How Property Owners Can Protect Short-Term Vacation Rentals for Long-Term Success

The short-term rental market continues to grow in response to increased traveler demand for larger, more flexible accommodations and high-end amenities.

Short-term rental properties, which include houses, apartments or condos, are typically rented for stays up to 30 days for vacations, events, temporary housing or business trips. They appeal to travelers looking for more privacy than traditional hotels or larger spaces for big groups and families. Amenities and special conveniences, such as a full kitchen, swimming pool or pet-friendly lodging, remain highly sought after features. Short-term rentals are also an option for people temporarily displaced after a disaster while waiting for repairs or long-term housing.

However, short-term rentals aren’t all reward and no risk for property owners. There are multiple issues and risks to consider and address, including insurance implications tied to commercial property use and evolving local regulations.

The short-term rental market is booming

Vacation homes are the largest segment of the short-term rental market, with as many as 2.4 million vacation rental listings available globally.¹ Online vacation rental platforms like VRBO and Airbnb have contributed to the boom by simplifying the process of listing and renting vacation properties.

In fact, the global vacation rental market is estimated to have generated more than $100 billion in 2024 and should reach more than $20 billion in the U.S. alone in 2025.²

Keys to improving short-term rental risk management

To stay protected, profitable and compliant, short-term rental owners — especially those with multiple properties — need to take proper precautions to reduce their liability and exposures.

Here are some important actions short-term rental owners should follow to improve their risk management and protect their properties, guests and bottom line:

• Conduct regular safety inspections. Property owners should routinely inspect their properties and address possible hazards such as faulty smoke and carbon monoxide detectors, loose railings, unsafe decks, slippery floors and fire risks. Amenities like pools, hot tubs and grills need proper maintenance and to meet safety standards. It is also critical to document safety checks, maintenance and repairs in the event of litigation.

• Communicate clearly with guests. Provide written house rules, safety instructions, emergency contacts and check-in/check-out procedures. Be clear about guest expectations and inform them of restricted areas and features.

• Stay compliant with local regulations. It is important to follow short-term rental laws and regulations to avoid fines, penalties or operational disruptions that can hurt profits. Many jurisdictions, especially those in high-tourism areas, require short-term rental owners to obtain business licenses, permits, pay local taxes and comply with the Americans with Disabilities Act (ADA). Platforms like Airbnb and VRBO may also require proof that properties are properly permitted to be listed on their sites.

• Secure the right insurance coverage. Carefully review your insurance coverage with a broker for business-related exclusions for common risks like guest injuries, property damage, loss of income and pet-related incidents. Owners managing multiple properties may need to secure a commercial property policy with higher liability limits, relevant endorsements and underlying coverage required for umbrella policies.

• Consider other risks and coverage. There are other risks you may want to insure, including workers’ compensation for staff like housecleaners or maintenance workers and cyber liability coverage for personal data exposures.

Contact HUB International’s hospitality insurance experts to learn more about protecting your rental investment. 

¹ AirDNA.com, “2023 Short-Term Rental Statistics You Need to Know,” January 28, 2024.
² HotelTechReport.com, “50 Vacation Rental Industry Statistics that You Won't Believe,” May 9, 2024.