The Short-Term Rental Boom in Europe: Key Insights from Horwath HTL's 2024 Report

Based on findings from Horwath HTL – The Short-Term Rental Market

Introduction

The European short-term rental (STR) sector is undergoing a defining transformation. What began as a niche segment of the accommodation market has evolved into a central pillar of the tourism economy. Fueled by online platforms, low entry barriers, and shifting travel behaviours, STRs have become a dominant force reshaping how people travel, invest, and regulate urban space.

According to the Horwath HTL 2024 report, this market growth is both a sign of progress and a harbinger of deeper structural challenges. While large cities and tourism economies benefit economically, many are now also grappling with over-tourism, resident displacement, and inflated property values. The report highlights the tension between innovation and impact, opportunity and regulation.

This context is critical for Roomismo.com, which provides digital infrastructure for holiday rentals and hotels. Software providers now play a strategic role - enabling hosts to manage listings efficiently and helping them navigate increasing complexity, compliance demands, and pricing volatility.

This article aims to synthesise Horwath HTL's findings and translate them into actionable insights for stakeholders across the short-term rental landscape.

Growth on a Continental Scale

From 2019 to 2023, the STR market in Europe recorded a 72% increase in gross revenue - despite the significant disruption caused by the COVID-19 pandemic. This post-pandemic rebound was not merely a return to form, but an acceleration that outpaced most traditional hospitality segments. As of 2023, the market reached a value of €20.3 billion.

This explosive growth can be attributed to several interrelated trends:

• Technological acceleration – The ubiquity of mobile bookings, channel managers, and AI-powered pricing tools has made STR operations more scalable and attractive to both amateur hosts and professional property managers.
• Changing travel preferences – Guests increasingly favour unique, localised, and private experiences over conventional hotels. This shift particularly appeals to digital nomads, families, and long-stay tourists.
• Democratised hosting – STR platforms have allowed a diverse range of individuals to monetise their property assets. This has led to a broader market and deeper inventory, especially in non-traditional destinations.

Yet the report warns: such rapid expansion carries systemic risks. If not carefully managed, increased supply can outstrip demand and strain local infrastructure. Moreover, as competition intensifies, many hosts may be pressured to lower prices, cut corners, or exit the market altogether if platform fees or regulatory fines squeeze margins.

From a SaaS perspective, platforms like Roomismo play a critical role in ensuring sustainable growth. Tools for regulatory compliance, occupancy analytics, and guest communication are no longer optional - they are essential in maintaining competitiveness and long-term viability.

Five Cities, 70% of Revenue

The report underscores a striking imbalance: five cities - London, Paris, Rome, Madrid, and Lisbon - now account for 58% of total short-term rental supply and a staggering 70% of market revenue across Europe. These cities have become mega-hubs for STR activity due to global tourism appeal, strong infrastructure, and regulatory ambiguity in the early years of market growth.

London: A Financial Engine
London leads in absolute terms, generating over €800 million annually from short-term rentals. The British capital's robust transport links, year-round tourism, and concentration of business travellers create a highly liquid market for rental turnover. Average occupancy rates remain high, and ADR (Average Daily Rate) is climbing steadily, partially due to inflation and partially due to premiumisation of the STR offering.

Paris, Rome, Madrid, Lisbon: Rapid Expansion with Rising Pressure
All four cities have seen STR activity expand more than 50% since 2019. These urban centres attract a blend of leisure and cultural travellers, but also increasingly face resistance from residents and policymakers. For instance:

• Paris has introduced strict caps on short-term stays in primary residences.
• Lisbon temporarily suspended new STR licences in some central neighbourhoods.

Despite this, ADRs across these cities have grown 55% on average since 2019, showing that demand remains robust even as supply growth faces headwinds.

Market Implications
The concentration of revenue in these cities presents a double-edged sword. The potential returns are high for investors and property managers operating in these hubs, as are the operational and reputational risks. Legal scrutiny, social unrest, and shifting zoning laws can drastically alter revenue potential in months.

France and the Market Concentration Challenge

France currently dominates the European short-term rental landscape, accounting for 29% of available beds. This makes it the single largest national market on the continent. This inventory is concentrated in popular destinations such as Paris, Marseille, Nice, Lyon, and Provence and the Côte d'Azur.

The country's dominance reflects a mature tourism infrastructure and high levels of international appeal. France benefits from:

• Strong domestic and international demand
• A well-developed transport network
• A wide variety of leisure destinations, from ski resorts to wine regions

However, this level of market concentration carries inherent risk. Urban cores, particularly Paris, show signs of regulatory fatigue and community resistance. In recent years, the French government has introduced strict controls over short-term lets, especially in major cities. These include:

• Registration requirements for all STR properties
• Primary residence caps (120-day annual rental limit in Paris)
• Local authority enforcement rights

These regulations aim to curb housing shortages and preserve community cohesion, but they also limit potential revenue for hosts and investors.

From a strategic perspective, operators in France must now think beyond the core cities. Secondary markets and rural tourism regions offer untapped potential but require more sophisticated yield and occupancy management to remain profitable. This is where automation and intelligent reporting become powerful differentiators.

Winners and Losers in the STR Ecosystem

Horwath HTL's report sharply contrasts the STR market's headline growth and the underlying disparities emerging across regions. While some cities and countries are thriving, others are slipping into stagnation or decline.

Who's Winning?

• United Kingdom, France, Spain, Italy, Portugal: These five markets are responsible for 70% of all overnight STR stays in Europe.
• Cities such as Dublin are among the most lucrative for hosts, thanks to high ADRs and consistent occupancy.
• Coastal destinations and tourist hotspots continue to perform strongly, especially in summer-driven economies like Greece.

Who's Struggling?

• Countries like Czechia and Estonia report declines in available STR properties, overnight stays, and occupancy rates.
• These declines may reflect a combination of market saturation, overregulation, and limited demand elasticity.
• Smaller markets also lack the brand recognition or tourism infrastructure to compete with Western European giants.

This polarisation of performance raises important questions about market sustainability. Regional markets may fail to realise their full potential without targeted support, even as larger cities push toward overcapacity.

Regulatory Pressures and Social Pushback

One of the most critical insights from the Horwath HTL report is that the STR boom is beginning to clash with social and political realities. In nearly every major European city, the rapid expansion of short-term rentals has triggered public backlash.

Key Concerns Include:

• Loss of residential housing stock to STR conversions
• Rising rental prices for long-term tenants
• Over-tourism and community disruption in historic districts
• Tax avoidance and grey-market activity among unregistered hosts

The response from local governments has varied. Some cities have introduced licensing caps, zoning restrictions, or freezes on new STR permits. Others have increased tax burdens, especially in high-traffic tourist zones.

Yet, the report argues that piecemeal regulation at the municipal level is not enough. It calls for national frameworks that:

• Recognise the structural role of STRs in modern tourism.
• Provide clear, enforceable rules for hosts and platforms.
• Balance commercial opportunity with community well-being

For property managers and tech providers, these trends demand adaptability. At Roomismo, we recognise that compliance is no longer a one-time exercise but an ongoing, evolving process. Hosts require systems that can automatically update to reflect local laws, alert users of non-compliance risks, and guide decision-making through data.

In this shifting landscape, knowledge is power, and digital tools are now essential in protecting profitability while respecting local ecosystems.

Why National Regulation Matters

The Horwath HTL report strongly emphasises that city-level regulation is no longer sufficient to manage the scale and complexity of the European STR market. As more urban centres face resident protests, housing pressure, and infrastructure strain, it's become clear that a coordinated national approach is necessary.

Why the Local Model Is Breaking Down:

• Cities such as Amsterdam, Paris, and Barcelona have introduced caps, but enforcement is patchy.
• Inconsistent rules across municipalities confuse hosts and platforms alike.
• Some local governments lack the resources to audit listings or collect relevant taxes effectively.

In response, countries like France and Portugal have started implementing national frameworks, defining who can rent, under what conditions, and for how long. These policies are designed to:

• Prevent the hollowing-out of city centres
• Reduce illegal listings
• Increase tax compliance

Key Metrics for the STR Market in 2023

The quantitative data from the Horwath HTL report provides critical context for understanding where the STR market stands today - and where it may be heading.

Core Highlights from the 2023 European Market:

• €20.3 billion in gross STR revenue
• 72% growth in revenue from 2019 to 2023
• 9% increase in available STR capacity (despite the pandemic)
• 55% increase in Average Daily Rate (ADR) across capital cities
• Five countries account for 70% of all overnight stays
• London alone generates over €800 million annually in STR revenue

These figures confirm that demand has not just recovered post-COVID - it has intensified. At the same time, such rapid expansion introduces volatility, particularly in pricing and occupancy levels. Operators who rely solely on manual processes or static pricing models are at risk of underperformance.

For Hosts and Managers:

• Monitoring ADR trends is now vital for profitability
• Staying competitive means investing in yield management tools
• Occupancy gaps must be managed through predictive booking strategies

With Roomismo, we focus on providing data-driven automation, helping property owners adapt to seasonal and economic shifts. Our users gain access to real-time booking analytics, multi-calendar sync, and other, ensuring they are not only keeping up - but getting ahead.

Implications for Holiday Rental Software Providers

The insights outlined in the report don't just apply to property owners and investors—they have deep implications for the entire STR ecosystem, especially technology providers like Roomismo.

The Market Is Demanding More from SaaS Platforms:

• Scalability is no longer a luxury - it is essential. Hosts managing multiple listings across different regulatory environments need centralised dashboards and unified reporting tools.
• Compliance integration is becoming a key differentiator. Features such as local tax filing support are in high demand.
• Guest experience is a growing priority. The STR market is maturing, and guest expectations now mirror those of hotels - cleanliness, professionalism, seamless communication.

SaaS platforms are no longer seen simply as administrative tools. They are now strategic enablers. They empower small-scale hosts to behave like professional operators, and allow mid-size operators to scale efficiently without sacrificing compliance or guest satisfaction.

At Roomismo, our roadmap reflects these realities. We continue to invest in features that bridge operational efficiency and guest-centric hospitality, while staying attuned to the legislative shifts shaping the European rental landscape.

In short, this is no longer a side-industry. The STR sector has become a core segment of the tourism economy, and the tech stack supporting it must evolve accordingly.

The Way Forward for Hosts and Investors

The findings of the Horwath HTL report make one thing clear: the short-term rental sector is no longer the domain of trial-and-error hosting. It demands a disciplined, data-driven, and scalable approach. For hosts and investors alike, this means evolving from opportunistic listings to long-term asset management strategies.

Key Shifts in Mindset:

• From passive income to active optimisation – Simply listing a property is no longer enough. Success now hinges on occupancy rate management, review scores, dynamic pricing, and service responsiveness.
• From growth at all costs to sustainable growth – Cities are becoming stricter with licences and noise control regulations. Responsible hosting is not just ethical—it is profitable.
• From individualism to professionalisation – Investors are forming STR portfolios, hiring managers, and implementing technology stacks akin to traditional hotels.

Roomismo is designed to support this transition. Our platform enables operators to move beyond ad hoc decisions by offering clear metrics on guest demographics, seasonal trends, and profitability per channel. Informed strategy replaces guesswork - and in a market that is rapidly professionalising, this is no longer optional.

Greece in the European STR Landscape

Greece stands at a strategic crossroad in the STR sector. With its stunning coastline, rich heritage, and year-round tourism appeal, the country is naturally positioned for strong short-term rental performance. Yet, it also faces unique challenges that demand attention.

Strengths:

• High international demand, especially from European and North American travellers
• Strong domestic tourism during shoulder seasons
• Flexible housing stock that supports conversion into STRs
• Emerging regional destinations beyond the main islands

Pressures:

• Urban saturation in Athens and Thessaloniki
• Limited regulation enforcement in rural and island areas
• Seasonality-driven strain on infrastructure and service provision
• Rising local opposition to STR dominance in key neighbourhoods

The Greek government has already signalled its intention to tighten regulatory oversight, particularly around tax declarations and commercial-scale operations. This places increased responsibility on hosts to ensure compliance.

At Roomismo, we support Greek property managers and hosts through localised solutions tailored to the Greek market. This includes integration with Greek tax reporting systems, multilingual guest communications, and support for fragmented ownership structures common in family-run properties.

Moreover, Greece represents a template for emerging markets - balancing enormous tourism potential with the need for sustainability. Roomismo is actively working with local partners to build the next phase of scalable, compliant, and community-conscious short-term rentals in the region.

Conclusion

The European short-term rental market has never been more vibrant - or more volatile. As the Horwath HTL report illustrates, growth is accelerating, regulation is tightening, and the gap between winners and losers is widening.

This is not a market for the unprepared. Success now requires foresight, adaptability, and the ability to operate with hotel-grade professionalism. Hosts and investors must align with tools and platforms that anticipate change rather than react to it.

At Roomismo, we are committed to helping holiday rental professionals across Greece and Europe thrive in this new reality. By combining smart technology with local insight, we enable our clients to grow sustainably, stay compliant, and deliver exceptional guest experiences - regardless of how the market shifts.

As Europe continues to redefine what responsible short-term renting looks like, Roomismo will be here - building the tools to power that transformation.

5 Unique FAQs

1. What is driving the growth of the short-term rental market in Europe?
The rise of digital booking platforms, changing travel preferences, and post-pandemic tourism recovery are fuelling the STR sector's expansion across Europe, as highlighted in the Horwath HTL report.

2. Why are cities like London and Paris dominating the STR landscape?
These cities offer strong tourism infrastructure, year-round demand, and large inventories, accounting for the majority of STR revenue. However, they also face regulatory scrutiny due to overtourism and housing pressure.

3. How are governments responding to short-term rental growth?
Many European cities and countries are introducing stricter regulatory frameworks to manage licensing, taxation, and housing supply impacts, aiming to strike a balance between economic benefits and community needs.

4. What does this mean for hosts and property investors?
Operators must shift from casual hosting to professionalised, data-driven strategies. Tools that support compliance, pricing intelligence, and guest experience are essential for long-term success.

5. How does Roomismo support STR operators in this changing market?
Roomismo offers a suite of tools tailored to the European market, helping hosts stay compliant, optimise operations, and scale sustainably, with specialised support in markets like Greece.