Thousands of new apartments enter the market: Is competition increasing in the short-term rental sector?

The short-term rental market in Albania continues to expand at a strong pace, but the first signs of a significant shift are beginning to emerge. After several years of uninterrupted growth in demand, revenues, and prices, investors are facing a new reality: supply is growing faster than demand.

The latest data published by AirDNA show that Albania’s short-term accommodation market remains one of the most dynamic in the Balkans. However, competition is becoming increasingly intense, and profits are no longer growing at the same pace as before.

Albania Leads the Balkans in Supply Growth

During the 12 months ending in March 2026, Albania recorded an average of approximately 27,000 active listings on Airbnb and Vrbo.

This represents a 19% increase compared with the previous year, the highest rate of supply growth among all Balkan countries.

Just a few years ago, before the pandemic, the market was significantly smaller. In 2019, the number of active listings was below 6,000. The growth of tourism, investor interest, and attractive returns from short-term rentals have encouraged thousands of property owners to enter the market.

The result has been a remarkable transformation of the sector within a relatively short period of time.

Demand Continues to Grow, But Not as Fast as Supply

The good news is that tourists continue to choose Albania.

According to AirDNA, demand measured by booked nights increased by 18% over the past year, while total sector revenues reached €133.7 million, representing annual growth of 19%.

However, for the first time in many years, the growth rate of supply has started to exceed the growth rate of demand.

From an economic perspective, this is the point at which the market begins to rebalance. When the number of available properties grows faster than the number of tourists, competition among property owners intensifies and pressure on prices increases.

Prices Are Rising Much More Slowly

One of the clearest signs of this shift is the slowdown in price growth.

The average daily rate (ADR) reached €57 per night during the past year, a level more than 50% higher than before the pandemic.

However, compared with the previous year, prices increased by only 1%.

This suggests that the period during which owners could raise prices every season may be coming to an end.

To maintain booking levels, many operators are being forced to compete more aggressively through pricing, service quality, additional amenities, and positive guest reviews.

Occupancy Rates Are Stabilizing

Occupancy rates are showing similar signs.

On average, properties listed on Airbnb and Vrbo in Albania achieved an occupancy rate of 54% during the past 12 months.

This level remains significantly higher than before the pandemic, when the average occupancy rate was around 43%.

Nevertheless, the pace of improvement has slowed considerably, and in some periods slight declines have even been recorded.

For investors, this means that future profitability will depend less on the automatic growth of tourist arrivals and increasingly on professional property management and differentiation from competitors.

Seasonality Remains the Biggest Challenge

Despite strong tourism growth, the Albanian market remains highly seasonal.

Data show that during 2025, demand in February represented only 28% of July’s level and just 23% of August’s level, the peak month of the tourist season.

This large gap between the high and low seasons remains one of the main challenges for short-term rental owners.

In practice, many properties generate the majority of their annual income during only three or four summer months.

For this reason, investors should carefully analyze the property's true annual income potential rather than focusing solely on peak-season performance.

What Does This Mean for Investors?

Recent developments do not indicate the end of the short-term rental boom in Albania.

On the contrary, the market continues to grow and attract new investment. However, the era of easy profits and automatic price growth appears to be giving way to a more competitive and professional marketplace.

The investors who will have the greatest advantage in the coming years will not necessarily be those who own the most apartments, but those who provide the best customer experience, efficient management, and properties in locations with strong year-round potential.

A Market That Is Becoming More Competitive

Albania’s short-term rental market is undergoing its first real stress test. Supply is growing faster than demand, price growth is slowing, and occupancy rates are stabilizing.

Nevertheless, with more than €133 million in annual revenues and Albania remaining one of the fastest-growing tourism destinations in the region, the market’s long-term potential remains significant.

The question is no longer whether tourism will continue to grow, but which investors will succeed in standing out in a market that is becoming more competitive every year.

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