Short-Term Rentals: What Is the Real Profitability in 2026?
Is short-term rental still profitable? Full analysis with figures vs long-term rental, impact of 2025-2026 tax and regulatory reforms, and optimization strategies to maximize returns.
Alexandre Fardin
• Étudiant Master 2 GESIIC - Université Paris 1 Panthéon-SorbonneÉtudiant de 5ème année en Master Gestion et Stratégie de l'Investissement Immobilier et de la Construction (GESIIC) à l'Université Paris 1 Panthéon-Sorbonne.
Source: Research thesis by Alexandre Fardin
Program: Master 2 GESIIC - Real Estate Investment Management and Strategy
Institution: Université Paris 1 Panthéon-Sorbonne
Research question: Is short-term rental a profitable long-term investment?
Short-term rentals (STR) attract more and more investors because they promise higher profitability than traditional long-term rental. This article provides a detailed synthesis of an academic thesis focused on the economic viability of STR in 2025-2026, after major tax and regulatory reforms.
Key market figures (2023-2024):
- • 176 million overnight stays in France in 2023 (Eurostat)
- • STR demand up strongly compared with most traditional segments
- • Professional operators target a minimum 6% gross yield
- • Global STR market estimated around $448B in 2023
- • Around 960,000 active listings in France (+60% vs 2019)
1. Market context and evolution
Airbnb and market transformation
Since 2008, Airbnb has deeply transformed the accommodation industry. In France alone, listings grew from roughly 600,000 in 2019 to around 960,000 in 2024. STR growth is connected to the broader expansion of French tourism and the demand for more flexible, home-like stays.
Main stakeholders
- Hosts: private owners and professional investors targeting at least 6% gross returns
- Platforms: Airbnb, Booking, Abritel, charging commissions from 3% to 18%
- Guests: tourists, business travelers, temporary residents
- Service ecosystem: concierge services, cleaning, staging, and channel managers
COVID-19 shock and rebound
STR bookings fell sharply during COVID, then recovered rapidly. This demonstrates both the fragility and the resilience of the model, especially for well-managed assets in high-demand urban and leisure locations.
2. Key success factors for STR investment
Strategic location
Academic and market data consistently show that centrality, transport access, and neighborhood attractiveness directly impact occupancy and pricing power.
Professional operations
Fast response times, standardized processes, and strong guest communication are essential to maintain high occupancy and strong review scores over time.
Dynamic pricing and yield management
Revenue tools (PriceLabs, Beyond, etc.) can optimize rates based on seasonality, local events, and demand curves. In many markets, this drives significant uplift versus static pricing.
Automation and channel management
Tools such as channel managers and automated messaging reduce manual workload and listing errors while improving booking conversion and consistency.
The most stable long-term results usually come from professionalized operations, automation, and data-driven decision-making.
Start free trial3. STR vs long-term rental: practical comparison
In many French cities, a studio can generate significantly higher gross revenue in STR than in long-term rental if occupancy stays above break-even levels.
- Long-term rental: stable cash flow, lower operational intensity
- Short-term rental: higher upside, higher volatility, higher operating costs
- Break-even logic: profitability depends on occupancy, ADR, and variable cost control
International studies also show STR can outperform long-term rental by a wide margin in high-demand neighborhoods, though with stronger exposure to regulation and seasonality.
4. Main advantages of the STR model
- Higher gross yield potential than conventional rental
- Cash-flow acceleration when operations are optimized
- Flexibility of use for owners (especially second homes)
- Asset usage optimization for properties that would otherwise stay vacant for long periods
5. Limits and risks
Financing constraints
Banks often perceive STR cash flows as less predictable than long-term rental income, which can increase financing requirements.
High operating costs
Cleaning, platform commissions, maintenance, consumables, and optional concierge fees can absorb a significant share of gross revenue.
Regulatory pressure
Registration obligations, local quotas, and usage limits can materially reduce annual revenue potential in regulated markets.
6. 2024-2026 regulatory and tax impact
Le Meur law
The law strengthens municipal oversight and can reduce annual rental capacity for primary residences in constrained areas.
Finance law changes
Tax regime adjustments reduce attractiveness for some non-classified furnished rentals and increase the importance of legal/tax structuring.
7. Research hypotheses and findings
Hypothesis 1: STR outperforms under clear conditions
STR can generate materially higher gross returns than long-term rental when location, occupancy, and operating discipline are under control.
Hypothesis 2: Tight regulation weakens margins
New constraints disproportionately affect unstructured operations and primary-residence strategies.
Hypothesis 3: Professionalization is non-negotiable
Data, automation, response-time discipline, and KPI tracking are key to long-term viability.
Hypothesis 4: External shocks matter
STR is exposed to macro shocks (health crises, regulation, tourism cycles), but resilient operators recover faster.
Hypothesis 5: Long-term wealth logic is decisive
The best investors combine cash flow, tax optimization, and capital appreciation over a 10-15 year horizon.
8. Frequently asked questions
What is a realistic STR yield in 2026?
Gross yield can range from around 6% to double-digit levels depending on location, operations, and regulation. Net yield is lower after operating costs and taxes.
What occupancy should I target?
In many urban markets, 60-65% is a minimum target; professional operators often push beyond that through pricing and distribution optimization.
Do I need a concierge service?
For larger portfolios or owners with limited time, professional management usually improves operational consistency and occupancy.
Is STR still viable for 10+ years?
Yes, if approached as a professional business with risk management, compliance, and long-term asset strategy.
Ready to improve your profitability?
Professional operators who use automation, unified channel management, and structured reporting tend to preserve margins over the long run.
Conclusion
Short-term rental can still be profitable in 2026, but easy margins are gone. Tax and regulatory changes have raised the entry bar and rewarded operators with disciplined execution.
The strongest long-term profiles combine strategic location, professional management, dynamic pricing, and continuous adaptation to local regulation.
📖 Access the full thesis
Author: Alexandre Fardin
Program: Master 2 GESIIC (Real Estate Investment Management and Strategy)
Institution: Université Paris 1 Panthéon-Sorbonne | Date: April 2025 | Length: 66 pages
📄 Download Full Thesis (PDF)📚 Selected bibliography
- • Fardin, A. (2025). Is short-term rental a profitable long-term investment? Master thesis, Université Paris 1 Panthéon-Sorbonne.
- • Jover, J., & Cocola-Gant, A. (2022). Short-term rentals and the housing market in Lisbon and Porto.
- • Faye, B. (2023). Time and hedonic value in peer-to-peer accommodations.
- • Ali Avan, A., Baytok, A., Zorlu, Ö., & Toker, M. (2023). Management of Online Sales Channels at Hotels: Channel Manager System.
- • Zervas, G., Proserpio, D., & Byers, J. W. (2017). The Rise of the Sharing Economy: Airbnb impact on hotels.
- • Eurostat (2023). Tourism overnight stay statistics in France.
- • French Law n° 2024-1039 (Le Meur law).
- • French Finance Law n° 2025-127.
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