Palm Springs Q2 Market Report 2025

Palm Springs, Market Reports, Investors

Palm Springs Q2 Market Report 2025

Published on Aug 04, 2025

Kevin Ogilvie

Regional Manager of Business Development

Dear Partners,

We hope you have had a productive second quarter and a successful end to the season here in the desert. Natural Retreats is eager to continue sharing short-term rental data and our insights into its relevance to the Palm Springs market. This overview provides an analysis of key performance indicator trends for the second quarter of 2025 compared to the same period last year.

Report Sections

Market Overview

Market KPIs

Glossary

Market Overview

The Palm Springs vacation rental market demonstrated resilience in the second quarter of 2025, despite general economic uncertainty and evolving travel patterns. Visitor demand remained robust, supported by the city's enduring reputation as a Winter retreat and its unique architectural/design property offerings. Although property supply has remained similar to last year, travelers continue to prioritize high-quality, professionally managed homes—especially in desirable locations. This was seen in our festival season during Q2, demonstrating that our region remains a strong player in the industry, successfully hosting well-attended international events.

Overall, the second quarter revealed positive momentum across key performance indicators. Increases in Average Daily Rate (ADR) and Revenue Per Available Rental (RevPAR) indicate that well-positioned properties are yielding substantial returns. As travelers become more discerning, homes featuring premium amenities, thoughtful design, and exceptional service are emerging as the top choices. Our desert market has remained a sought-after retreat, offering visitors the finest experiences in rest and relaxation.

Q2 2025 Key Performance Indicators

The Data

This data was sourced from 57 property managers with +/- 1,300 properties, all of which are located within Palm Springs city limits.

Average Daily Rate (ADR)

Average Daily Rate:

The Palm Springs market has experienced a robust 6.5% year-over-year increase in ADR for the second quarter of 2025, indicating sustained demand for high-quality vacation rentals. This growth has been consistently driven by a stronger festival season, with positive performances in May and June, slightly exceeding last year’s rates.

Market Occupancy

Occupancy:

Overall, Occupancy for Q2 2025 saw a 1.1% decrease. However, we experienced encouraging improvements in April during our festival season, which yielded a 10% increase, indicating a stronger demand in bookings from festival-goers compared to previous years. Although Occupancy in May and June showed slight declines relative to last year, the overall outlook remains positive.

Adjusted Revenue per Available Rental (RevPAR)

Revenue Per Available Rental (RevPAR):

RevPar has seen a 5.4% year-over-year increase, indicating improved monetization of available rental nights. April generated our largest Occupancy gain, while May and June experienced a slight decline; however, the overall ADR remained higher for both months. RevPAR, which combines Occupancy and Rate Performance, offers a comprehensive view of the rental's earning potential.

Natural Retreats vs. Palm Springs Market – Q1 2025

Natural Retreats Vs Market Q2 2025 Palm Springs

Natural Retreats has continually led higher than the broader market in terms of adjusted RevPAR—a crucial performance indicator reflecting revenue performance. This strong performance is primarily attributed to the higher quality homes that Natural Retreats represents in the region. By being selective about our inventory, we can command higher ADR compared to the market and provide exceptional services to both homeowners and guests. Notably, Natural Retreats consistently outperformed the market throughout Q2, with the most significant increase occurring in April. We also maintained our edge over the market in both May and June.

The Palm Springs market remains resilient and valuable for vacation rental owners, particularly those aligned with expert property management. As a trusted local operator, Natural Retreats aids homeowners in optimizing both occupancy and revenue through dynamic pricing, luxury guest services, and attentive care.

KEY-DATA KPI DEFINITIONS

Glossary

ADR (Average Daily Rate) measures the average Unit Revenue paid by guests for the Guest Nights in a given time period. ADR = Unit Revenue (Nightly) / Guest Nights.
Adjusted Paid Occupancy calculates the percentage of Guest Nights out of the total nights available for guests to book, or the Nights Available. Adjusted Paid Occupancy = Guest Nights / Nights Available.
Adjusted RevPAR (Revenue Per Available “Room”) is calculated by multiplying the Adjusted Paid Occupancy % by the ADR. A critical KPI for measuring revenue performance, Adjusted RevPAR takes into account both the average rate at which you booked the property (ADR) and the number of nights it was booked less owner nights and holds (Adjusted Paid Occupancy). This provides a better indicator of overall performance when compared to looking at the ADR or the Occupancy alone. Adjusted RevPAR = Adjusted Paid Occupancy % x ADR (or) Total Unit Revenue / Total Available Paid Nights in a given period.

Partner with Natural Retreats

We’re actively seeking partnerships with real estate professionals who want to offer added value to their clients. Whether your buyers are exploring vacation home investments or sellers who need a compelling income story, we’re here to help with:

Complimentary revenue projections
Pre-market rental assessments
Seamless onboarding for new homeowner clients
Consultation of current short-term rental regulations

Natural Retreats provides expert vacation rental management designed to drive returns and preserve property value. We're actively partnering with local agents to help buyers and sellers unlock the full potential of short-term rentals.

Learn More

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Discover how partnering with Natural Retreats can help you succeed. Our Homeowner Experience Guide includes all you need to know about vacation rental management in destinations.