Colorado’s New Short-Term Rental Alliance: Advocating for Property Owners Amid Changing Regulations

Colorado’s Short-Term Rental Industry Faces New Challenges

The Colorado Short-Term Rental Alliance (COSTRA), a nonprofit volunteer organization, officially launched this September with plans to become a unified voice advocating for the state’s short-term rental community. This new group emerged from the merger of several existing organizations, including Mile High Hosts and the Colorado Lodging Resort Alliance.

In Denver’s vibrant neighborhoods and throughout stunning mountain communities like Aspen and Telluride, short-term rental properties have become an integral part of Colorado’s tourism landscape. Yet property owners increasingly find themselves navigating complex regulatory waters that threaten their ability to operate successfully.

New Leadership and Strategic Direction

Julia Koster, who stepped into the role of executive director for COSTRA, explained that the organization will concentrate on addressing legislative and regulatory issues that burden both new and established rental property owners while providing educational resources for property managers throughout Colorado.

While the Colorado Lodging Resort Alliance had already built positive relationships with short-term rental owners statewide—particularly through their opposition to the 2024 state property tax bill and their involvement in discussions surrounding the County Lodging Tax Expansion bill—Koster noted the organization decided to rebrand following the merger to better represent its constituency.

COSTRA now works alongside various stakeholders, including online travel agencies such as Expedia and Airbnb, as well as legislators at the state Capitol. The alliance currently maintains chapters in Denver and Summit County, with additional chapters being developed for Steamboat and Telluride.

Tourism Trends Reveal Concerns for Rental Owners

During a September 9 webinar introducing the association and outlining goals for the upcoming year, Colorado leaders in tourism and the rental industry discussed evolving tourism trends and forthcoming short-term rental legislation that could impact property owners.

Tourism remains a crucial economic driver for Colorado. In 2024 alone, visitor spending in the state reached a record $28.5 billion—representing a 0.5% increase over 2023. According to Colorado Tourism Office Director Tim Wolfe, tourism generated $1.9 billion in local and state tax revenues during the same period, providing an average of $800 in tax relief per Colorado household. The industry also added 3,720 jobs to the state in 2024.

However, international tourism to Colorado shows concerning trends, which spells trouble for the short-term rental community.

“International travel is very important because those travelers spend five times the amount of a domestic traveler,” Wolfe explained during the webinar. “They stay longer. It’s less turnover in your units, which actually can save you on cleaning fees by having somebody stay longer.”

Declining Numbers and Increasing Competition

International skier visits, which attract a significant portion of tourism to Colorado, have declined steadily since 2015, with only a slight rebound following the COVID-19 pandemic. Accompanying this drop in international tourism is a year of weaker hotel occupancy rates.

“As hotel occupancies are softer, that’s going to actually increase the competition for your short-term rentals,” Wolfe warned. “The hotels are going to be trying to drive occupancies as well.”

Occupancy rates for short-term rentals are also off to a slower start than in previous years, reaching 59% in July compared to 63% in July 2023. Colorado Direct Source Short Term Rental Occupancy has decreased by 1.8% year-over-year, according to data from the Colorado Tourism Office.

“The good news is that the forecast for Airbnb and VRBO is looking pretty good through October, but it’s still kind of early in the booking window,” Wolfe added.

Colorado’s domestic market share of visitors has also been declining since before the pandemic. Although the drop in its share compared to the U.S. has slowed through 2025, no improvement has been observed.

Tax Concerns for Property Owners

Wolfe pointed out that state tax is not a deterrent for tourism since Colorado’s state tax ranks as the 47th lowest in the country at just 2.9%. However, hotel taxes and short-term rental taxes are increasing in individual Colorado counties. For example, Steamboat Springs now has a classic short-term rental state sales tax of 20.4%, while Aspen’s stands at 21.3% compared to just 11.3% for hotels.

Legislative Challenges on the Horizon

As short-term rentals have grown in popularity throughout Colorado, leaders at both state and local levels have been tasked with balancing their economic benefits to homeowners against challenges like housing shortages and rising rents. Following House Bill 1117, which allowed for local government control in 2021, several Colorado jurisdictions have implemented regulations on short-term rentals.

At the state level, COSTRA has identified multiple bills potentially harmful to short-term rental owners, despite support from lawmakers across party lines.

A notable proposal from last year was the Colorado Association of Ski Towns’ vacancy tax initiative, which aimed to address the affordable housing crisis in both mountain and urban areas. The proposal would have allowed local governments to place vacancy tax proposals on their ballots, essentially taxing empty homes. After receiving pushback from the lodging industry, the proposal was modified before the 2025 legislative session to exclude short-term rentals, though it ultimately did not advance.

Future Legislative Concerns

One bill expected to be introduced in January is the excise tax proposal, which would authorize counties and statutory cities to create an excise tax on any industry. Jaclyn Terwey, regional government affairs manager for Expedia group, mentioned during the webinar that the bill wasn’t introduced last year thanks to local efforts by short-term rental groups, but it will soon reappear.

“We are very nervous about this excise tax proposal, rightfully so,” Koster said. “With this type of proposal with no ceiling, county commissioners could literally promote an excise tax on whatever they want for whatever amount they choose. That’s a little bit scary.”

Although Senate Bill 33—the 2024 property tax bill that would have changed the property tax on short-term rentals from residential rates to commercial rates—isn’t expected to return this year, Terwey suggested that Colorado’s current budget shortfall might lead legislators to look at short-term rentals as a potential revenue source.

“That year, we felt like they were only looking at short term rentals to fill the gaps in budget holes,” she said. “I think that it’s going to be a lot of different industries and a lot of different groups that are going to be helping plug some different areas… So while I am hopeful that property taxes are not brought up, I would not be surprised if that becomes a conversation this year at the state level.”

Getting Involved

Property owners interested in supporting the organization’s advocacy efforts can become members of the Colorado Short-Term Rental Alliance by visiting ColoradoSTRA.org/join. New members can use the code “COSTRA20” for 20% off their first year of membership.

As Colorado’s short-term rental industry continues to navigate an increasingly complex regulatory environment, COSTRA aims to provide the unified voice and advocacy needed to protect property owners’ interests while working constructively with lawmakers to address community concerns.