Sedona's 1,805-listing STR market delivers median monthly revenue of $4,571 on 49% occupancy, with spring peaks pushing top performers above $12,000.
Market Overview
Sedona, Arizona operates one of the most supply-dense short-term rental markets in the Mountain West relative to its permanent population of 10,303 residents. As of February 2026, the market holds 1,805 active listings, up from 1,113 in 2021, a 62% supply expansion over five years. That growth is the defining story of the current market: occupancy has declined from a post-pandemic high of 67.9% in 2021 to 53.0% in 2025, while average daily rates have moved in the opposite direction, rising from $353 in 2021 to $422 in 2025 and $428 in early 2026. The net effect is that per-listing average monthly revenue peaked at $8,656 in 2021 and has since moderated to a range of $6,335 to $6,965 in 2024 and 2025. The February 2026 snapshot shows an average daily rate of $439.70 against 49% occupancy, producing average monthly revenue of $5,934. Sedona draws an estimated 3.7 million annual visitors to attractions including Cathedral Rock, Red Rock State Park, and the Chapel of the Holy Cross, which sustains year-round demand. However, investors entering today face a more competitive environment than early-pandemic buyers encountered. Properties must be priced and positioned carefully against a backdrop of 1,800-plus competitors. The market still generates meaningful income for well-managed properties, but the gap between top-quartile and bottom-quartile performers is wide, and passive returns are no longer the default outcome.
Seasonal Patterns
| Month | Occupancy | ADR | Revenue | Active Listings |
|---|---|---|---|---|
| Jan | 49% | $361 | $5,476 | 1,448 |
| Feb | 58% | $371 | $6,050 | 1,455 |
| Mar | 72% | $389 | $9,479 | 1,299 |
| Apr | 67% | $390 | $8,738 | 1,296 |
| May | 63% | $369 | $7,717 | 1,259 |
| Jun | 58% | $348 | $6,587 | 1,336 |
| Jul | 50% | $349 | $6,029 | 1,412 |
| Aug | 48% | $323 | $5,604 | 1,423 |
| Sep | 58% | $357 | $6,548 | 1,428 |
| Oct | 68% | $399 | $8,515 | 1,381 |
| Nov | 62% | $403 | $7,427 | 1,413 |
| Dec | 56% | $417 | $7,139 | 1,437 |
Sedona has two distinct peak periods and two softer troughs. Spring is the strongest window: March averages 72.0% occupancy and $389 ADR for average revenue of $9,479, making it the single highest-revenue month of the year. April holds at 67.0% occupancy and $390 ADR with $8,738 in average revenue. This spring concentration is driven by ideal hiking temperatures, wildflower season, and the market’s general reputation as an outdoor destination. The second peak runs from October through December. October averages 67.6% occupancy and $399 ADR ($8,515 revenue), November averages 61.6% occupancy and $403 ADR ($7,427 revenue), and December rounds out the fall-to-winter window at 55.6% occupancy and $417 ADR ($7,139 revenue). The high December ADR despite lower occupancy reflects holiday pricing. The two soft periods are mid-summer and mid-winter. July averages 50.0% occupancy and $349 ADR ($6,029 revenue), and August is the weakest month at 48.0% occupancy and $323 ADR ($5,604 revenue). These figures reflect Sedona’s heat-driven summer slowdown, when temperatures regularly exceed 100 degrees Fahrenheit. January is the softest winter month at 49.4% occupancy and $361 ADR ($5,476 revenue). The occupancy swing from peak (72.0% in March) to trough (48.0% in August) spans 24 percentage points, which creates meaningful cash-flow variability. Operators should price defensively in shoulder months and aggressively in March and October to capture the full spread.
Revenue Breakdown
| Metric | 25th Pctile | Median | 75th Pctile | 90th Pctile |
|---|---|---|---|---|
| Revenue/mo | $2,320 | $4,571 | $7,934 | $12,174 |
| ADR | $230 | $350 | $546 | $813 |
| Occupancy | 27% | 49% | 72% | 85% |
Revenue distribution across Sedona’s 1,805 listings is wide. In February 2026, the bottom quartile (P25) earned $2,320 or less, the median (P50) earned $4,571, the 75th percentile earned $7,934, and the 90th percentile earned $12,174. The spread between P25 and P90 is $9,854 in a single month, which reflects major differences in property quality, location, amenities, and management. ADR shows a similar spread: P25 is $229.70, median is $349.80, P75 is $546.00, and P90 is $812.60. A property commanding P90 ADR at P90 occupancy (85% in February) is operating in a fundamentally different tier than one landing at P25 on both dimensions. RevPAR (revenue per available rental day) averages $211.90 with a median of $163.20 in February. For annual planning, investors should weight March, April, October, and November heavily in revenue projections, as those four months historically produce 37% of a typical property’s annual gross revenue based on the multi-year seasonal averages in this dataset.
Investment Analysis
Revenue Trend
RevPAR & ADR Trend
| Date | Revenue | RevPAR | ADR |
|---|---|---|---|
| Mar 2021 | $9,378 | $303 | $345 |
| Apr 2021 | $9,168 | $306 | $346 |
| May 2021 | $9,160 | $296 | $347 |
| Jun 2021 | $8,875 | $296 | $342 |
| Jul 2021 | $8,262 | $267 | $351 |
| Aug 2021 | $8,163 | $263 | $345 |
| Sep 2021 | $8,314 | $277 | $347 |
| Oct 2021 | $9,325 | $301 | $395 |
| Nov 2021 | $8,199 | $273 | $356 |
| Dec 2021 | $7,721 | $249 | $360 |
| Jan 2022 | $6,256 | $202 | $327 |
| Feb 2022 | $6,509 | $233 | $372 |
| Mar 2022 | $9,492 | $306 | $369 |
| Apr 2022 | $8,396 | $280 | $399 |
| May 2022 | $8,038 | $259 | $367 |
| Jun 2022 | $7,427 | $248 | $354 |
| Jul 2022 | $6,700 | $216 | $377 |
| Aug 2022 | $5,820 | $188 | $299 |
| Sep 2022 | $7,099 | $237 | $328 |
| Oct 2022 | $8,744 | $282 | $348 |
| Nov 2022 | $7,833 | $261 | $348 |
| Dec 2022 | $6,939 | $224 | $339 |
| Jan 2023 | $5,539 | $179 | $313 |
| Feb 2023 | $6,147 | $220 | $313 |
| Mar 2023 | $9,205 | $297 | $366 |
| Apr 2023 | $8,508 | $284 | $351 |
| May 2023 | $7,113 | $230 | $325 |
| Jun 2023 | $5,896 | $197 | $294 |
| Jul 2023 | $5,579 | $180 | $300 |
| Aug 2023 | $4,979 | $161 | $277 |
| Sep 2023 | $5,904 | $197 | $327 |
| Oct 2023 | $7,601 | $245 | $360 |
| Nov 2023 | $6,671 | $222 | $412 |
| Dec 2023 | $6,529 | $211 | $435 |
| Jan 2024 | $5,056 | $163 | $373 |
| Feb 2024 | $5,506 | $190 | $345 |
| Mar 2024 | $9,094 | $293 | $416 |
| Apr 2024 | $7,944 | $265 | $403 |
| May 2024 | $6,988 | $225 | $381 |
| Jun 2024 | $5,135 | $171 | $353 |
| Jul 2024 | $4,717 | $152 | $350 |
| Aug 2024 | $4,449 | $144 | $338 |
| Sep 2024 | $5,667 | $189 | $379 |
| Oct 2024 | $7,982 | $258 | $422 |
| Nov 2024 | $6,591 | $220 | $421 |
| Dec 2024 | $6,890 | $222 | $443 |
| Jan 2025 | $5,002 | $161 | $373 |
| Feb 2025 | $6,153 | $220 | $387 |
| Mar 2025 | $10,224 | $330 | $451 |
| Apr 2025 | $9,675 | $323 | $451 |
| May 2025 | $7,287 | $235 | $423 |
| Jun 2025 | $5,605 | $187 | $398 |
| Jul 2025 | $4,890 | $158 | $365 |
| Aug 2025 | $4,610 | $149 | $357 |
| Sep 2025 | $5,757 | $192 | $403 |
| Oct 2025 | $8,923 | $288 | $471 |
| Nov 2025 | $7,843 | $261 | $478 |
| Dec 2025 | $7,618 | $246 | $506 |
| Jan 2026 | $5,530 | $178 | $417 |
| Feb 2026 | $5,934 | $212 | $440 |
Occupancy vs Supply
| Date | Occupancy | Active Listings |
|---|---|---|
| Mar 2021 | 71% | 1,039 |
| Jun 2021 | 73% | 1,098 |
| Sep 2021 | 71% | 1,136 |
| Dec 2021 | 68% | 1,159 |
| Mar 2022 | 71% | 1,166 |
| Jun 2022 | 62% | 1,415 |
| Sep 2022 | 64% | 1,413 |
| Dec 2022 | 62% | 1,382 |
| Mar 2023 | 75% | 1,376 |
| Jun 2023 | 62% | 1,348 |
| Sep 2023 | 57% | 1,362 |
| Dec 2023 | 50% | 1,245 |
| Mar 2024 | 71% | 1,201 |
| Jun 2024 | 48% | 1,015 |
| Sep 2024 | 49% | 1,403 |
| Dec 2024 | 50% | 1,614 |
| Mar 2025 | 72% | 1,711 |
| Jun 2025 | 45% | 1,805 |
| Sep 2025 | 47% | 1,827 |
| Dec 2025 | 48% | 1,785 |
Entry costs in Sedona are among the highest of any Arizona STR market. The typical home value sits at $888,808, and the median sale price for recent transactions reaches $1,063,333. With 224 active for-sale listings and a sale-to-list ratio of 0.969, buyers have some negotiating room, and the 63-day median time to pending indicates a market that moves slowly enough to allow due diligence. At a $900,000 purchase price with 25% down ($225,000), and assuming a 7.0% mortgage rate on a 30-year loan, the monthly PITI runs approximately $5,400 to $6,000 before management fees, maintenance, and permit costs. At median P50 revenue of $4,571 per month (February data), gross revenue does not cover carrying costs without additional optimization. However, spring peak months (March and April) produce average revenue of $9,479 and $8,738 respectively, and top-performing properties in the 90th percentile generate $12,174 per month in February alone. The investment case rests on reaching above-median performance. P75 revenue in February is $7,934, which is closer to break-even for a financed property. A P90 operator generating $12,174 per month over a full year at proportional seasonal rates could produce gross annual revenue in the $110,000 to $130,000 range. At current home values, gross yield at median performance is under 7%, which compresses significantly after expenses. Investors who perform best in this market tend to hold properties with distinctive red rock views, private pools or hot tubs, and professional management. Cash buyers or those with low acquisition debt have a materially better margin profile.
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| Date | Typical Home Value |
|---|---|
| Mar 2021 | $680,315 |
| Dec 2021 | $843,001 |
| Sep 2022 | $975,823 |
| Jun 2023 | $920,280 |
| Mar 2024 | $960,862 |
| Dec 2024 | $977,038 |
| Sep 2025 | $938,836 |
Booking Insights
In February 2026, the average booking lead time in Sedona is 56 days, with a median of 43 days. This means half of all bookings are made within about six weeks of the stay, and the average guest is booking nearly two months out. The gap between mean (56) and median (43) indicates a segment of guests who book well in advance, likely for high-demand spring and fall dates, pulling the average upward. Average length of stay is 4.3 nights, with a median of 3.0 nights. The mean-to-median gap here also signals a bimodal distribution: many guests book long weekends (2 to 3 nights), while a smaller group of guests books week-long or extended stays, raising the average. For pricing strategy, these patterns suggest that minimum-stay settings of 2 to 3 nights capture the median guest without turning away the majority of bookings. Setting 7-night minimums during peak spring weekends is viable given the 56-day average lead time, but operators should open shorter stays in the final 2 to 3 weeks before dates go unfilled. Operators who track lead-time data on their own booking calendars can identify when to discount to fill gaps versus when demand is strong enough to hold rates.
Short-Term Rental Regulations
Sedona has a direct permitting requirement that applies to all short-term rental operators within city limits. Property owners must hold two licenses simultaneously: a Transaction Privilege Tax (TPT) license issued by the Arizona Department of Revenue, and a City of Sedona short-term rental permit. Operating without both licenses is prohibited, and properties cannot be advertised or rented even for a single day without both in place. The city permit costs $210 per year, per unit, and the fee is non-refundable and non-transferable. As of January 1, 2026, late renewal penalties apply: a $50 fee for permits renewed between 2 and 90 days late, and a $100 fee for permits renewed 90 or more days late. State TPT licenses renew annually in December and January through the Arizona Department of Revenue. On the tax side, operators must collect and remit state, county, and city taxes on all rental income. This combined tax burden includes Arizona state TPT, Yavapai County taxes, and Sedona city taxes. Operators can handle this directly or designate a third-party vendor (such as Airbnb or Vrbo, which collect and remit on behalf of hosts on their platforms in most cases). Zoning rules restrict where STRs may operate within the city, so buyers should verify zoning compliance before purchasing a property with STR intent. Safety requirements include working smoke detectors, carbon monoxide alarms, and fire extinguishers. Properties must meet local building codes, provide adequate parking, and post occupancy limits. Non-compliance can result in fines, permit suspension, or permit revocation. The City of Sedona’s official website (sedonaaz.gov) and the Sedona Municipal Code (library.municode.com/az/sedona) are the authoritative sources for current requirements.
Market Comparison
Sedona’s February 2026 ADR of $439.70 is well above typical U.S. STR market averages, which tend to cluster in the $150 to $250 range for mid-tier markets. Its 49% occupancy is below the national average for leisure-focused STR markets (which generally run 55% to 65% for comparable destination markets), reflecting the supply growth Sedona has experienced since 2021. Within Arizona, Sedona competes primarily with Scottsdale and Flagstaff for STR investment interest. Scottsdale generally offers higher occupancy and lower per-night rates due to its convention and event demand base. Flagstaff, 28 miles north, benefits from Northern Arizona University demand and ski-season traffic but carries lower ADRs than Sedona. Sedona’s distinguishing factor is its ADR ceiling: P90 ADR of $812.60 per night indicates that premium properties can command rates rarely seen in comparable-population Arizona markets. The trade-off is a higher acquisition cost (typical home values near $889,000) and a market where supply has expanded faster than demand over the past four years. Investors choosing Sedona over lower-cost Arizona markets are making a bet on premium positioning and rate capture rather than volume or occupancy-driven returns.
Frequently Asked Questions About Sedona, Arizona
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