Rising Taxes And Shifting Tourism Trends: Costra Prepares For Upcoming Challenges In Short Term Rental Market Of Colorado

Published on September 12, 2025

The scenery of short-term rental properties successful Colorado has seen a important translator pinch nan constitution of nan Colorado Short-Term Rental Alliance (COSTRA). This nonprofit statement officially launched successful September, aiming to merge and correspond nan divers short-term rental organization crossed nan state. With nan merger of influential organizations for illustration Mile High Hosts and nan Colorado Lodging Resort Alliance, COSTRA has emerged arsenic a powerful sound advocating for some seasoned and caller rental spot owners, providing acquisition and resources while addressing legislative and regulatory concerns.

A Unified Voice for Short-Term Rental Owners

COSTRA’s statement represents a strategical move to consolidate nan efforts of various stakeholders successful Colorado’s short-term rental industry. The merger was driven by nan request for a much unified attack to tackling nan challenges that rental spot owners face, including legislative hurdles and ever-evolving regulations. Under nan activity of Julia Foster, nan recently appointed executive director, nan statement is poised to supply broad support for spot managers and owners passim Colorado. Foster emphasized that nan ngo of COSTRA will beryllium to reside nan pressing issues surrounding short-term rentals while besides ensuring that spot managers are well-equipped pinch nan knowledge to succeed.

In an era marked by increasing legislative scrutiny connected short-term rentals, COSTRA has committed itself to collaborating pinch cardinal stakeholders for illustration Airbnb, Expedia, and authorities legislators to guarantee that nan sound of nan short-term rental organization is heard. Foster’s activity intends to guideline nan statement successful addressing nan needs of spot owners while besides navigating nan analyzable governmental scenery that impacts nan industry.

Tourism’s Role successful Colorado’s Economy

Tourism continues to beryllium a cornerstone of Colorado’s economy, contributing importantly to authorities revenues and occupation creation. In 2024, Colorado’s tourism assemblage saw awesome growth, pinch visitant expenditures hitting a grounds $28.5 billion, a humble summation of 0.5% from nan erstwhile year. The manufacture besides generated $1.9 billion successful taxation gross for nan state, providing an mean of $800 successful taxation alleviation per household. Additionally, tourism added complete 3,700 jobs to nan state’s system successful 2024, underscoring its captious domiciled successful sustaining Colorado’s financial health.

However, nan effect of international tourism connected Colorado’s system is simply a constituent of concern. International travelers thin to walk importantly much than home visitors, contributing to nan stableness and profitability of short-term rentals. Unfortunately, world tourism has been connected nan diminution since 2015, pinch immoderate betterment aft nan COVID-19 pandemic. This alteration successful world tourism has led to a much competitory market, peculiarly for short-term rentals, arsenic hotels are vying for a larger stock of home visitors.

Short-Term Rental Occupancy Rates Declining

The occupancy complaint for short-term rentals successful Colorado has besides faced challenges. In July 2024, nan occupancy complaint stood astatine 59%, a alteration from 63% successful July 2023. Data from nan Colorado Tourism Office highlights a 1.8% year-over-year decline successful short-term rental occupancy. Despite these challenges, manufacture experts stay optimistic. According to Tim Wolfe, nan head of nan Colorado Tourism Office, forecasts for platforms for illustration Airbnb and VRBO look promising done nan autumn months, though early-stage bookings whitethorn still power these numbers.

Rising Taxes connected Short-Term Rentals

While Colorado remains competitory successful position of state taxes, pinch a debased complaint of 2.9%, nan aforesaid cannot beryllium said for section taxes connected short-term rentals. Steamboat Springs and Aspen are premier examples of areas wherever nan taxation load connected short-term rentals has accrued significantly. In Steamboat Springs, nan sales taxation connected short-term rentals stands astatine 20.4%, while Aspen imposes a 21.3% tax, a stark opposition to nan much mean taxation rates applied to hotels. These rising taxes, coupled pinch nan imaginable for moreover higher levies successful immoderate areas, person raised concerns among rental spot owners.

Legislative Hurdles and Challenges Ahead

One of nan astir important challenges COSTRA faces is navigating nan analyzable web of legislative issues that proceed to impact short-term rental owners. Over nan years, galore legislative proposals person sought to modulate nan short-term rental manufacture successful ways that immoderate judge could beryllium detrimental to spot owners.

The Vacancy Tax Proposal

A salient rumor that emerged successful nan past legislative convention was nan vacancy taxation proposal introduced by nan Colorado Association of Ski Towns. The connection aimed to reside nan affordable lodging crisis by allowing section governments to enforce taxes connected vacant homes. Initially, this connection would person included short-term rentals, but pursuing beardown pushback from nan lodging industry, it was revised to exclude these rentals. Despite its revisions, nan connection grounded to beforehand and is improbable to beryllium revisited successful nan adjacent future.

The Excise Tax Proposal

Looking ahead, nan excise taxation proposal is different portion of authorities that short-term rental owners are intimately monitoring. This bill, which would springiness section governments nan authority to enforce taxes connected immoderate industry, has raised alarms among spot owners. According to Jaclyn Terwey, location authorities affairs head for Expedia, this measure has nan imaginable to create important uncertainty for nan short-term rental market, arsenic location would beryllium nary headdress connected nan taxation rates that could beryllium imposed. For Julia Foster of COSTRA, nan imaginable of specified an open-ended taxation is concerning, peculiarly since region commissioners could theoretically enforce taxes connected immoderate industries they take astatine immoderate level.

Property Tax Concerns

Property taxes stay different constituent of contention for short-term rental owners successful Colorado. The 2024 spot taxation bill aimed to alteration nan taxation classification for short-term rental properties, shifting them from residential to commercialized taxation rates. Although this connection did not summation traction successful nan past legislative session, experts pass that property taxes could again go a taxable of chat successful 2025, particularly considering nan state’s fund shortfall. This imaginable displacement could person important financial implications for short-term rental owners, further complicating nan scenery of spot guidance successful nan state.

Looking Forward: What’s Next for COSTRA?

As COSTRA prepares for different twelvemonth of legislative challenges, nan statement is focused connected ensuring that nan sound of short-term rental owners is represented astatine nan authorities and section levels. With an accent connected advocacy, education, and collaboration, COSTRA intends to mitigate nan effect of rising taxes, regulatory challenges, and evolving tourism trends. In summation to its existing chapters successful Denver and Summit County, nan statement is looking to grow to Steamboat Springs and Telluride, reinforcing its committedness to nan short-term rental organization crossed Colorado.