Hotels vs. Short-Term Rentals in Nashville:
Who’s Winning — and Why It’s Not That Simple
As Nashville’s tourism market continues to thrive, the city’s lodging landscape is evolving rapidly. New hotel towers rise downtown while short-term rentals (STRs) multiply in neighborhoods like East Nashville, The Nations, and Germantown. But as more inventory enters the market on both sides, hosts and hotel operators alike are asking: who’s performing better?
The answer: both are growing — but STRs are outpacing hotels in key metrics like revenue per night and guest value. Here’s a deep dive into how STRs compare to hotels in Nashville’s current market, why travelers are choosing one over the other, and what hosts should do to stay competitive.
May 2025 Performance Metrics: Hotels vs STRs
| Metric | Hotels | STRs |
|---|---|---|
| Occupancy | 73.5% | 66.8% |
| Average Daily Rate (ADR) | $197.40 | $238.12 |
| Revenue per Available Room (RevPAR) | $145.06 | $158.98 |
| Year-over-Year Supply Growth | +4.2% | +10.8% |
Interpretation:
- Hotels are achieving higher occupancy, but STRs are generating more income per night.
- STRs show stronger supply growth, indicating continued demand from both travelers and investors.
- STRs maintain higher ADRs because they offer more space, amenities, and flexibility than traditional hotel rooms.
Why STRs Are Outperforming Hotels (Even With Lower Occupancy)
1. Larger Groups = Bigger Bookings
STRs cater to families, friend groups, and wedding parties — travelers who need space and privacy. A group of 6 booking a 3-bedroom STR often results in a higher total nightly rate than individual hotel bookings.
2. More Amenities = More Value
Travelers often choose STRs because they offer:
- Full kitchens (a major cost-saver)
- Laundry facilities
- Private outdoor space
- Pet-friendly policies
- Unique design and local flavor
Hotels simply can’t compete on these features at the same price point.
3. Event-Driven Pricing Wins
Savvy STR hosts are using dynamic pricing tools to adjust rates for:
- Concerts (Taylor Swift, CMA Fest, etc.)
- Sporting events
- Conventions (NRA, NAMM, Fan Fair)
- Seasonal demand (spring break, summer tourism)
Hotels do this too — but many STR hosts now outperform hotels in rate responsiveness.
What STR Hosts Should Do in Response
✅ Emphasize Unique Selling Points
Your STR’s charm is its individuality. Highlight features like:
- Historic architecture
- Outdoor fire pits
- Art collections or themed décor
- Game rooms for kids
- Work-from-home spaces with fast Wi-Fi
These aren’t just amenities — they’re marketing tools.
✅ Learn from Hotel Calendars
Watch hotel pricing and availability around major events. If downtown hotels are 90% booked for a weekend, raise your STR rates and update your listing title to include event keywords.
✅ Be Smart About Supply Growth
Nashville’s STR market is still growing, but the city is starting to show signs of saturation in some zones. Know your neighborhood’s regulation history and zoning rules. In markets where hotel growth is slowing, STRs with strong branding and local touches have the edge.
Bonus Insight: Extended Stay Advantage
Unlike hotels, many STRs are welcoming longer stays (5+ nights, weekly or monthly). These guests:
- Book further in advance
- Create fewer turnovers
- Are more likely to follow house rules
- Often return for repeat visits
If you have a property that works for mid-term stays (e.g., traveling nurses, remote workers, relocating families), consider updating your minimum stay policies and offering weekly discounts.
Nashville’s travel boom isn’t a passing trend. With new development and event tourism on the rise, the real question isn’t “Will STRs survive?” — it’s “How can STR hosts evolve and outperform?”
Final Thought
The data is clear: smart STR operators who price dynamically, market creatively, and understand their niche are poised to outperform hotels — not just in profit, but in guest experience.