Carmel-by-the-Sea STR Market Report 2026: Two Numbers, One Village

Jacob Mishalanie
4 days ago
13 min read

Carmel Point river beach and cove, Carmel-by-the-Sea California photograph

Two data providers looked at the same one square mile of cottages and courtyards and came back with numbers that disagree by roughly a third. AirROI puts a typical Carmel-by-the-Sea short-term rental at $91,583 a year. AirDNA puts it at $122.7K. Both are current. Neither is wrong on its face. And a host who picks whichever one flatters their spreadsheet is already off to a bad start, because the honest answer this year is a range, not a headline.

That range matters more in Carmel-by-the-Sea than almost anywhere else on the Central Coast, because this town does not behave like the rest of the Monterey Peninsula. It is one square mile, no street addresses on houses by design, no traffic lights, and a zoning code that flatly prohibits short-term rentals in its R-1 single-family zones. The village that shows up in an AirROI scrape is not the same village that shows up at a city council meeting, and a host who treats one as a stand-in for the other is going to misprice their year, misjudge their competition, or worse, misjudge whether they can legally operate at all.

This report exists to give Carmel-by-the-Sea its own line — not blended into a Monterey County rollup, not padded with Pebble Beach or 17-Mile Drive listings, and not quietly merged with the separate leftover geography known as Carmel Point. What follows is what the numbers actually say, where they disagree, and what a host or buyer should do with a range instead of a single figure.

None of this is a knock on either data provider. AirROI and AirDNA are both doing what an aggregator does — pulling a listing set, running it through a model, and publishing an estimate. The disagreement between them is a feature of the underlying market, not a flaw in either tool: Carmel-by-the-Sea is small enough, and its zoning restrictive enough, that the active listing pool any given crawl catches can shift meaningfully depending on timing and methodology. A 318-listing snapshot and a 378-listing snapshot are, almost by definition, not describing the exact same market. This is not legal advice.

The Two Numbers, Side by Side

AirROI's pull, covering August 2025 through July 2026 with analytics current as of July 31, 2026, shows 318 active listings, an average daily rate of $688, occupancy of 45.9%, RevPAR of $326, and a typical annual take of $91,583. AirDNA's figure, covering a similar but not identical window (July 2025 through July 2026), shows 378 listings, occupancy of 66%, an average daily rate of $594, and an annual figure of $122.7K.

Put the two side by side and the gap is not small. It is roughly a 34% spread on annual revenue, and the two providers don't even agree on which lever is doing the work — AirROI shows a higher rate but much lower occupancy, AirDNA shows a lower rate but occupancy 20 points higher. That is not a rounding difference. It suggests the two datasets are drawing from different pools of listings, different date windows, or both, and a host trying to build a pro forma off either one alone is building on sand.

The right move is not to average $91,583 and $122.7K and call it $107K. Averaging two disagreeing estimates manufactures a false precision that neither source actually supports. The honest move is to hold both, note that they disagree by about a third, and treat the true number for any specific property as something to be discovered from that property's own trailing twelve months — not assumed from either aggregator.

It's also worth asking what would make the two providers land so far apart in the first place. A 20-point occupancy gap paired with a nearly $100 ADR gap in the opposite direction suggests the underlying listing sets aren't identical — one dataset may be weighting toward a segment of higher-rate, lower-turnover properties, the other toward a segment that books more nights at a lower nightly rate. Both patterns exist in Carmel-by-the-Sea's actual listing stock, cottages that price high and sit empty more often, and cottages that price to fill. A host reading either report in isolation risks assuming their own property behaves like the average, when the average itself is really two different markets folded into one line.

Why Carmel Point Doesn't Belong in This Number

A separate wrinkle, and one worth stating plainly before it gets muddled: Carmel Point is not Carmel-by-the-Sea. It's an unincorporated pocket of Monterey County immediately adjacent to the village, with its own AirROI line showing $157,376 a year at 53.4% occupancy. That figure is real, but it describes a different parcel, a different jurisdiction, and in many cases a different property type — larger homes, different lot sizes, no city R-1 zoning attached.

Filing that $157,376 figure onto a village APN inflates expectations for a cottage on a residential Carmel-by-the-Sea street that, if it's zoned R-1, likely can't legally operate as a short-term rental at all. A buyer evaluating a Carmel Point property should use the Carmel Point number. A buyer evaluating a property inside the city limits of Carmel-by-the-Sea should use the AirROI-versus-AirDNA range above, and should confirm the parcel's zoning before doing anything else.

This kind of geographic bleed is easy to miss because Carmel Point sits so close to the village that a casual search often returns both sets of listings together. A real estate agent unfamiliar with the distinction, or an aggregator's map-based search radius, can easily pull Carmel Point comps into a village analysis without flagging the switch. The fix is simple but has to be deliberate: check the parcel address against the incorporated city boundary, not just the neighborhood name a listing platform assigns it.

What the Underlying Data Actually Shows

Setting the top-line dollar figure aside, the AirROI extract has some texture worth reading closely. Entire home/apartment listings make up 91.5% of the 318 active rentals — this is overwhelmingly a whole-cottage market, not a room-share or hosted-stay market. Supply grew 7.8% on that extract, which is meaningful growth for a town this small and this constrained by zoning.

Average guest capacity sits at 4.8, with 46.0% of properties able to sleep six or more guests and 22.3% of listings sized for two guests specifically — a market that splits between larger family or group cottages and smaller couple-oriented stays, with less in between than you'd expect. The typical booking window runs about 66 days out, which tells a host something practical: Carmel-by-the-Sea guests are planning ahead, not booking on a whim, and a listing that isn't dialed in by the two-month mark before a target date is losing bookings to one that is.

Seasonally, AirROI's page shows August as the peak month and January as the softest for revenue, while occupancy separately peaks in August and dips lowest around midwinter. Those are two different curves worth tracking on their own lines rather than collapsing into one 'slow season' statement — the revenue hole and the occupancy dip don't necessarily land in the exact same weeks.

For a host building a calendar, that distinction changes what problem you're solving in January versus, say, a shoulder week in March. If revenue is down because rate is down, the fix is a pricing and positioning conversation. If occupancy specifically is down, the fix is closer to a demand-generation conversation — different channels, different search terms, maybe a different length-of-stay product. Reading the AirROI page as one flat 'slow season' collapses two separate problems into a single, less useful answer.

Two Cottage Profiles Inside the Same Average

The 46.0%-sleep-six-or-more and 22.3%-two-guest split described above isn't just a footnote about capacity — it's a clue about why the range is so wide in the first place. A five- or six-bedroom cottage built for a family reunion or a golf group behaves differently in this market than a one-bedroom cottage marketed to a couple celebrating an anniversary. The larger property can command a premium nightly rate on the calendar's best weekends, but it also has fewer natural occupants — group travel books further out, in bigger blocks, and shifts more easily when even one traveler's plans change. The smaller property, sized for two, can fill more nights at a lower rate because a couple's travel plans are simpler and the buying pool of two-person trips is larger.

Averaged together, those two very different properties produce exactly the kind of split this report keeps returning to: a high ADR of $688 paired with an occupancy rate under 46%, versus a read of the same underlying market — AirDNA's 66% — that fills far more often at a lower nightly rate. It's plausible that AirROI's extract leans more heavily toward the larger, higher-rate cottages that dominate headline searches, while AirDNA's larger 378-listing pool captures more of the smaller, faster-filling units. Neither guess can be confirmed without seeing each provider's underlying listing set, but it's a more useful way to hold the disagreement than assuming one number is simply wrong and the other simply right.

For a host deciding how to position a specific property, the practical takeaway is to ask which profile the property actually is, not which headline number sounds better. A six-guest cottage should expect to defend its rate more than its occupancy, since it is competing for a smaller pool of group trips that book far in advance. A two-guest cottage should expect to defend its occupancy more than its rate, since couples are a larger and steadier demand pool but rarely pay the same nightly premium a group will pay for a big August weekend. Building a 2026 plan around the wrong half of that equation — chasing rate on a small unit, or chasing occupancy on a large one — is one of the more common and most fixable mistakes a Carmel-by-the-Sea host can make.

The Zoning Reality Behind the Numbers

None of the revenue figures above matter if a specific property can't legally operate. The City of Carmel-by-the-Sea defines a transient rental as any occupancy under 30 consecutive days, and its municipal code prohibits short-term or transient rentals outright in R-1 single-family zones. That is the majority zoning designation across most of the residential village.

There are two narrower pathways in commercial and R-4 zones under Carmel Municipal Code 17.14.040.W: a Legal Nonconforming permit, issued before Ordinance 2019-03 took effect, which runs with the land and does not expire on resale; and a Housing Incentive pathway that allows one transient unit for every three new rental units built, including low- and moderate-income units, subject to a conditional use permit. Advertising a transient rental without one of these permits is itself prohibited under the city's advertising rules.

This is a market where the zoning map is doing more work than the occupancy chart. A host who buys or lists based purely on AirROI or AirDNA data without first confirming the parcel's zoning and permit status is skipping the single most important variable in this town. This is not legal advice — confirm parcel zoning and permit status directly with the City of Carmel-by-the-Sea before listing anything.

It's also worth flagging what the AirROI page itself does not say clearly: it does not adjust for legality. An aggregator scrape counts active listings, whatever their permit status, and does not distinguish a Legal Nonconforming cottage in good standing from an unpermitted listing operating in a prohibited zone. Some share of the 318 active listings in that extract may not be operating on solid legal footing, and a buyer using the extract as a competitive-set benchmark should keep that caveat in mind rather than reading every visible listing as a legitimate comparable.

Tax and Destination-Marketing Figures —.

Carmel-by-the-Sea's transient occupancy tax, under Carmel Municipal Code 3.32.020, is set at 10 percent of rent charged. A separate figure sometimes circulated — total city TOT collections of $9,527,386 from a countywide lodging-tax comparison table — describes hotel-inclusive citywide collections, not a single host's annual take, and should never be read as an AirROI-style per-listing revenue figure.

Similarly, a $95 million visitor-spending figure attributed to a Monterey County destination-marketing presentation describes total visitor spend in and around Carmel, not short-term rental revenue specifically. It's a useful demand signal — Carmel draws real visitor spending — but it is not an occupancy or ADR number and shouldn't be quoted as one. A proposed 2 percent increase to the city's TOT rate has been part of recent council discussion but was not enacted law as of this writing; hosts should confirm the current posted rate with the city rather than assume any pending change is already in effect.

The pattern across all three of these figures — the $9.5 million TOT total, the $95 million visitor-spend figure, and the pending TOT-increase discussion — is the same one that shows up throughout this market: numbers that are real, sourced, and easy to find, but describing a different unit of measurement than 'what does one short-term rental earn.' A market report earns its keep by keeping those units separate rather than letting a big, impressive-sounding figure stand in for the one number a host actually needs.

What This Means for a Host Building a 2026 Plan

Start from the range, not a single number. $91,583 to $122.7K is the honest 2026 picture for a Carmel-by-the-Sea entire-home listing, with the gap driven by a real disagreement between two credible sources on occupancy and rate. A host's actual result will land somewhere in or near that range depending on the property, the calendar, and how the listing is marketed — not on which aggregator they happened to check first.

From there, the zoning question comes before the revenue question. Confirm the parcel is not R-1, or that it carries a Legal Nonconforming or Housing Incentive permit, before building any financial model. And keep Carmel Point's $157,376 figure filed exactly where it belongs — describing a different, adjacent geography, not this village's mean.

Once the legal and geographic questions are settled, the marketing question is the one that actually moves a specific listing's result within that range. A 66-day average booking window means a listing's photos, pricing, and search visibility need to be strong well before a target date, not adjusted reactively once a gap in the calendar shows up. A market this small and this dependent on entire-home stays rewards a listing that reads as distinctly Carmel-by-the-Sea — Ocean Avenue, the beach at the foot of the village, a specific courtyard or garden — over one that reads as a generic Central Coast cottage competing on price alone against Monterey or Pacific Grove listing stock a search engine might surface in the same results.

Reading This Report Against a Neighboring Desk

Carmel-by-the-Sea sits inside a cluster of jurisdictions — the city itself, unincorporated Monterey County pockets like Carmel Point, and neighboring Monterey a few miles up the coast — that each run their own permit process and, in aggregator data, sometimes their own listing pool. A host comparing this report to a Monterey or Pebble Beach figure should confirm which desk actually governs the parcel in question before assuming the numbers are interchangeable. County vacation-rental licensing rules are not the same as Carmel Municipal Code 17.14.040.W, and a permit valid in one jurisdiction says nothing about legality in the other.

This matters for buyers scanning listings across the Peninsula for the best entry point. A property just outside the Carmel-by-the-Sea city line may show up in the same map search, wear the same 'Carmel' name in marketing copy, and even carry a similar photo aesthetic — but operate under an entirely different rulebook and revenue profile. Treat the city line, not the ZIP code or the neighborhood label a listing platform assigns, as the boundary that actually determines which numbers and which regulations apply.

Frequently Asked Questions

Why do AirROI and AirDNA disagree so much on Carmel-by-the-Sea revenue?

The two platforms pull from different listing samples and slightly different date windows — AirROI's extract runs August 2025 through July 2026 with 318 active listings, while AirDNA's runs July 2025 through July 2026 with 378. That difference in sample and timing produces a roughly 34% gap between $91,583 and $122.7K. Neither figure is inherently wrong; they're measuring overlapping but not identical pools of properties. Hosts should treat the spread as a range, not average the two into one number.

Is Carmel Point's $157,376 figure the real Carmel-by-the-Sea number?

No. Carmel Point is an unincorporated Monterey County geography adjacent to but distinct from the incorporated City of Carmel-by-the-Sea, and its AirROI figure reflects different parcels, different zoning, and often larger homes. Filing that number onto a village APN overstates what a Carmel-by-the-Sea cottage will actually earn and can lead a buyer to overpay based on the wrong comparable.

Can I legally run a short-term rental in Carmel-by-the-Sea?

It depends entirely on the parcel's zoning. The city prohibits transient rentals — defined as stays under 30 consecutive days — in R-1 single-family zones, which cover most of the residential village. Narrower pathways exist in commercial and R-4 zones through a Legal Nonconforming permit predating 2019 or a Housing Incentive conditional use permit. This is not legal advice; confirm your specific parcel's zoning and permit status with the City of Carmel-by-the-Sea before listing.

What is Carmel-by-the-Sea's transient occupancy tax rate?

Ten percent of rent charged, under Carmel Municipal Code 3.32.020. A proposed increase of 2 percentage points has circulated in recent council discussion but was not enacted law as of this research; hosts should confirm the current posted rate with the city rather than assume a pending change has taken effect.

What kind of listing dominates the Carmel-by-the-Sea market?

Entire home and apartment listings make up 91.5% of the 318 active rentals in the AirROI extract, with an average guest capacity of 4.8. This is a whole-cottage market rather than a hosted room-share market, and nearly half of listings — 46.0% — can sleep six or more guests, alongside a meaningful share of two-guest listings for couples.

When is the slow season in Carmel-by-the-Sea?

AirROI's data shows January as the softest month for revenue, with occupancy also dipping lowest in the surrounding winter stretch. Fog and cooler weather define the shoulder months broadly from January through March, which is where a host has the most room to design a specific midweek or extended-stay product rather than simply discounting peak-season pricing.

How far in advance do guests book a Carmel-by-the-Sea stay?

The typical booking window in the AirROI extract runs about 66 days out. That's a meaningfully longer lead time than many drive-market destinations, which means a listing needs to be fully dialed in — photos, pricing, availability — well ahead of any target date rather than relying on last-minute demand.

Does the $9.5 million TOT figure represent short-term rental income?

No. That figure, drawn from a countywide lodging-tax comparison table, reflects total citywide transient occupancy tax collections including hotels, not a per-listing or STR-specific revenue figure. It's a useful indicator of overall lodging demand in Carmel-by-the-Sea but should never be read as an individual host's expected annual take.

Is the $95 million visitor-spending figure the same as short-term rental revenue?

No. That number comes from a Monterey County destination-marketing presentation and describes total visitor spending across the Carmel area — dining, retail, attractions, lodging of all types — not short-term rental occupancy or ADR specifically. It's a demand signal, not a revenue estimate for hosts.

Should I use AirROI or AirDNA when I underwrite a Carmel-by-the-Sea purchase?

Use both, presented as a range, and treat a specific property's own trailing twelve months as more reliable than either aggregator once that history exists. For a purchase without operating history, the $91,583–$122.7K spread is the honest starting point — narrow it further with local comps and a conservative read of occupancy, not by picking whichever number makes the deal pencil.

Work with Crest & Cove Creative

Two data providers put a 34% gap between what a Carmel-by-the-Sea rental earns, and most listings still market themselves like the number is settled. It isn't, and neither is the story guests are being told.

Crest & Cove Creative builds the listing story and channel strategy that fits Carmel-by-the-Sea's actual guest, not a borrowed Peninsula average. Ask us for a marketing audit before you set next season's calendar. Send the live listing draft and the facts you can actually cite.

Reach out at crestcove.co or (256) 998-7502.