In 20 Years, Hotels Will Be the Alternative Stay—Not the Standard (And DMOs Need to Catch Up)

Let’s be clear: Hotels aren’t dying—but they are losing their monopoly as the default lodging choice.

By 2045, short-term rentals (STRs) won’t just be mainstream—they’ll be the primary choice in every market. And yet, most DMOs are still stuck in hotel-driven marketing strategies while ignoring the biggest cultural shift in travel: the rise of small businesses.

Because here’s the part no one in traditional hospitality wants to admit: STRs are still primarily small businesses. And the traveler preference for supporting small is not a leftover COVID fad.

☕ The Hotel Industry Is Playing Defense. STRs Are Playing to Win.

Hotels have spent years scrambling to keep up with STRs by:

🔹 Launching their own STR-style brands (Marriott, Accor, and Hilton all have STR divisions now).

🔹 Lobbying for stricter STR regulations instead of adapting their own business model.

🔹 Trying to market their properties as “experiential”—but still offering the same outdated booking model.

Meanwhile, STRs have already won the consumer battle by tapping into what travelers actually want:

🚀 Flexibility—stays that fit them, not a rigid hotel structure.

🚀 Personality—boutique, unique, and hyper-local experiences.

🚀 Space & Comfort—more than just a room—they want a home.

Hotels are still banking on brand loyalty and point systems. STR owners? They’re earning guest loyalty by delivering real experiences.

📉 2️⃣DMOs: If You’re Still Prioritizing Hotels, You’re Ignoring the Future

Most DMOs are still defaulting to hotels because that’s where traditional bed tax dollars come from. But that approach doesn’t reflect how people actually travel anymore.

🔹 STRs aren’t “alternative” anymore—they are the lodging economy. In 2023, STRs accounted for 36% of total lodging demand in the U.S. (AirDNA).

🔹 Small Business Ownership in STRs = Community-Driven Travel. The “support small” movement wasn’t just a COVID trend—it’s a long-term consumer shift. Travelers want to spend their money where it makes an impact.

🔹 Many STR guests don’t even show up in traditional hotel-driven visitor data. If you’re still measuring success only by hotel occupancy, you’re undercounting your actual visitor impact.

It’s not just about acknowledging STRs. It’s about fully integrating them into your destination strategy.

🏠 How DMOs Should Be Preparing (Instead of Playing Catch-Up Later)

Hotels aren’t disappearing. They’re just losing their monopoly. The smart DMOs are already adapting by:

✅ Creating STR-Specific Marketing Initiatives—Destinations like Asheville, Nashville, and Austin are actively marketing STR experiences as part of their tourism strategy, not treating them as an afterthought.

✅ Expanding Lodging Tax Structures to Include STRs—Some states and cities are adjusting policies so that STR revenue contributes directly to destination marketing funds, just like hotels do. This levels the playing field and ensures STR growth supports destination promotion.

✅ Building Destination Loyalty Instead of Just Hotel Loyalty—Instead of directing visitors to specific properties, DMOs need to focus on selling the entire destination experience. Let travelers choose their lodging style while ensuring they stay engaged with your brand, your recommendations, and your experiences.

✅ Leveraging STR Data for Smarter Marketing—Hotels have been the primary data source for years, but STR platforms like Airbnb and Vrbo have insane amounts of traveler behavior insights. Smart DMOs are figuring out how to tap into this data to understand visitor patterns better.

⚡ The Future: STRs as the Standard, Hotels as the Alternative

By 2045, STRs won’t be just another lodging option—they will be the default. Hotels will still exist, but they’ll be playing by STR rules instead of the other way around.

If you’re a DMO and you haven’t built a long-term strategy for integrating STRs into your destination’s visitor economy plan, you’re already behind.

💬 How is your destination handling the STR shift? Is your strategy keeping up, or is it still operating like it’s 2010? Let’s talk.