As inflation continues to impact multiple sectors, short-term rental (STR) operators are facing rising expenses in core operational areas. At FIBI Vacation Rentals, we recently conducted a comparative analysis of several properties in our portfolio to assess year-over-year changes in revenue and costs for the months of May and June. Here’s what we found—and how we’re responding.
Key Findings: STR Revenue and Expense Trends
When comparing May and June 2025 to the same months in 2024, the data revealed some important trends:
- Revenue Growth: An 8% average increase year-over-year
- Cleaning Expenses: Up by 24%
- Supply Costs (e.g., toilet paper, paper towels, linens): Up by 37%
These figures highlight that while top-line revenue is growing, operating expenses are increasing at a much faster rate, directly impacting net operating income.
What’s Driving Higher STR Costs?
- Cleaning Services
- Several factors have contributed to the 24% rise in cleaning costs:
- Replacement of underperforming vendors with higher-quality cleaners
- Price increases from existing cleaners due to their own rising costs
- Several factors have contributed to the 24% rise in cleaning costs:
Maintaining high cleaning standards is non-negotiable in the STR industry. At FIBI, we made a deliberate decision to invest in better-performing cleaning teams to protect guest satisfaction and long-term listing performance.
- Guest Supplies
- A 37% increase in supply costs can be attributed to:
- General inflation in goods such as toilet paper, paper towels, and linens
- Increased guest usage, leading to higher order frequency
- A 37% increase in supply costs can be attributed to:
These essentials directly affect the guest experience. As such, cutting corners is not a viable option.
STR Revenue Performance Remains Strong
An 8% RevPAR (Revenue per Available Room) increase is aligned with the broader industry trend of steady growth, even as the STR market matures. While this rate is slower than historical norms, it still outpaces general GDP growth—a signal of continued sector strength and investor appeal.
FIBI’s Response: Tackling Inflation Through Smarter Operations
To protect margins without compromising guest satisfaction, we’re rolling out a cost-efficiency initiative focused on reducing supply shrinkage. By leveraging our nationwide portfolio, we are:
- Benchmarking supply costs per guest per night across markets and vendors
- Identifying anomalies that may signal waste or inefficiency
- Adjusting procurement strategies and vendor relationships based on performance
We believe these efforts will help normalize expense ratios and boost net income across our managed portfolio.
Final Thoughts
Inflation may be the new normal, but proactive management can preserve, and even enhance, profitability. At FIBI Vacation Rentals, we’re committed to delivering strong returns for our owners through data-driven operations and strategic resource allocation.
Stay tuned for a follow-up report on the outcomes of our supply and cleaning cost initiative.
If you’d like, I can help you publish this to your website or tailor it for email marketing or social media distribution. Let me know.
Want to see how FIBI protects STR owner returns? Book a Call today.
