Under the city's STR property owner responsibilities, the permit costs $210 a year for each rental unit, and the fee is nonrefundable and nontransferable.
The figure in most investment pitches usually comes from a market-wide average, and Sedona's latest one is far better than the market under it.
A 40% raise that the nightly numbers don't support
AirDNA's Sedona market page, updated October 27, 2026 with data through September 2026, reports these year-over-year changes:
| Metric, trailing 12 months through Sept. 2026 | Value | Change vs. Sept. 2025 |
|---|---|---|
| Active listings | 3,727 | down 14.1% |
| Average annual revenue per listing | $63.3K | up 40.2% |
| Occupancy | 57% | up 7.9% |
| Average daily rate | $337 | down 4.7% |
| RevPAR | $193 | up 2.6% |
The last row tells you how to read the rest. AirDNA defines RevPAR as occupancy multiplied by average daily rate, and calls it "the truest measure of earning power per available night." Over the same 12 months, earning power per available night rose 2.6%, guests paid 4.7% less per booked night, and revenue per listing rose 40.2%.
AirDNA doesn't give a reason for the gap, and its revenue figure includes cleaning and other guest fees. Here is our reading. If each available night earns about what it did a year ago, a 40% rise in revenue per listing suggests the listings still in the count are open for more nights. AirDNA counts a listing as active if it was available or booked at any point in the trailing 12 months. So a home rented for a few holiday weeks counts as one listing, and so does a home rented year-round. When the count drops by about one in seven and per-listing revenue jumps, we think the more likely explanation is that more of the remaining listings rent most of the year, not that each home suddenly earns 40% more.
That reading fits how Sedona-area owners have described their own rentals. In a study by RRC Associates for the Sedona-Verde Valley Association of Realtors, reported by Sedona Red Rock News in March 2025, 82% to 87% of STR owners said they block out days each year, most often for their own use. Surveyed owners said they rented their units an average of 34.5 weeks a year and used them 3.8 weeks. A market full of part-time hosts will post a lower average than a market of full-time operators, even when every home earns the same amount per night.
For a buyer, $63.3K is the average across whichever homes are still listed. It does not forecast what a particular West Sedona house will earn.
Three different counts called "Sedona"
The listing count has its own problem: it isn't the city. The City of Sedona's official STR counts, as reported by Sedona Red Rock News, went from 1,138 in December 2018 to 1,218 on February 28, 2025. The city's FY 2026-2027 budget still describes "over 1,200" STR properties. Across a stretch that included a pandemic travel boom, the number of permitted rentals inside city limits barely changed.
Here are three numbers you will see quoted:
- 1,218: the City of Sedona's official STR count within municipal boundaries on February 28, 2025. The FY 2026-2027 budget describes "over 1,200" STR properties without giving an exact figure.
- 2,438: active STRs inside City of Sedona limits as of July 2024, from RRC's analysis of AirDNA records. The same study counted 895 in the Village of Oak Creek as a separate area.
- 3,727: AirDNA's "Sedona" market as of September 2026. Since June 2026, AirDNA has mapped U.S. markets as "specific areas" that don't follow city or ZIP code lines.
There are several reasons the platform counts run higher than the permit count. The city defines a short-term rental as a stay of fewer than 30 consecutive days. RRC noted that AirDNA listings can include hotel units, timeshares and units rented only for 30 days or more. When a pitch compares a West Sedona house with "the Sedona market," some of the competition in that comparison is hotel rooms and timeshare units, which a house doesn't really compete with in the same way.
Sedona STR rules and enforcement in 2026
According to the city's short-term rental page, Sedona requires a state TPT license before it will accept a city STR application. It also requires a separate permit for each advertised unit. The owner responsibilities page lists other requirements, including $500,000 in aggregate liability insurance, named owner and emergency contacts, notice to neighbors, and the permit number shown in every ad.
The city's vacation rentals page lists three recent changes:
- October 23, 2025: the city began denying permit applications and renewals that have missing or invalid information.
- January 1, 2026: late renewals now carry a one-time $50 fee if 2 to 90 days late, or $100 if more than 90 days late, and citations may still apply.
- Events: STR special-event advertising and hosting are prohibited, and violations can lead to citations, penalties, or permit revocation for one year.
The 2025 amendments also limit STR use of accessory dwelling units. The city's owner responsibilities page says penalties for STR code violations run from $500 to $3,500, and permits can be suspended for up to 12 months.
The city enforces these rules. The FY 2026-2027 budget lists these FY26 results: 98% average permit compliance, a dedicated STR code enforcement officer hired, 98 properties cited for permit, TPT license or emergency contact problems, two cited for operating as wedding or event venues, and 71 rentals investigated for illegal second kitchens.
The city's vacation rental FAQ says it does not cap how many STRs can operate within city limits. The permit count stayed near 1,200 without a cap.
Why the Village of Oak Creek runs on a different rulebook
The Village of Oak Creek is unincorporated and sits under Yavapai County. The county's development FAQ addresses STRs in permitted habitable structures and restrictions on events such as weddings, parties, specialized retreats and commercial activities. Comparing a West Sedona house with one in the Village means comparing two different sets of requirements. HOA rules on either side can add more.
The 2026 bill that didn't pass
The Arizona Legislature considered HB2429 this year. Early versions would have let cities limit STR numbers, but that language was removed. The version that passed the House addressed party-house occupancy and license suspensions, and KNAU reported in March 2026 that Sedona officials said it would not meaningfully address housing affordability. The bill passed the House on March 16, 2026 and is recorded as held in the Senate. The city's pending legislation page says no meaningful, active STR legislation is moving through the Legislature.
Frequently Asked Questions
Is the 3,727 listing figure the number of homes I'd compete with in West Sedona? No. It covers AirDNA's whole Sedona market area, which doesn't follow city limits and can include hotel units, timeshares and 30-day-plus rentals.
Are most Sedona STRs owned by large operators? In RRC's assessor-based analysis, 92% of identified STRs in Sedona, Cottonwood and Prescott belonged to owners of a single STR unit.
This post is general information, not legal, tax or financial advice. Please confirm the permit, insurance and tax requirements for your own property with the City of Sedona, Yavapai County, or a qualified professional.
If you're weighing a West Sedona rental, we can help you figure out how many nights a year the house would really be available. Alec focuses on short-term rental investments for Cindy Chapman Group, and we're happy to go through the numbers with you before you make an offer. Schedule your complimentary Sedona home consultation.