary-residence rules, HOA restrictions, and pending legislation. A market might look great on metrics but glass-hammered by regulation risk.

Putting together these layers gives you a data-driven lens into potential markets. When one lights up on occupancy, ADR, and supply/demand—and the investability boxes check out—you’re likely looking at a genuine emerging hotspot.

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Tools to Surface Early Signals (and What Each Is Best At)

When you’re hunting for the next hot short-term rental market before everyone else, having the right tools is half the battle. Here are four that give you real early-signal advantages — plus how to use them smartly.

1. AirDNA

This is one of the go-to platforms for STR market data. AirDNA provides access to occupancy rates, average daily rate (ADR), revenue projections, and more for thousands of markets worldwide.

• The Market Score gives a quick snapshot of a market’s strength (on a 40-100 scale) across factors like rental demand, revenue, seasonality, and regulation.
• Best for: Getting a fast sense of “Is this market worth exploring further?”
• Use with caution: The score is directional, not absolute. For smaller or less active markets, the data can be less reliable.
• Pro tip: Use the Market Score as a filter (for example, look for markets scoring 70+), then dig deeper into the raw numbers like occupancy, ADR, and RevPAR before making decisions.

2. Key Data Dashboard

Key Data Dashboard gives you live performance metrics straight from property managers and booking platforms. It’s ideal for checking real-time shifts in booking behavior, pricing, and supply.

• Best for: Tracking how demand is actually moving right now — such as whether bookings are accelerating or if pricing pressure is increasing.
• What it offers: Real occupancy rates, booking windows, ADR, and RevPAR drawn from verified sources rather than estimated models.
• Pro tip: Use Key Data to confirm what AirDNA suggests. If AirDNA signals a strong market and Key Data shows increasing bookings and stable supply, you’ve likely found a solid lead.

3. Beyond Pricing

Beyond Pricing is best known for its dynamic pricing software, but their regular market reports highlight rising destinations you might not see elsewhere.

• Best for: Idea discovery. These lists often reveal “hidden gem” towns or secondary markets that are starting to gain momentum.
• Pro tip: Once a market pops up on Beyond Pricing’s radar, validate it using AirDNA and Key Data to confirm consistent growth and healthy revenue potential.

4. Google Trends and Search Data

Google Trends lets you see what travelers are searching for long before they book. It’s a great free way to gauge future demand.

• How to use: First, search destination-based terms like “Airbnb [city]” or “vacation rental [region].” Then, look at “Rising” or “Breakout” queries — these show markets gaining attention. Compare multi-year trends to spot stable seasonality versus sudden spikes. You should also filter by region to see localized interest.
• Best for: Detecting interest growth early, before it shows up in booking data.
• Pro tip: If Google Trends shows rising search activity but occupancy rates haven’t yet spiked, that’s often a sign you’re early to the opportunity.

Putting It All Together

Here’s the workflow seasoned investors use:

1. Use Beyond Pricing’s roundups to shortlist new destinations.
2. Check those markets in AirDNA to gauge baseline strength and trends.
3. Validate the live data in Key Data Dashboard.
4. Watch Google Trends for growing traveler interest.

By layering these tools, you’ll build a sharper instinct for spotting emerging short-term rental markets before they go mainstream.

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The 4-Part Framework to Identify Hotspots Early

1. Demand Momentum

This is where the story begins: you need to see demand genuinely heating up. Keep an eye on rising search interest for a destination, better average daily rates (ADR) and revenue per available room (RevPAR), and longer booking lead times. Those are all signs travelers are getting excited and ahead of the crowd. When you catch that wave early, you ski down the slope before it gets crowded.

2. Supply Discipline

Here’s where you separate the good from the risky. A promising market isn’t just about growing demand—it’s also about supply not racing to meet it. If new listings are exploding while booked nights remain flat, you’ll quickly face price pressure and lower returns. Favor markets where demand is rising faster than new supply—those tend to have the “sweet spot” before competition kicks in.

3. Regulation & Permit Landscape

Don’t ignore regulations—they can turn a seemingly ideal market into a minefield overnight. Prioritize destinations where short-term rental rules are clear, enforceable, and attainable. Watch for signs of trouble: moratoria, city council proposals, license freezes. For example some cities instituted sudden freezes on new STR licenses, or tightened zoning to restrict BRs in certain neighborhoods. That kind of regulatory whiplash can wipe out your advantage if you’re not watching.

4. Investability & Exit

Finally, think like a business investor, not just a host. Entry price matters: you’ll want to compare what you’ll pay for property against the revenue you project. Factor in financing, insurance costs, property management availability, and resale liquidity. Many tools give you a “market score” and that’s useful—but treat those scores as a starting point, not gospel. Always confirm with local comps and scenario analysis on downside revenue.

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Where to Look: Patterns That Reliably Precede a Breakout

One of the best ways to stay ahead in the short-term rental game is to keep your eyes on markets that are just starting to tick upward. Here are patterns I’ve seen play out again and again in places that “pop” a year or two later than the headlines.

1. Leisure hubs just off the beaten path

You don’t always have to chase the downtown hotspot. Often it’s a secondary or tertiary town near a major gateway city where travellers are looking to escape the crowds but still want convenience. Think about a drive-to lake or mountain town that’s a 90-minute car ride from a big airport rather than a quick hop from a tiny regional field. These places often have rising demand while supply is still catching up.

2. College and medical research hubs

Sure, they may not sound glamorous at first, but towns with a growing university, medical campus, or research park often bring in people who need lodging for conferences, seminars, visiting scholars or families. That type of steady baseline demand can turn into a solid backdrop for short-term rental income when the normal tourist traffic kicks in too.

3. Infrastructure or policy changes as spark points

Here’s where you really get the early-edge: look for towns that are getting a new flight route, a big convention-center expansion, a major park or event venue, or even a new highway that opens them up. These are the kinds of catalysts that drive demand growth before the supply catches on. Also keep an eye on local policy changes. If a municipality just opened up new zoning for short-term rentals or loosened permit rules, that’s a potential green-flag for early-investors.

Why this works

Because those markets are still under the radar. They have enough infrastructure to draw in visitors, but they haven’t yet entered the “everyone knows about it” phase. That means you can find better entry prices, less competition, and less regulatory scrutiny—compared to the hotspot everybody’s chasing.

In short, when you see a place that hits two or more of these signals (local airport expansion, rising university enrollment, new event venue, drive-to leisure appeal) you might just be looking at a breakout market before the crowd catches on.

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Step-by-Step Workflow (Repeatable, 90-Minute Scout)

1. Longlist 10-15 Candidates

Start with broad industry roundups and tools like AirDNA and Beyond Pricing to assemble a list of 10 to 15 markets. Your goal here is quantity first: get enough options that you can then narrow down based on stronger signals.

2. Pull 12–24 Months of Key Metrics

For each market on your list pull at least the past 12 to 24 months of: occupancy rate trends, ADR (average daily rate) trends, RevPAR (revenue per available room), and supply growth on short-term rentals. Then chart the year-over-year changes. You’re looking for upward momentum in demand and a manageable supply curve rather than explosive new listings flooding the market.

3. Check Seasonality and Compression Dates

Look for seasonal swings and identify peak periods (holidays, special events, festivals) that compress supply or drive higher demand. Markets with stable year-round demand or consistent compression windows tend to handle downturns better.

4. Run Google Trends on Destination + Activity Keywords

Use Google Trends to track search interest over time for each destination (city/town) plus common traveler activity keywords (e.g. “lake weekend getaway [place]” or “surf town [place]”). A multi-season upward lift in searches suggests growing interest — it’s a useful leading indicator of rising demand.

5. Regulation Scan

Dive into city or county government websites and recent news for each market. Flag any permit caps, primary-residence-only rules, hefty fines for non-compliance, or sunset dates for licensing. Good emerging markets have regulation that is transparent, enforceable, and investor-friendly — or at least stable and understandable.

6. Quick Investability Check

Do a rough comparison of the median home price (or relevant entry price) in each market versus the projected gross revenue from short-term rental operations. Then stress-test the numbers: what happens if ADR drops by 10 to 15 percent? If the investment still works under conservative assumptions, that market makes the cut.

7. Shortlist 3 Markets & Conduct On-the-Ground Due Diligence

From your list pick the top three markets. Now it’s time for local checks: review HOA rules (if applicable), get quotes for insurance, assess the availability and cost of cleaners and other local labor. Speak (if you can) to local property managers or hosts to verify assumptions. Once this is complete you’ll have markets you know well and feel confident in.

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Red Flags and How to De-Risk

Even the most promising short-term rental market can turn sour if you miss the early warning signs. Before you buy, it’s worth knowing what can quietly wreck an otherwise perfect deal and how to stay ahead of it.

1. Moratoria and Registration Freezes

Cities sometimes pause new STR permits while they rewrite regulations or study housing impacts. That “temporary” freeze can drag on for months or even years, leaving new hosts unable to operate. Before investing, check city council agendas and planning department updates for any mention of short-term rental reviews or caps in discussion.

2. Sudden Tax or Fee Hikes

Occupancy taxes, business license fees, and inspection costs can change fast. Some tourist towns add new taxes to fund affordable housing or tourism boards, which can cut into your margins overnight. Keep a running spreadsheet of local tax rates and update it each quarter so you can model how much extra you’d owe if those rates jumped.

3. Oversupply Without Demand Growth

If the number of active listings in a market climbs more than 30 percent year-over-year while occupancy flatlines, that’s a sign of crowding. In that scenario, even high-performing hosts see bookings fall. Cross-check AirDNA or Key Data reports for booked nights growth to make sure demand is keeping pace with new supply.

4. One-Season Revenue Dependence

Markets that thrive only in summer or ski season can leave you struggling with vacancy and cleaning costs the rest of the year. A quick way to test this is to look at average ADR and occupancy by month. If more than half of annual revenue comes from a single season, you’ll need a plan for off-season cash flow, such as mid-term stays or local business contracts.

5. HOA or Community Hostility

Homeowners’ associations and neighborhood boards can be stricter than city laws. Some have outright bans on short-term rentals, while others enforce quiet hours or parking rules that make hosting difficult. Always read HOA bylaws, talk to local property managers, and search neighborhood Facebook groups to gauge sentiment before closing on a property.

How to Stay Ahead

Set up a simple “market risk watchlist.” Include city council websites, local STR Facebook groups, and newsletters from short-term rental advocacy organizations. Schedule a quick 30-minute review every month to check for any new proposals or shifts in tax or permitting rules. The goal isn’t to avoid risk entirely—it’s to see it coming before everyone else does.

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Build Your Emerging Market OS (Dashboard + Cadence)

Let’s talk about how to build your own “Emerging Market OS” — a system you actually stick to so you’re always ahead of the curve rather than chasing it.

1. Set Up Your Monthly Data Pull

Each month pick a regular time to grab raw numbers. Your go-to tools should cover occupancy, average daily rate (ADR), and revenue per available rental (RevPAR). Also pull supply growth (new listings) matched against demand growth (booked nights). Make a quick table with three columns: “This month,” “Last month,” and “Year ago same month.” That gives you momentum at a glance.

2. Maintain a Google Trends Watchlist

Create a list of destination keywords (city names, top activities, event names) and check Google Trends once a week or once a month. What you’re looking for is a breakout in interest—not just the regular holiday spike but something creeping upward across more than one season. If search interest climbs steadily, it’s a strong leading signal that the market might be warming up.

3. Keep Regulation and News Alerts On

Markets shift fast when regulators step in. So set up RSS alerts or email notifications for zoning changes, short-term rental registration reforms, new tax regimes, and local homeowner association (HOA) policy updates in your target markets. Every time you grab your monthly data pull, glance through the alert list. Has anything major popped up? If yes, flag the market for a closer look or delay.

4. Build a Comps Tracker

For each market you’re eyeing, keep a simple spreadsheet of comparable listings: nightly rates, occupancy % by month, fees, cleaning charges, and guest reviews for any red flags (noise complaints, city fines). Every quarter update at least five new listings. Compare their performance with your own forecasted numbers. If comps are outperforming you expected, you might be underestimating the upside. If they’re underperforming, dig into why.

5. Set the Cadence and Stick to It

• Monthly: Pull your core metrics, update your Google Trends list, check alerts, and rank each market as “Green/Yellow/Red” based on momentum, supply, regulation, and comps.
• Quarterly: Deep dive one step further. Pick your top 3 emerging markets and review additional factors: upcoming infrastructure or events, financing/insurance changes, and exit liquidity.
• Annually: Re-score all your longlist markets from scratch. Ask: Are they still “emerging” or have they moved into “mainstream”? If they’ve saturated or regulation tightened, remove them from your watchlist. Replace with new ones.

6. Make It Visual and Shareable

Create one dashboard page with color-coded markets (green = go, yellow = watch, red = pause). Keep it one page. Use charts like “YoY ADR change,” “New listings % change vs booked nights,” and “Search interest trend.” If you ever want to share with a partner or lender, you already have something clean.

Once you have this system in place and run it consistently, you’ll stop making gut calls and start making early-edge data-driven decisions. You’ll know which markets are heating up before everyone else—and more importantly you’ll know when to stay out.

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Wrapping Up

Spotting the next Airbnb hotspot isn’t about guessing—it’s about building a repeatable system. When you focus on Momentum, Discipline, Clear Rules, and Investability, you’re not just following trends; you’re catching them before they peak. That’s the early edge every serious short-term rental investor needs.

If you’d rather skip the trial and error, Awning can help you find, analyze, and manage profitable short-term rentals with expert data and full-service property management. They already track the metrics, regulations, and market trends that keep investors ahead of the curve.