Gatlinburg, Tennessee, nestled at the entrance of the Great Smoky Mountains, has become a prime location for short-term rental investments. With its year-round appeal to tourists, many property owners are exploring the potential of hosting on platforms like Airbnb. This guide delves into the legal framework, profitability metrics, and prime neighborhoods for Airbnb hosting in Gatlinburg as of 2025.
Understanding Gatlinburg’s Short-Term Rental Regulations
Before listing a property on Airbnb in Gatlinburg, it’s crucial to navigate the city’s regulatory landscape:
- Business License: Property owners must obtain a business license to operate a short-term rental legally. Source: Airbtics
- Tourist Residency (TR) Permit: For all short-term rentals within Gatlinburg’s city limits, owners must obtain and maintain a TR permit. These properties are subject to annual fire and safety inspections. Source: Gatlinburg Real Estate
- Zoning Restrictions: Short-term rentals are not allowed in certain zoning districts, such as R-1A Low Density Residential and R-2A Medium Density Residential. Source: GoSummer
- Tax Obligations: Hosts are required to collect and remit applicable taxes, including a combined sales tax rate of 9.5% (7% for Tennessee and 2.5% for Sevier County). Source: Airbtics
Staying updated with local ordinances is essential, as regulations may evolve. Regularly consult the City of Gatlinburg for the latest information.
Profitability Metrics: What Hosts Can Expect
Gatlinburg’s dynamic economy and tourist attractions contribute to a robust short-term rental market. Here’s an overview of key profitability indicators:
- Average Daily Rate (ADR): Approximately $335.3, reflecting the average rental revenue earned for an occupied room per day. Source: AirDNA
- Occupancy Rate: Around 55%, indicating moderate demand with booking opportunities. Source: AirDNA
- Annual Revenue: Average annual revenue stands at $47,523. Source: AirDNA
- Peak Revenue Month: May is identified as the month with the highest average earnings, indicating peak season in Gatlinburg. Source: Chalet
These figures underscore the potential for profitable Airbnb hosting in Gatlinburg, especially when properties are well-managed and strategically located.
Top Neighborhoods for Airbnb Hosting in Gatlinburg
Choosing the right neighborhood is pivotal for maximizing occupancy and revenue. Here are some of Gatlinburg’s most promising areas for Airbnb investments:
1. Chalet Village
- Highlights: A popular area known for its scenic mountain views and proximity to Ober Gatlinburg.
- Ideal For: Tourists seeking a tranquil setting with easy access to ski resorts and hiking trails. Source: The Weithouse
2. Downtown Gatlinburg
- Highlights: The heart of Gatlinburg, offering a vibrant atmosphere with shops, restaurants, and entertainment.
- Ideal For: Guests looking to stay within walking distance of major attractions. Source: Condé Nast Traveler
3. Glades Arts & Crafts Community
- Highlights: A unique area featuring local artisans, galleries, and craft shops.
- Ideal For: Travelers interested in arts, crafts, and a more cultural experience. Source: Airbtics
4. Cobbly Nob
- Highlights: A serene community offering golf courses and panoramic mountain views.
- Ideal For: Guests seeking a peaceful retreat with luxury amenities. Source: Great Smoky Mountains Cabin Rentals
5. Gatlinburg Falls
- Highlights: A resort community known for its upscale cabins and proximity to downtown.
- Ideal For: Families and groups looking for spacious accommodations with resort amenities. Source: Great Smoky Mountains Cabin Rentals
Conclusion: Navigating Airbnb Hosting in Gatlinburg
Gatlinburg’s appeal as a travel destination presents lucrative opportunities for Airbnb hosts. By adhering to local regulations, understanding market dynamics, and selecting prime neighborhoods, hosts can optimize their rental income. Continuous engagement with community guidelines and market trends will ensure sustained success in Gatlinburg’s short-term rental landscape.
