The short-term rental (STR) sector is on the cusp of a big shift in how people search for stays. But collectively the key players are scratching their heads.
The problem is, no one knows to what extent artificial intelligence (AI)-powered search and (eventually) distribution will disrupt traditional booking patterns, or more importantly, which large language models (LLMs) will ultimately dominate.
For now, LLMs such as ChatGPT and Claude are jostling for position as they test the consumer appetite for advertising. Google is also experimenting with advertising in AI mode. This early stage of development could pave the way for startups to step in with products that support rental managers.
Early signals
The advice from leading digital search expert Graham Donoghue is simple: Act now and hedge your bets.
“This is not a fad. This is not a bubble. There's an arms race, so you should understand how to play the game to participate,” he said.
“The LLMs are still trying to figure it all out. They're all slightly different. Our philosophy very much is we need to be visible. We need to make sure when the LLM bots come knocking on our front door, we're open and we're inviting them.”
While Phocuswright research found that travel search via LLMs more than doubled between the first and second half of 2025, traffic remains comparatively small.
Donoghue, who is CEO of U.K.-based Forge Holiday Group, which operates brands including Sykes Holiday Cottages and Forest Holidays, puts the figure at 7% of traffic, including 6% from Google and Microsoft Bing AI overviews (also known as zero-click search results) and 1% directly from LLMs.
Property management specialist Pass the Keys shared a similar figure with PhocusWire. Head of marketing David Judd estimates zero-click results contribute 8-10% of traffic. Like Donoghue, he urges the sector to adapt.
“If you're not investing time in it, your business will cease to exist in about two years,” he said. “It's one of these things that comes along every once in a while that you can choose to do or not to do. This one, you've got no choice. It's fundamentally changed the search landscape, the purchasing heuristic.”
Why it matters
The STR sector stands to benefit from AI because direct bookings have room to grow. According to a recent report from property management software Hospitable, nearly four in 10 hosts (38%) reported receiving no direct bookings in 2025, while nearly half (48%) received 1%-10% of bookings directly.
Research from Hostaway in its 2026 Short-Term Rental Report found that although 70% of operators have a direct-booking website, nearly two thirds (62%) get less than a quarter of their bookings through direct channels, and 18% receive none at all.
According to short-term rental platform Simply Owners, 61% of its owners get over half of their bookings directly, but 60% said this share hasn't increased over the last year.
When asked which trend will most impact their business in 2026, 17% of hosts cited direct bookings, Hospitable said in its report. The largest share (25%) chose smarter automation and AI as the top trend.
The attribution game
Pass the Keys’ Judd believes STR companies now need to “rearchitect” both their websites and the user journey. However, adjusting to the new world of AI-powered search isn’t for the faint-hearted.
In the same way brands used platforms like Hitwise in the early web days, they now need to embrace new tools.
Donoghue said Forge uses different methods to track referrals, and said it was even possible to trace zero-click results from AI overviews. Search engines are also starting to shed light on how brands appear in overviews, with Microsoft introducing AI Performance in Bing Webmaster Tools in early February.
“For the first time, you can understand how often your content is cited in generative answers, with clear visibility into which URLs are referenced and how citation activity changes over time,” the company wrote in a blog post.
Forge also uses new tools like Peec AI.
“We take 2 or 3 million keywords, then build long-form prompts out of those keywords to generate 2,000 to 3,000 prompts we think are the most appropriate prompts—because people are having conversations. Then we track them and look at our share,” said Donoghue. “It's new and emerging, and it's buggy, but my counsel is you have to monitor it.”
Pass the Keys sets up specific channel groups on Google Analytics, because the “search engines themselves are slow to identify the AI channel,” Judd said.
“We've noticed an increase in direct traffic and organics, but it's probably not [enough] to compensate for the 15% you might be dropping on traditional search,” he said.
“As we know in marketing, sourcing and attribution have always been an absolute nightmare. There's the age-old quote: ‘50% of my marketing is effective, I just wish I knew which half.’”
Democratizing search
The generative AI revolution is behind a new wave of startups in the STR space, including HostAI, a PhocusWire Hot Travel Startup for 2026. The company works with vacation rental managers to help them grow their direct bookings.
“I started this business because I think AI is going to be a massive tailwind for direct distribution,” said CEO Amirali Mohajer. “There are two reasons. A lot of people are shifting from Google search to AI travel planning. The second is it levels the playing field in terms of distribution capability.”
He said the amount of traffic clients get from AI platforms has “grown 24x year over year” and currently represents a “high-single-digit” percentage of overall traffic.
“Obviously, it started from a small base, but it's becoming a meaningful channel. The traffic that does come through is a very high-intent traffic, so it converts better than organic, because [the user] has already done quite a bit of consideration and option comparison,” Mohajer said.
“There's still a lot of questions around how this whole field is going to shape up. It's important for us to move the needle for our clients in that direction,” he said. “The contribution is more when you have unique inventory, when it's interesting assets that can be differentiated.”
Entering the consideration stage of the funnel
Most rental homes tick the “unique” or “interesting” boxes, so they have an advantage in the AI world, according to Annie Munro Sloan, co-founder and CEO of The Host Co, a PhocusWire Hot Travel Startup for 2024.
Through The Host Co, a retail solution that allows hosts to sell products and services in short-term rental spaces, Munro Sloan is on a mission to help the sector tell more stories.
Clients sell everything from extra firewood and baby equipment, to services such as Reiki healers or mobile tattoo artists—even IV hydration. Romance packages are also popular and can include fake flower petals on the bed and flameless candles.
“Those stories are what get people to book, and this does relate to AI … those stories get someone into the consideration funnel very quickly,” she said. “The way that LLMs are working, it's the top of the funnel … that is when the shortlist becomes much more important. You have to have specificity for the LLM to grab on to.”
Pierre-Camille Hamana, founder and CEO at Hospitable, agrees.
“More travelers are starting to use AI in a conversational way, asking very specific questions about where to stay, what fits their needs and what they can trust. That favors detail over brand awareness,” he said.
Added experiences are also elements that feed into guest reviews, which are another influential source for LLMs. Yet Sloan notes that the industry will eventually arrive at the agentic layer, rather than the “top of funnel.”
Navigating an uncertain landscape
Agentic models have progressed significantly in recent weeks, with a proposed new “WebMCP” standard from Google and Microsoft and Google's Universal Commerce Protocol launch underscoring the pace of innovation. The more pressing concern for the STR sector, however, will be adapting to the new advertising models working their way into the LLMs.
“The unknown for us is, as soon as paid media comes into the LLMs, what then happens?” said Forge’s Donoghue, who is exploring beta programs despite barriers for companies that are solely U.S.-based.
With momentum building, it seems likely AI-native search will soon transform into a measurable acquisition channel. The STR companies that treat it like a viable performance channel earlier than later will gain an advantage in the long run.
“Once the dust settles, I could see 20% of our clients' bookings coming from traffic referred by AI,” Mohajer said. “In five years, another 15%-20% from transactions that come through AI apps.”