Sedona Rental Report: October 2026

This is the first issue of a monthly report on Sedona’s short-term rental market, built from public records: the city’s monthly tax reports, its permit program, and state and city documents. No listing-platform scraping, no paid dashboards, and, by design, no home-sale data. Sales live on the selling page. This report is about how the rental business itself is doing.

Revenue: what the bed tax says

Sedona charges two lodging taxes of 3.5 percent each. The city reports one of them monthly as “bed tax,” and because every hotel night and every short-term rental night pays it, the series is the closest public measure of total lodging revenue in the city. Divide collections by 3.5 percent and you have taxable room revenue.

Fiscal 2026 was the best year on record for lodging revenue in the city, finishing 13 percent above the city’s own budget. March 2026 was the single highest month in the city’s history at $1,268,377, and spring 2026 ran 9 to 25 percent ahead of spring 2025 every month.

Then the new fiscal year opened down. July 2026 came in 27 percent below July 2025, which the city attributes partly to timing of payments and partly to the Pocket Fire. August was 1 percent below August 2025. Two months into fiscal 2027, bed tax is 6 percent below the city’s budget. One soft summer after a record spring is not a trend yet, and the fall months, which are the second peak, will say whether it is.

Hotels and rentals are not reported separately in the public series. In March 2026 city staff told the Tourism Advisory Board that hotels, timeshares and online travel agencies produced about 60 percent of bed tax through November 2025 and short-term rentals about 40 percent verify. On fiscal 2026 collections, that puts rental room revenue in the city somewhere near $120 million a year. Treat that as an order of magnitude, not a figure.

Sources: NAU Alliance Bank Economic Policy Institute, city tax collections code 144, FY2024, FY2025 and 2025 bed tax summary; City of Sedona monthly Sales and Bed Tax Reports for March, June, July and August 2026; Tourism Advisory Board, March 3, 2026, as summarized by Citizen Portal.

Supply: the permit count

The city counted 1,440 permitted short-term rental units on 1,300 parcels in June 2026, which it puts at 18.98 percent of residential housing. That is 81 more permits than a year earlier, about 6 percent growth, with 98 to 99 percent of operating rentals holding a permit. Since December 2024 each advertised unit needs its own permit, so a house with a casita counts twice; the parcel count is the better measure of how many properties are rentals.

Two cautions when reading the share. The city has not published the housing-unit denominator behind 18.98 percent, and the switch to per-unit permits in December 2024 lifted the unit count without adding properties. The direction is not in doubt: supply has roughly tripled since 2020 and is still growing, and with state law blocking any cap, it will keep growing as long as the revenue holds.

Sources: City of Sedona City Talk columns of June 26, 2024 and June 24, 2026; city short-term rental page; KOLD, February 4, 2025; Red Rock News, February 28, 2025.

Demand: occupancy and rates

The city tracks lodging performance through its Tourism Market Indicators, using hotel data from STR and short-term rental data from Key Data. Its figures run lower than the numbers investors see on listing-data sites, because they count every listed night, not only the nights an owner made available.

Two things stand out. Rental rates rose 11 percent in a year while occupancy barely moved, which says guests are paying more for the same nights, not that houses are fuller. And in April 2026 the city reported hotels down 7.2 percent in occupancy with room rates up 9.1 percent, while “short-term rentals and timeshares reported stronger activity.” Rentals have been taking share from hotels on a flat total.

For comparison, AirDNA’s public Sedona market page shows occupancy near 57 percent on an available-nights basis, which is the figure most lenders and buyers quote. The city’s number counts dormant and owner-blocked nights, which is why it is half as large. Both are true; they measure different things. The calculator uses the available-nights convention.

Sources: City of Sedona Tourism Market Indicators, 2023 and December 2024; city April 2026 tax report; AirDNA Sedona market page.

Rules: what changed this month

• Nothing new at the city. The late-fee schedule that took effect January 1, 2026 and the denial of incomplete renewals are the most recent changes. The full set is on the rules page.
• The state session is over. The two 2026 bills that would have changed Sedona most, an occupancy cap of two guests per bedroom and permit caps for towns under 70,000 people, died without a Senate vote. Both will be back in January.
• Watch the Mobilodge case. The Court of Appeals ruled in November 2025 that the city cannot bar rentals at a mobile-home park; the city indicated it would appeal status unverified.
• Renewal season. Permits run one year from issue. Owners who permitted in the first wave of early 2023 are now on their fourth renewal; two days late costs $50, ninety days costs $100.

What this means if you own one, or want one

Will’s read, which is opinion, not data.

• Owners: Fiscal 2026 was the best lodging year the city has recorded, and permits grew about 6 percent against it. A soft July and August after a record spring is normal seasonality plus a fire, not a collapse. If you are tired, the market that pays for a proven history is still here; if you are not, the numbers do not say sell.
• Buyers: Rates are doing the work, not occupancy. Underwrite on the city’s flat occupancy and a rate that has risen for three years, and be honest about the fact that every new permit competes for the same guests. Run it through the calculator before you believe a listing.
• Everyone: The fall reports, September through November, are the test. Those months were the second peak in 2025. If they come in ahead of last year, the summer dip was weather and fire. If not, the first flat year since the permit program began has started.

Next issue: late November, with the September and October tax reports. Subscribe to get it by email.