Short-Let Highlights for 2025: Successes, Strengths, and Why This Makes Smart Investment Sense
As the financial year closes, it’s been a strong and resilient performance from our Short Term Lets (STL) business. Historically, the market has, post the Pandemic, proved challenging and often unpredictable but guiding our investors to the right properties in the right areas has showcased our expertise, value add and in the returns they enjoy.
As we move through 2025, the short-let market continues to showcase resilience and profitability. The latest data confirms strong trends in income growth, longer stays, and a successful shift toward more lucrative booking sources. These factors highlight why investing in STL rentals remains a clever business decision for property owners and investors alike, especially when you consider returns could be twice as much as the so called AST option.
Key Successes in 2025
Stronger Revenue Growth
Looking at highlights, overall income has surged by 18.58%. This suggests a growing preference for higher-value bookings, with guests willing to pay more for quality accommodation and longer stays. Additionally, income from actual arrivals has increased by 11.50%, reinforcing the trend toward higher-value, more sustainable rental income.
Longer Stay Durations
The average stay length has increased by 28.45% for bookings taken and 35.57% for actual arrivals. Longer stays reduce operational costs by minimising turnover, lowering maintenance expenses, and ensuring more stable revenue streams for property owners. Additionally, long-term guests tend to be more responsible, leading to fewer damages and a smoother hosting experience. On this demographic, our model does very well with the vast majority of our bookings being for business travellers.
Shifting to More Profitable Booking Channels
One of the most significant strengths of 2025 has been less reliance on Online Travel Agencies (OTAs) such as Airbnb and Booking.com. Here’s how the booking landscape has evolved:
● OTA bookings have decreased by 14.81% for new bookings and 22.55% for actual arrivals.
● Direct bookings have increased by 24.38% for new bookings and 37.23% for arrivals.
● Relocation agent bookings have surged by 104.68% for new bookings and 30.67% for arrivals.
This shift is crucial because OTAs charge significant commission fees (Airbnb at 15% and Booking.com at 18%). By increasing direct and relocation agent bookings, property owners can maximize earnings and maintain greater control over their guest placements.
While relocation agents also charge a commission, managing agents negotiate each booking to maximise landlord returns. Since they control pricing, commissions are built in. With longer average stays (54.7 days vs. 9.2 on Airbnb and 7 on Booking.com), landlords benefit from significantly higher overall returns.
Why Short-Term Rentals Make Smart Investment Sense in 2025
Higher Profit Margins – With more bookings coming from direct and relocation agent sources, short-term rentals are becoming even more profitable, eliminating unnecessary commission fees.
Consistent Demand for Extended Stays – The rise in longer-term bookings ensures steady occupancy, reducing gaps between guests and maximising property utilisation.
Flexible and Scalable Business Model – Unlike traditional long-term lets, short-term rentals allow owners to adjust pricing dynamically, capitalising on seasonal trends and special events.
Increased Guest Satisfaction and Loyalty – Direct and relocation bookings allow better matching of guests to properties, leading to higher satisfaction rates, better reviews, and increased repeat bookings.
Diversified Revenue Streams – By attracting corporate clients, relocation agencies, and leisure travellers, short-let properties offer multiple income sources, making them more resilient to market fluctuations.
Conclusions
The 2025 short-let market is proving to be a powerhouse for investment, with income growth, longer stays, and a shift to direct bookings driving our profitability.
By reducing reliance on OTAs, maximising high-value guests, and capitalising on longer stays, property owners are setting themselves up for long-term success. Investing in short-term rentals continues to be a savvy financial move, delivering flexibility, strong returns, and sustainable growth - and by comparison with AST has the potential to be the more lucrative of the two.
Your Next Step in Property Investment
Whether you’re looking to expand your portfolio or make your first investment, we make the process effortless. With expert guidance, a hands-off management approach, and access to high-demand rental markets, Residential Estates provides everything you need to succeed in property investment.
Get in touch today to explore our latest opportunities and start building a profitable, stress-free property portfolio.
