Study finds short-term rentals contribute $755M to Montana economy
Keila Szpaller
(Daily Montanan) Short-term rentals in Montana boosted the economy and generated more than $755 million in visitor spending in 2025, according to a new study from the University of Montana’s Bureau of Business and Economic Research.
Most of the activity — 60% — is focused in Bozeman and Kalispell, near Yellowstone National Park and Glacier National Park, said the report, “Short-term Rentals in Montana: Economic Contributions and Trends.”
But the report said other places such as Billings also experience benefits, although they may draw more stays from business travelers than tourists.
Jeff Michael, director of the BBER, said Tuesday a tourist staying in a short-term rental typically stays longer in one location and drives around less, spending fewer dollars on gas and more on lodging.
“A lot of that lodging goes right into the pocket of a Montana household very frequently — not exclusively,” said Michael, who conducted the study with BBER economist Brietta Russell.
He said Airbnb provided $30,000 for the study, and it evaluated the benefits of short-term rentals.
The study references an earlier report from the UM Institute for Tourism and Recreation Research on nonresident spending, which found visitors who stayed in a short-term rental spent most of their money on arts, entertainment and recreation, followed by food and beverage stores.
“This is a distinction from the average visitor to Montana, who typically spends the largest amount on gasoline,” said the study on nonresident visitors.
The BBER study acknowledged that short-term rentals are at times controversial because of possible impacts on the overall housing market. However, it said any effects on the housing market are “beyond the scope of this report.”
The study found that in 2025, short-term rental guests booked more than 430,000 stays, supporting the following:
- $356 million in rental income for hosts;
- 5,559 jobs statewide;
- $277 million in labor income; and
- $797 million in total value added to Montana’s gross domestic product.
“In the broader discussion of short-term rentals, the ability to host and engage more creatively in the growing tourism market does provide benefits for Montanans,” Russell said.
Russell said one outcome that impressed her was the impacts generated from short-term rental hosts as opposed to the nonresident visitor spending.
The study found income for just one type of short-term rental (home shares, or private rooms) ranged from $586 to $1,648 a month, “a significant source of supplemental income to households.”
“We saw a lot of activity in several different industries coming from hosts and how they used their revenue that they generated,” Russell said.
For example, revenue from short-term rentals may be used to offset other housing costs or even on health care, according to the BBER.
The report also said short-term rentals generate tax revenue for Montana, $47.6 million in all. It said they generated $40.8 million from a lodging sales tax and a tourism tax, and $6.7 million in local resort taxes in some communities (the resort tax is applicable to roughly 20% of the short-term rentals).
In 2025, short-term rentals in Flathead County generated the largest amount of visitor spending, $207 million; it was followed by Gallatin County at $152.2 million; Madison County at $85.8 million; and Park County at $64.3 million, the report said.
“At the lowest activity level, the Central Eastern region hosted over 40,000 reservation nights in 2025, resulting in an estimated 112 jobs, $4.3 million in labor income, and $12 million in value-added to the region’s (gross domestic product),” the study said.
The “unique nature” of those rentals allows travelers to pay hosts directly for “one of the largest parts of their trip,” which is lodging, the report said.
“Of the $754.5 million spent by guests, $510.5 million went toward their lodging,” the study said. “The revenue was received by hosts, increasing local household consumption and contributions to the economy.”
A record number of out-of-state visitors spent roughly $5 billion in Montana in 2024, according to an earlier study from the UM Institute for Tourism and Recreation Research.
Michael said the money from short-term rentals is part of that impact.
“Without a short-term rental option, some dedicated properties would be used exclusively as a second home for the owner, while others might shift to medium-term rentals, which cater to guests who stay between one to six months,” the report said.
In Montana, a wide gap exists between the median household income and cost of a median home, and many communities are struggling to figure out how to provide more affordable housing.
Daniel Sidder, director of the Housing Whitefish nonprofit, said short-term rentals play a role in affordability, “but they are by no means the reason we have unaffordable homes to purchase and rent in the community.”
Whitefish is a high-cost area in Montana, and Housing Whitefish is focused on stabilizing the rental market and increasing options for people in the town.
In that community, around 400 registered short-term rentals represent 7% to 8% of all housing units, but close to 20% of all homes are classified as “dark homes,” or ones used only seasonally, Sidder said in an email.
In Whitefish specifically, he said, he believes second homes are the bigger issue when it comes to housing affordability.
“When looking at the housing challenges that Whitefish is facing, (short-term rentals) play a role — without them there would be more options for renters and buyers — but banning them, for example, would not solve the broad housing affordability challenges in the community,” Sidder said.
The report said vacation rentals have always been present in Montana, but by 2026, more than 21,000 properties were operating on Airbnb or VRBO, associated with more than 8,000 hosts.
“This includes properties that have operated as short-term rentals prior to joining platforms that facilitate hosting and marketing (short-term rentals),” the report said.
The report said most of the revenue generated from short-term rentals is received as rental income, and in 2025, Montana residents received an estimated $356 million from hosting a short-term rental.
“This income was spent in the broader economy and generated additional economic activity across the state,” the report said.
It outlined non-lodging expenditures by short-term rental guests, for a total $243.95 million, including:
- Arts, entertainment and recreation for $79.71 million,
- Food services for $61.9 million,
- Food and beverage stores for $31.86 million,
- Gasoline stations for $31.53 million,
- Retail trade for $22.39 million, and more.
In a statement provided by the BBER, Montana Chamber of Commerce CEO Todd O’Hair said the study shows short-term rentals are an economic driver, as the business community has witnessed.
“This is not a niche market,” O’Hair said in a statement. “Short-term rentals have resulted in more visitors coming to Montana, spending more money and creating an economic impact we all benefit from.”