Colorado Short-Term Rental Alliance Launches to Advocate for Owners Amid Rising Regulations

Colorado Short-Term Rental Alliance Launches to Advocate for Owners Amid Rising Regulations

Short-term rentals have become a vital aspect of Colorado’s hospitality scene, shaping both local housing markets and the overall tourism experience. Anyone walking through Denver’s neighborhoods knows how much these rentals connect visitors with distinctive local charm—and those same streets are now a focal point for big policy discussions. In 2025, property owners here are watching closely as new organizations and legislation reshape what it means to manage rentals, whether in the city or in beloved resort towns.

A Unified Voice for Short-Term Rentals

In September, the Colorado Short-Term Rental Alliance (COSTRA) stepped out as a nonprofit, volunteer-led group with a commitment to represent and support short-term rental owners statewide. Formed from the coming together of existing groups—including Mile High Hosts and the Colorado Lodging Resort Alliance—COSTRA’s mission is to ensure that property managers and homeowners are equipped to handle shifting regulations and legislative challenges.

Julia Koster, COSTRA’s executive director, explained that the alliance will serve as a resource for both education and advocacy. COSTRA has inherited the Colorado Lodging Resort Alliance’s strong relationships with rental hosts, especially given past efforts around local legislation like the 2024 state property tax bill and the County Lodging Tax Expansion law. The name change following the merger reflects this new, inclusive direction.

These relationships extend beyond owners and managers. The group actively works alongside online platforms such as Airbnb and Expedia, as well as lawmakers at the state Capitol, to keep the conversation moving forward. With chapters now active in Denver and Summit County—and additional ones being developed in Steamboat and Telluride—COSTRA clearly sees room to support property managers well beyond the Front Range.

Colorado’s Tourism Trends and What They Mean for Rentals

Tourism’s impact on Colorado’s economy can’t be understated. In 2024, traveler spending reached a record $28.5 billion, with $1.9 billion funneled into local and state coffers through tax revenues. For the typical household, that’s roughly $800 of tax relief thanks to tourism, according to Tim Wolfe, director at the Colorado Tourism Office. The hospitality sector also added 3,720 jobs during that same period.

Yet not every trend is encouraging. International travel to Colorado—crucial for short-term rental owners—has flagged, a shift that’s especially evident in Denver as well as the state’s ski hubs. International guests typically spend much more, stay longer, and reduce turnover (meaning fewer cleaning fees for owners). Wolfe highlighted that, while international skier visits have inched back up post-pandemic, they remain well below earlier peaks.

This dip in international travel partners with sluggish hotel occupancy rates, which means hotels are now competing harder for guests who may otherwise prefer a short-term rental. The numbers reflect this reality: short-term rental occupancy dropped from 63% in July 2023 to 59% in July 2024, a 1.8% year-over-year slide based on data from the Colorado Tourism Office. For those managing Denver rentals, this adds pressure to boost marketing and improve guest experiences or risk lagging behind.

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

Still, there is some reason for measured optimism. Demand on platforms like Airbnb and VRBO is on an upswing through October 2025, though booking windows remain shorter than usual. One trend that continues to worry local owners is the shrinking share of domestic visitors opting for Colorado over other U.S. destinations—a pattern that started before the pandemic and has yet to reverse.

While state-level sales tax (at just 2.9%) is among the nation’s lowest, counties have hiked other rental-related taxes in many areas. Take Aspen and Steamboat Springs as examples: Aspen levies a 21.3% sales tax on short-term rentals, nearly twice as high as the rate for hotels, while Steamboat isn’t far behind at 20.4%. These differences create practical challenges for owners trying to balance nightly rates with cost competitiveness.

Rising Legislation: Navigating Changes for Rental Owners

Across Denver and Colorado’s resort towns, short-term rentals have become both an opportunity and a challenge. Statewide, local governments have been tasked with weighing the economic benefits—like property appreciation and tax boosts—against ongoing concerns such as affordable housing shortages and higher rental prices for local residents. When Colorado passed House Bill 1117 in 2021, it put more regulation power into the hands of local officials, resulting in an evolving patchwork of rules that owners must keep up with.

COSTRA’s leadership, along with representatives from Expedia and other industry voices, have identified several pending legislative efforts that could carry big consequences for property managers. A previous proposal from the Colorado Association of Ski Towns would’ve imposed a “vacancy tax” on empty homes to target housing shortages, an idea that was ultimately revised to exclude short-term rentals for the 2025 session after industry pushback. That bill didn’t advance, but the conversation is still active.

Early in 2025, Colorado lawmakers are preparing to debate a new excise tax bill, which would hand counties and statutory cities broad powers to impose taxes on any industry—including short-term rentals—without any preset limits. Jaclyn Terwey, government affairs manager for Expedia Group, pointed out that, while this proposal didn’t pass last year, it is likely to resurface soon.

“We are very nervous about this excise tax proposal, rightfully so. 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.”

In the background, there’s still talk about adjusting how short-term rentals are taxed for property purposes. Senate Bill 33 in 2024 tried to reclassify rentals from the residential to the commercial property tax bracket, but didn’t move forward. That said, Colorado’s budget pressures persist, and experts suspect that legislators could revisit property tax increases for the rental industry as they seek ways to address funding gaps.

For Denver-area property managers as well as those in ski country, these policy shifts aren’t just theoretical—they affect listings, occupancy, and bottom lines. Adapting to new regulations and taxes demands staying informed and often seeking local expertise or advocacy support. This is why alliances like COSTRA matter: they provide a united front and help keep property owners in the loop on fast-changing rules.

What Owners Should Watch For in 2025

Colorado’s short-term rental environment keeps property owners on their toes, whether they host in Denver’s downtown condos or the slopes of Summit County. The path forward is likely to see new tax measures proposed, renewed debates on vacancy and excise taxes, and continued focus on balancing community needs with economic growth. For anyone managing or considering investing in a rental, it’s never been more important to stay plugged in to these discussions.

Stakeholders are already looking toward the months ahead with a healthy mix of caution and hope. Owners and managers who want a stable and profitable rental operation must track policy changes, participate in their local chapters, and keep learning. There are no one-size-fits-all solutions, but with engaged groups like COSTRA and clear lines of communication, there’s a way forward—not just for individual property owners, but for the whole Colorado rental community.