At the end of March 2025, Europe’s tourism landscape is shifting. Over-tourism remains a challenge in major cities, but rural areas are witnessing a quiet revival, largely driven by short-term rentals (STRs). Once seen primarily as an urban issue, STRs are now reshaping local economies in villages, small towns, and remote regions, offering a sustainable alternative to overcrowded hotspots.

From Decline to Opportunity

For years, rural Europe struggled with depopulation and economic stagnation. However, STR platforms have changed the game, making lesser-known destinations more accessible. The European Commission’s latest Sustainable Tourism Report 2024 confirms that rural STRs are driving economic diversification, attracting visitors who stay longer and spend more in local communities.

Take Portugal’s Douro Valley, where vineyard owners are converting estates into guest accommodations, or France’s Occitanie region, where former farmhouses now host eco-tourists. In Italy’s Alpine villages, STR hosts collaborate with local artisans, ensuring that visitor spending directly benefits the community.

More Than Just Accommodation

STRs are economic engines. A 2024 study by the European Travel Commission found that tourists in rural STRs spend an average of 30% more on local food, crafts, and cultural activities compared to hotel guests. From truffle-hunting in Tuscany to cheese-making workshops in Spain’s Castilla y León, STR-driven tourism is sustaining traditional industries and creating new job opportunities.

Moreover, STRs help retain local populations. In many areas, renting out rooms or homes provides an alternative income stream, allowing residents to stay rather than migrate to urban centres. This trend is particularly evident in Greece, where island communities have seen economic renewal thanks to STR-based tourism.

Tourism Dispersion and Sustainability

With cities like Venice and Barcelona tightening STR regulations to combat over-tourism, the EU is pushing for better tourism distribution. The 2025 EU Transition Pathway for Tourism highlights rural STRs as a tool for spreading visitor traffic more evenly, reducing pressure on major hubs while fostering sustainable growth in lesser-visited areas.

Still, challenges remain. Housing shortages, seasonal price surges, and the need for fair taxation are key concerns. The EU’s Short-Term Rental Data Framework, implemented in early 2025, aims to regulate the sector while protecting local communities from speculative real estate practices.

The Road Ahead

STRs are not just a passing trend-they are reshaping Europe’s tourism economy. To ensure their long-term success, the EU’s 2025 Tourism Action Plan calls for:

• Smart incentives for rural tourism innovation, including funding for digital platforms that connect STR hosts with local businesses.

• Investment in infrastructure, ensuring that rural areas remain accessible and attractive to visitors.

• Balanced regulation, preventing market distortions while allowing homeowners to benefit from STR revenue.

As European tourism policy evolves, rural communities have an opportunity to position themselves as sustainable, culturally rich alternatives to overcrowded city destinations. With the right support, STRs can be a driving force for long-term rural development, turning forgotten villages into thriving tourism hubs.