US Crowns Montana a Tourism Powerhouse After Short-Term Rentals Pump Over a New Million into the State Economy

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July 22, 2026 07:14 GMT+5:30

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Montana, short-term rentals, visitor spending, Airbnb, VRBO, Yellowstone National Park, Glacier National Park, Bozeman, and Kalispell have emerged as major contributors to the state’s tourism-driven economy, according to a comprehensive study released by the University of Montana’s Bureau of Business and Economic Research (BBER). The report highlights the growing importance of short-term accommodation in supporting local businesses, generating employment, increasing household income and encouraging longer visitor stays across the state. With tourism continuing to play a vital role in Montana’s economic landscape, the findings demonstrate how the expanding short-term rental sector has become deeply integrated into regional development.

According to the study, short-term rentals generated more than $755 million in visitor spending during 2025, while contributing substantially to employment, gross domestic product, tax revenues and household earnings. Although a significant share of activity remained concentrated around Bozeman and Kalispell, economic benefits were also distributed across numerous communities throughout the state, reinforcing the broad influence of tourism beyond Montana’s best-known destinations.

New Study Highlights the Expanding Economic Role of Short-Term Rentals

A detailed assessment prepared by the University of Montana’s Bureau of Business and Economic Research has provided one of the most comprehensive examinations of Montana’s short-term rental industry.

The report, titled Short-term Rentals in Montana: Economic Contributions and Trends, evaluates how visitor accommodation offered through platforms such as Airbnb and VRBO continues supporting economic activity throughout the state.

The research was conducted by Jeff Michael, Director of the BBER, together with BBER economist Brietta Russell. Financial support for the research was provided through a $30,000 contribution from Airbnb, while the analysis focused on measuring the industry’s economic contributions rather than broader policy debates.

The findings indicate that short-term rentals have evolved into a significant component of Montana’s visitor economy, supporting households, businesses and local communities across multiple sectors.

More Than Three-Quarters of a Billion Dollars Generated Through Visitor Spending

The report estimates that guests staying in short-term rentals generated more than $755 million in visitor spending during 2025, demonstrating the sector’s substantial economic footprint.

A large proportion of this expenditure was directed toward accommodation, while additional spending benefited restaurants, recreational businesses, retail outlets and numerous other industries.

The study identified lodging as the largest expenditure category, accounting for approximately $510.5 million of the $754.5 million spent by guests.

Rather than flowing exclusively to large hospitality operators, much of this revenue was received directly by property hosts, increasing household income while supporting broader economic activity across Montana.

Tourism Activity Concentrated Around Iconic National Parks

Approximately 60% of Montana’s short-term rental activity was found to be concentrated around Bozeman and Kalispell, communities located near Yellowstone National Park and Glacier National Park.

These internationally recognised destinations continue attracting substantial numbers of domestic and international visitors seeking outdoor recreation, wildlife experiences and scenic landscapes.

However, the report also found that tourism-related benefits extended beyond these high-profile destinations.

Communities including Billings experienced measurable economic impacts, although visitor demand in these locations was influenced more strongly by business travel than traditional leisure tourism.

Longer Stays Influence Visitor Spending Patterns

The research also examined how visitor behaviour differs between travellers staying in short-term rentals and those using other forms of accommodation.

According to Jeff Michael, guests staying in short-term rentals generally remain in one location for longer periods while travelling shorter distances during their stay.

As a result, relatively less spending tends to be directed towards fuel purchases, while greater expenditure is concentrated on accommodation and locally based services.

This shift in spending patterns allows a larger proportion of tourism revenue to remain within local communities, particularly when accommodation income is received directly by Montana households.

Employment and Household Income Receive Significant Support

The economic contribution of short-term rentals extended well beyond visitor spending alone.

According to the report, more than 430,000 guest stays were recorded during 2025, supporting:

• $356 million in rental income for hosts.
• 5,559 jobs across Montana.
• $277 million in labour income.
• $797 million in total value added to Montana’s gross domestic product.

These figures illustrate how accommodation-related tourism activity contributes not only to hospitality businesses but also to employment opportunities across multiple industries connected to visitor spending.

Hosts Benefit from Supplemental Household Income

One of the report’s notable findings concerns the financial benefits received directly by hosts.

Income generated through home shares and private room rentals was estimated to range between $586 and $1,648 per month, representing an important source of supplemental household earnings.

According to Brietta Russell, considerable economic activity was generated not only through visitor spending but also through how hosts reinvested their rental income within local economies.

Revenue earned from hosting was frequently directed towards household expenses, mortgage payments, healthcare costs and other personal expenditures, creating additional economic circulation throughout Montana.

Tourism Spending Extends Across Multiple Industries

Beyond accommodation, visitors staying in short-term rentals continued supporting numerous sectors of Montana’s economy.

The report estimated approximately $243.95 million in non-lodging expenditures, including:

• Arts, entertainment and recreation: $79.71 million
• Food services: $61.9 million
• Food and beverage stores: $31.86 million
• Gasoline stations: $31.53 million
• Retail trade: $22.39 million

These spending patterns align with previous findings published by the UM Institute for Tourism and Recreation Research, which observed that visitors staying in short-term rentals allocated a greater share of their budgets to entertainment, recreation and food rather than fuel purchases.

Tax Revenue Provides Additional Public Benefits

The study also identified significant public revenue generated through short-term rental activity.

During 2025, approximately $47.6 million in tax revenue was generated statewide.

This included:

• $40.8 million through lodging sales taxes and tourism taxes.
• $6.7 million through local resort taxes in applicable communities.

These revenues contribute towards tourism promotion, public services and community development across Montana.

Flathead County Leads Visitor Spending

Regional analysis demonstrated considerable variation in tourism activity across Montana.

The highest visitor spending associated with short-term rentals was recorded in:

• Flathead County: $207 million
• Gallatin County: $152.2 million
• Madison County: $85.8 million
• Park County: $64.3 million

Even regions experiencing comparatively lower visitor activity continued receiving measurable economic benefits.

For example, the Central Eastern region hosted more than 40,000 reservation nights during 2025, supporting an estimated 112 jobs, $4.3 million in labour income and $12 million in regional gross domestic product.

Housing Affordability Debate Continues

While the report acknowledged ongoing discussions surrounding housing affordability and short-term rentals, it also clarified that housing market impacts were considered beyond the scope of the research.

The issue nevertheless remains an important topic throughout Montana.

Daniel Sidder, Director of the Housing Whitefish nonprofit organisation, noted that short-term rentals contribute to affordability pressures but are not considered the sole cause of rising housing costs.

Within Whitefish, approximately 400 registered short-term rentals account for 7% to 8% of all housing units.

However, nearly 20% of homes have been classified as dark homes, meaning they are occupied only seasonally.

According to Sidder, second homes represent a larger factor influencing affordability within the community than short-term rentals alone.

The assessment suggested that although eliminating short-term rentals might increase housing availability to some extent, broader affordability challenges would remain unresolved.

Industry Continues Expanding Across Montana

The report noted that vacation rentals have long existed throughout Montana, although the industry has expanded considerably through online booking platforms.

By 2026, more than 21,000 properties were operating through Airbnb or VRBO, supported by more than 8,000 hosts.

Many of these properties had already functioned as short-term rentals before joining digital booking platforms, reflecting the sector’s longstanding role within Montana’s tourism economy.

Tourism Remains a Powerful Economic Driver

The findings reinforce the growing importance of short-term rentals within Montana’s broader tourism sector. By generating more than $755 million in visitor spending, supporting 5,559 jobs, contributing $797 million to gross domestic product and producing nearly $48 million in tax revenues, the industry has become an important component of the state’s visitor economy. While discussions surrounding housing affordability continue across several communities, the research highlights the extensive economic contributions generated through accommodation providers, household income, local businesses and tourism-related services. As visitor demand continues evolving, short-term rentals are expected to remain a significant element supporting Montana’s travel industry, regional development and community prosperity.