Australia DMO reveals drop in occupancy for short-term rentals but rates stable

A new Australia Destination Managment Organsiation report has released and reveals that while average daily rates (ADRs) for short-term rentals in Australia and New Zealand are showing resilience, occupancy levels are falling sharply.

According to Short-Term Rental Data & Trends for DMOs: Summer 2024-25 ADRs rose in most regions, with April and June 2025 showing the strongest year-over-year gains at $48 and $44 respectively. However, this price strength is being undermined by a widespread drop in occupancy, with regions like Tasmania and South Australia seeing year-over-year occupancy declines of -21 per cent and -17 per cent.

Key findings 

• Occupancy Pacing Behind: Paid occupancy for Q2 2025 is pacing down significantly, with April, May and June seeing YoY drops of -2 per cent, -8 per cent and -5 per cent, respectively.
• Resilient Rates: Despite weaker demand ADRs continue to climb, indicating consumer willingness to pay premiums during peak travel periods like Easter, which shifts to late April in 2025.
• Cyclone Alfred Fallout: Although physical damage was limited the cyclone’s timing in early March has likely discouraged bookings into Q2 for coastal areas.
• Economic Backdrop: Inflation is cooling (2.4 per cent in Feb 2025) but rising interest rates and affordability concerns are keeping discretionary travel in check.
• Shorter Stays, Later Bookings: Booking windows are shortening and stay lengths are trending downward signaling increased traveller caution and last-minute planning.

Strategic recommendations for DMOs:

• Consider value-based messaging and stay-longer promotions rather than across-the-board discounts.
• Focus on shoulder season strategies and targeting higher-yielding visitor segments.
• Tailor messaging around safety and recovery in cyclone-affected areas to help rebuild confidence.

“What we’re seeing is a tale of two markets: pricing remains strong, but demand is softer than usual,” Key Data Dashboard vice president of business development – APAC, Stuart Stacy, said.

“Travellers are still willing to pay for quality but they’re booking later and staying shorter so DMOs and property managers need to adapt quickly – this means shifting from volume-driven strategies to more targeted, value-led campaigns that speak to cautious consumers. Data-led decision-making is no longer optional – it’s essential to staying competitive in a changing landscape.”