Hotels vs. Short-Term Rentals in Nashville:

As Nashville’s tourism economy continues to surge, the interplay between hotel supply and short-term rentals (STRs) has become more complex — and more collaborative — than it may seem on the surface. Hosts often worry that a new hotel opening nearby will siphon off guests. Meanwhile, hotel operators eye the growth of STR listings as a competitive threat. But the latest research suggests the relationship is more mutual adaptation than all-out war.

Let’s dig into what’s really happening in the data — and what it means for Nashville STR hosts.

Research Snapshot: What the Numbers Show

Several recent academic and industry reports have studied how changes in one lodging sector affect the other. Here are some of the most insightful findings:

1. STR Supply Affects Hotel Pricing — Slightly, But Significantly Over Time

A 2022 Cornell University study examining large urban markets found:

• A 1% increase in STR supply correlated with a 0.05% decrease in hotel ADR (Average Daily Rate).
• In high-demand markets like Nashville, this impact can accumulate as STR listings grow year-over-year.
• Hotels are especially price-sensitive when STRs are clustered near downtown or near event venues.

2. Hotel Demand Helps STRs During Peak Seasons

From AirDNA and STR Global reports:

• STR occupancy and nightly rates increase significantly during hotel sell-outs — typically during big events like CMA Fest, NFL games, or major conventions.
• In May 2025, Nashville STR occupancy surged to over 80% during Taylor Swift concert weekend, while hotels in downtown hit 95% and sold out — showing STRs absorbed overflow demand.
• STRs saw a 25–40% spike in ADRs on high-demand weekends due to increased traveler volume.

3. Hotel Development Can Create Temporary Local Downturns for STRs

From a 2023 study published in the Urban Economics Review:

• In neighborhoods where large hotels were built, STR bookings declined 4–7% in the immediate months following a hotel opening.
• However, STRs that focused on unique amenities or longer stays saw a faster recovery than generic listings.
• The impact was most noticeable in areas that previously had no hotel supply at all.

Nashville’s Unique Dynamics

In Nashville, the situation is nuanced. The city is seeing rapid hotel growth — over 2,000 new hotel rooms have opened or are under construction as of mid-2025. Yet STR supply is also growing, especially in outlying neighborhoods like East Nashville, The Nations, and Madison.

STR Snapshot (2025, YTD):

• Occupancy: 66.8%
• ADR: $238.12
• Supply Growth YoY: +10.8%

Hotel Snapshot (2025, YTD):

• Occupancy: 73.5%
• ADR: $197.40
• RevPAR (Revenue per Available Room): $145.06

Despite more competition, STRs continue to outperform hotels on ADR and RevPAR, likely due to their ability to accommodate larger groups and provide differentiated experiences.

Key Takeaways for STR Hosts

1. Hotels Aren’t the Enemy — They Signal Demand

When new hotels open near you, it’s not always a bad sign. In fact, it usually means:

• A spike in local tourism demand is expected
• Developers are confident the area will draw travelers long-term

This can be a green light to optimize your STR for premium pricing, especially during the opening months of hotel marketing campaigns.

2. Dynamic Pricing Tools Are Essential

Tools like PriceLabs, Beyond, or Wheelhouse can help you:

• Match hotel pricing trends
• Capitalize on local event spikes
• Adjust rates when hotel competition ramps up nearby

3. Highlight Your Unique Value

Hotels can’t replicate many STR features:

• Multiple bedrooms
• Full kitchens
• Outdoor areas (yards, decks, hot tubs)
• Pet-friendliness
• Personalized, local design

These are not just perks — they are differentiators. Build your listing around what hotels can’t offer.

4. Use Hotel Data to Predict Your Own Demand

Many hotels publicly share their availability calendars and event packages. Use this information to:

• Raise your rates during conventions
• Prepare for price competition during hotel soft openings
• Create marketing campaigns that target overflow guests (e.g., “Hotels sold out? Stay here with a kitchen and patio!”)

Final Thought: STRs Are Part of Nashville’s Lodging Ecosystem

Rather than trying to “beat” hotels, STR hosts should understand how the two sectors interact — and position their listings to complement and benefit from hotel activity. Nashville’s lodging market isn’t zero-sum. It’s a network — and STRs that adapt, differentiate, and market intelligently will thrive alongside even the biggest hotel chains.