Palm Springs, Market Reports, Investors

Palm Springs 2026 Q1 Market Report

Published on Apr 20, 2026

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Kevin Ogilvie

Regional Manager of Business Development

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Dear Partners,

With Q1 of 2026 behind us, Natural Retreats Palm Springs would like to share several key market observations. We remain committed to providing relevant short-term rental data along with insights specific to the Palm Springs market. This quarterly market analysis reviews key performance indicators from Q1 2026.

 

 

Report Sections

Market Overview
Market KPIs
Glossary

Market Overview

In Q1 of 2026, the combined performance of ADR, occupancy, and RevPAR highlights a stable and competitive market with encouraging dynamics for both Palm Springs and Natural Retreats in the region. The Market demonstrated steady ADR growth, in January and March, while accepting a slight decline in occupancy, indicating a strategic shift toward rate optimization over volume. This tradeoff led to a modest dip in RevPAR earlier in the quarter, though March showed improvement, signaling strengthening performance as demand peaked. Meanwhile, Natural Retreats maintained a significant ADR premium throughout the quarter and successfully grew occupancy year over year with longer stays, especially in February and March. This combination of higher rates and improved occupancy drove consistent RevPAR gains across all months. Notably, while Natural Retreats still leads across all key metrics, some softening in ADR, particularly in peak March, suggests slight normalization in longer stays, while Palm Springs steady rate growth and stable late-quarter occupancy point to emerging pricing power. Overall, the data reflects a healthy market where Direct is gradually strengthening its position through disciplined pricing, and Natural Retreats continues to perform strongly by leveraging both premium rates and occupancy gains.

Key Performance Indicators

The Data

This data was sourced from Key Data, a third-party short-term rental analytics provider sourcing authoritative data from 61 property managers with +/- 1,300 properties, all of which are located within Palm Springs, CA.

Average Daily Rate (ADR)

Average Daily Rate (ADR) 2026 Palm Springs

 

 

Average Daily Rate:

ADR performance in Q1 2026 shows encouraging trends for both Palm Springs and Natural Retreats, highlighting overall market strength. The Palm Springs market achieved steady year-over-year growth, with gains in January and March and only a minimal dip in February, demonstrating consistent momentum and resilience. Natural Retreats continues to command a strong premium position with significantly higher ADRs, while still delivering solid performance despite some normalization following an exceptionally strong prior year, particularly in March. Overall, the data reflects a stable and strengthening market, with positive signals for sustained pricing power and future growth. During February and March, Natural Retreats saw a dip within the ADR as many individuals booked longer stays, reducing the overall ADR of those months with potential stay discounts. While the market saw an uptick Natural Retreats was able to secure a higher average overall stay revenue with more nights booked.

Market Occupancy

Occupancy Rate 2026 Palm Springs

 

Occupancy:

The adjusted paid occupancy data for Q1 2026 shows mixed but generally positive trends across both Palm Springs and Natural Retreats. Palm Springs’ overall occupancy is slightly down year over year, decreasing from 61.2% to 56.8%, with declines in January (42.3% vs. 50.5%) and February (59.3% vs. 63.5%), while March remains nearly flat at around 69%. While 2025 saw the devastating wildfires in Los Angeles we had an increase in occupancy in January of 2025 making it appear that our January fell slightly. In contrast, Natural Retreats delivered occupancy 8.3% occupancy gain year over year by way of judicious rate adjustments. Overall, Natural Retreats is gaining occupancy momentum throughout the quarter, especially during peak demand periods, while Palm Springs remains relatively stable with slightly softer early-quarter performance due to high occupancy from 2025 wildfires.

Revenue Per Available Rental (RevPAR):

RevPar (ADR) 2026 Palm Springs

 

Revenue Per Available Rental (RevPAR):

The Q1 2026 adjusted RevPAR  for Palm Springs saw a slight year-over-year decline overall, with January decreasing from $158 to $141 and February from $231 to $213, while March showed a modest improvement from $276 to $284.

Natural Retreats v Palm Springs Market RevPAR

NR vs Market 2026 Palm Springs

 

Revenue Per Available Rental (RevPAR):

In contrast, Natural Retreats delivered year-over-year growth, with gains across all three months. Despite Palm Springs’ small decline earlier in the quarter from the wildfires of 2025, both the overall market and Natural Retreats show a strong seasonal ramp into March. Natural Retreats continues to significantly outperform in RevPAR, driven by its higher rate obatained and improving occupancy.

RevPAR, which combines occupancy and rate performance, offers a comprehensive view of the rental's earning potential.

Looking Ahead

As we move into Q2 2026, early indicators point to moderate but stable performance for the Palm Springs vacation rental market. Peak season occupancy remains strong, providing a solid foundation and signaling a likely positive quarter overall.

That said, elevated demand continues to be met with equally high supply in the short-term rental space, creating a highly competitive environment across the market. While demand fundamentals are healthy, this supply pressure is expected to temper rate growth in certain periods.

January is unlikely to match prior-year performance, as 2025 benefited from a one-time demand surge driven by the Los Angeles fires. Without that displacement factor, year-over-year comparisons are expected to normalize.

Looking ahead, April is shaping up to be a standout month, with festival season demand rebounding strongly. We anticipate higher occupancy levels alongside ADR growth, reflecting a return to more typical peak-season compression and pricing power.

One ongoing headwind is the continued absence of some snowbirds and seasonal winter guests, a trend that has persisted since last year. Despite this gap in a key demographic segment, overall demand remains resilient, and we are still seeing incremental gains as travelers continue to return to the market.

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.
  • APO (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.
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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.

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