STR Market of the Month: Gulf Shores, Alabama - More Than a Summer Vacation Spot

The Alabama Beach Market Printing $200K+ (And Why It's Still Wide Open)

Our STR Market Pick for March is one of the most iconic beach destinations in the South: Gulf Shores, Alabama.

If you're picturing crowded summer beaches and families hauling coolers across sugar-white sand—you're not wrong.

But here's what most investors miss:

Gulf Shores isn't just a summer town. It's a $1B+ STR economy drawing more than 8.3 million visitors annually, with municipal support for short-term rentals that most coastal cities abandoned years ago.

Let's break down why this market deserves a fresh look if you're hunting for your next profitable Airbnb investment.

Short-Term Rental Market Overview: Gulf Shores, AL

Stretched along 32 miles of Gulf of Mexico coastline, Gulf Shores anchors the Alabama Gulf Coast—a region defined by those famous sugar-white beaches and family-friendly attractions.

But here's what makes it different from other beach towns:

The guest profile is surprisingly diverse.

Gulf Shore Airbnbs attract:

• Families – The primary segment, booking weekly summer beach vacations
• Multi-family groups – Renting large beach houses for reunions and group trips
• Couples – Off-peak romantic getaways and festival attendees
• Snowbirds – Long-stay winter guests escaping northern states (January–February)
• Pet owners – A high-demand segment that's seriously underserved

Why Gulf Shores Should Be on Every STR Investor's Radar

Let's start with the obvious: the numbers are massive.

Baldwin County sees over 8.3 million tourists annually, generating $7B+ in visitor spending and supporting 60,000+ jobs. Recent data shows the area added roughly 1,000 new rental units in the past 18 months—and demand is still absorbing the supply.

But volume isn't the only story.

The top end of this market is insane. Top-quartile properties—think large beach houses with private pools—earn $100K–$200K+ annually. That's not a typo.

What's Driving Airbnb Demand in Gulf Shores?

Yes, the beaches are the main event. But here's what keeps bookings flowing:

• Gulf State Park – 6,500 acres with trails, fishing, and new glamping additions
• Hangout Music Festival (May) – Draws 40,000+ attendees annually
• Fishing & Boating – Deep-sea charters, Orange Beach marinas, major tournaments
• Family Entertainment – Waterville USA waterpark, Alabama Gulf Coast Zoo
• Ecotourism – Dolphin cruises, Bon Secour National Wildlife Refuge, kayaking
• The Shrimp Festival (October) – A massive shoulder-season crowd-puller

Event tourism is a major demand driver for Airbnbs. And it pushes ADRs higher during weeks that would otherwise be quiet.

Gulf Shores STR Performance Snapshot

Based on current market data (2024–2025):

• Average Daily Rate (ADR): ~$415
• Average Annual Occupancy: ~59%
• Revenue per Available Rental (RevPAR): ~$244
• Typical Annual Revenue: ~$50K (median 2BR condo)
• Top-Quartile Annual Revenue: $100K–$200K+ (large beach houses)

Gulf Shores STR Seasonality breakdown:

• Peak (May–August): 80–90% occupancy, ADRs $400–$500+. July is the king—absolute peak month can hit $9,100+ in revenue with ADRs up to $522.
• Shoulder (March–April, September–October): Strong demand from spring break, fall fishing, and Shrimp Fest. Occupancy ~50–65%.
• Off-Peak (November–February): Lowest demand (20–30% occupancy), but snowbird monthly rentals offer a reliable floor.

Market Gaps & Real Opportunities for Airbnb Investors

Gulf Shores has hundreds of active STRs. That means it's saturated, but not necessarily saturated with what guests really want.

Here are a few market gaps serious hosts can exploit to stand out:

Pet-Friendly Units

Only ~9% of current rentals allow pets. Pet-friendly homes charge a ~22% higher ADR. If you can add a fenced yard and simple pet amenities, you're capturing premium demand with very little competition.

Group-Sized Luxury Homes

Large (4–8+ bedroom) beachfront homes with private pools and bunk rooms continue to see exceptionally strong demand. Despite new supply, these properties still command top dollar.

Unique Stays

Domes, treehouses, glamping—these are rare in Gulf Shores. But they attract serious niche audiences willing to pay premiums for something different than the standard beach rental.

Group Retreats

Multi-unit properties or compounds that can host weddings, family reunions, and retreats are in short supply relative to demand.

Snowbird Optimization

Properties intentionally configured and marketed for monthly winter stays (January–February) can turn the low season into reliable revenue.

Are Short-Term Rentals Allowed in Gulf Shores?

Short-term rentals are not just allowed—they're actively supported.

Here's what you need to know about STR regulations in Gulf Shores:

Licensing Requirements:

• Business License: Required for all STR operations within city limits and police jurisdiction
• Rental License: $45 per unit, required for properties rented for less than 180 consecutive days
• Application: Available online through the Gulf Shores Licensing Portal or in-person at City Hall

Tax Structure (Combined Rate: Approximately 13–15%):

• State Lodging Tax: 4% on rental amount + cleaning fees
• Baldwin County Lodging Tax: 2% on rental amount + cleaning fees
• City of Gulf Shores Lodging Tax: Varies by property type (typically 3–7%)

Unlike coastal cities from California to the Carolinas that are banning or capping STRs, Gulf Shores remains actively supportive. There are no bans or caps in tourist zones.

This is a city that understands STRs are core to its tourism economy.

One caveat: Some condo complexes have their own HOA restrictions. Always check before you invest.

The Playbook for Investing in Airbnbs in Gulf Shores

1. Prioritize Beach Access

Gulf-front or walk-to-beach access is the #1 driver of ADR. If you can't get beachfront, get as close as possible.

2. Go All-In on Pet-Friendly

That 22% ADR premium is real. Offer fenced yards, pet stations, and clear pet policies. You'll capture a loyal, repeat-guest segment.

3. Add High-Impact Amenities

Private pools, game rooms, and EV chargers separate top performers from average listings. Game rooms alone can add significant ADR.

4. Design for Distinction

Bold interiors, "funky" architecture, or premium outdoor living spaces help listings stand out in search results. In a market full of beach-themed rentals, different sells.

5. Master Event Pricing

Dynamically price around Hangout Fest, Shrimp Fest, and major fishing tournaments. These events drive massive short-term demand spikes.

Dynamic pricing tools can help you get the best rate. Try PriceLabs for 30 days here.

Risks and Considerations

No market is perfect. Here's what investors need to know:

• High Seasonality: Income is heavily concentrated in summer months. You need a strategy for shoulder and low seasons (snowbird rentals, event-driven pricing, experience-driven amenities).
• Supply Growth: Active listings are up ~8% year-over-year, with 1,000+ new units added recently. Competition is real—but so is demand. You can't launch something mediocre here. You need to go above and beyond from day one and give guests something they can't get anywhere else.
• Climate Exposure: Hurricane risk means higher insurance costs. Hurricane/wind coverage is typically included in homeowners' policies, but flood insurance is a separate required policy. Average homeowners' insurance in Alabama is ~$2,153/year, but coastal areas run higher.
• HOA Restrictions: While the city is STR-friendly, many individual condo complexes have their own restrictions. Always review HOA covenants before buying.

The Takeaway

A strong market gets you in the door. But strategy is what separates top performers from average listings.

Gulf Shores rewards investors who:

• Understand their specific guest segments (families, groups, snowbirds, pet owners) and find ways to exceed their expectations
• Exploit clear gaps like pet-friendly policies
• Invest in amenities that actually enhance the guest experience(private pools, game rooms, beach access)
• Navigate seasonality with intentional pricing and positioning

The market is proven. The municipal support is solid. And the gaps are wide open for investors willing to execute with intention.

Want to go deeper?

In the full Gulf Shores market report, we break down:

• Real numbers, not guesses – Financial breakdowns for 6+ example properties, from a $305K entry-level home to a $5.5M trophy asset (so you can see what realistic returns look like at every level)
• Which entry point fits your goals – Affordable starter? Mid-market family play? Luxury beachfront? We show you the cash-on-cash returns for each
• How to qualify without a W2 – DSCR loan strategies that let you qualify based on property performance, not personal income

And yes, it's included with your membership—along with every past market report and every vetted deal we've shared.

Neat, right?

👉 Join the Host Camp Community for $1 to access it all.

Plus our full library of hidden-gem STR markets, courses, coaching, and investor tools.

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