Cottonwood, AZ Airbnb Market Data, Statistics, and Occupancy Rates

Cottonwood Short-Term Rental Market Overview

Cottonwood, AZ sits in the heart of Arizona's Verde Valley — a region known for its wine trails, proximity to Sedona, and year-round outdoor recreation — making it a draw for leisure travelers looking for a more affordable base. With 208 active Airbnb listings, an average daily rate of $195 (well below the $434 state average), and average annual revenue of $28,318, the market offers accessible entry points but demands careful deal selection given a 36% occupancy rate that trails the 53% state benchmark. The ROI score of 53 out of 100 reflects a competitive landscape where investor interest is strong, yet tighter supply-demand dynamics and moderate revenue-to-price ratios mean the best returns will go to operators who differentiate on property quality and guest experience.

Key Market Statistics

According to Rabbu market data, the Cottonwood short-term rental market shows:

Data sources: Rabbu proprietary analytics as of Apr, 27 2026 and Zillow Home Value Index (ZHVI) as of Mar, 17 2026.

Why Investors Consider Cottonwood

Cottonwood appeals to investors seeking affordable entry into Arizona's tourism corridor, where wine country charm and Sedona overflow demand create a steady — if competitive — rental opportunity.

Expert Market Assessment

"Cottonwood represents a moderate opportunity for STR investors who are willing to be strategic about property selection and operations. Seasonality is a meaningful factor — March and April deliver revenue that's roughly double the January lows, so budgeting for softer summer and winter months is critical. The market's above-average occupancy stability is an encouraging sign, but the below-average supply/demand balance and rapid listing growth suggest the window for easy returns is narrowing. Investors who target 3-bedroom or larger properties, which show stronger RevPAN and occupancy figures, will be best positioned to capture outsized returns relative to the competition."

— Rabbu Market Analysis Team

Key Airbnb Metrics & Trends in Cottonwood

Average revenue by month in Cottonwood

March is the clear peak at $3,492, followed closely by April at $3,012, while January marks the low point at $1,735 — a roughly 2x seasonal swing that investors should build into their cash-flow projections. The fall shoulder season offers a secondary uptick in October ($2,628), providing some relief between the slower summer and winter months.

Active Airbnb listings by property size in Cottonwood

One-bedroom units dominate supply with 67 listings (32% of the market), while 3-bedrooms follow at 52 and 2-bedrooms at 48. Larger properties — 4-bedroom and above — are notably underrepresented with just 25 total listings, which could signal less competition and a differentiation opportunity for investors willing to acquire bigger homes.

Average daily rate (ADR) by property size in Cottonwood

ADR climbs steadily from $104 for studios to $306 for 4-bedrooms, then jumps sharply to $670 for 5-bedroom properties before dropping to $457 for 6+ bedrooms. The steepest premium-per-bedroom gains appear in the 4- and 5-bedroom segments, where limited supply allows hosts to command significantly higher nightly rates.

Average RevPAN by property size in Cottonwood

Five-bedroom properties deliver the highest RevPAN at $164, nearly double that of 3-bedrooms ($89) and more than four times studios ($35). This suggests that despite lower occupancy rates, the premium ADR on larger homes more than compensates, making them the most efficient revenue generators on a per-available-night basis.

Average occupancy rates by property size in Cottonwood

Three-bedroom units lead occupancy at 43%, followed by 2-bedrooms at 38%, while larger 5-bedroom (25%) and 6+ bedroom (27%) properties sit at the low end. For investors prioritizing consistent bookings and cash-flow stability, mid-sized 2- and 3-bedroom properties offer the most reliable demand in Cottonwood.

Average monthly revenue by property size in Cottonwood

Monthly revenue scales meaningfully with size — studios bring in about $1,000, while 6+ bedroom properties average $6,814 per month. The jump from 3-bedrooms ($2,977) to 4-bedrooms ($3,711) is proportional, but the leap to 5-bedrooms ($5,767) represents a 55% increase that reflects the outsized earning potential of larger, premium properties in this market.

Average annual revenue by property size in Cottonwood

Annual revenue ranges from $12,011 for studios to $81,771 for 6+ bedroom homes, with the sharpest dollar increase occurring between 4-bedrooms ($44,542) and 5-bedrooms ($69,205). Given average home values of $518,363, investors focused on return potential should evaluate whether the acquisition cost differential for larger properties is justified by the substantially higher annual revenue.

Most common amenities for Airbnb listings in Cottonwood

Parking (97%) and kitchen access (93%) are near-universal, reflecting the car-dependent, self-catering nature of Cottonwood stays. Outdoor living amenities — outdoor furniture (82%), patios (78%), backyards (75%), and BBQ grills (72%) — dominate the middle tier, signaling that guests in this market strongly value properties that let them enjoy Arizona's climate, while hot tubs (24%) and pools (14%) remain differentiators rather than expectations.

Understanding Cottonwood's ROI Score: 53/100

Rabbu's ROI Score is a proprietary metric that evaluates short-term rental investment potential based on multiple factors.

How the ROI Score is Calculated

What This Means for Investors

Cottonwood's ROI score of 53 out of 100 places it in the 'Competitive Opportunity' band, meaning the market has genuine upside but requires sharper execution to capitalize on it. Occupancy stability rates above average, which is a positive signal for cash-flow reliability, but the below-average supply/demand balance — fueled by 105% year-over-year listing growth — means new entrants face stiffer competition for bookings. Investors should pair this data with thorough local regulatory research and focus on property types that command stronger RevPAN to tilt the economics in their favor.

Short-Term Rental Regulations in Cottonwood

Understanding local STR regulations is essential before investing in Cottonwood. Here's the current regulatory landscape:

Permit Requirements

In Cottonwood, Arizona, short-term rental operators should verify whether a local business license or STR registration is required before listing a property. Arizona state law generally limits municipalities' ability to ban STRs outright, but cities can still impose reasonable regulations, so checking with Cottonwood's planning or zoning department is essential.

Key Restrictions

Common restrictions that may apply include occupancy limits tied to bedroom count, noise and nuisance ordinances, parking requirements for guests, and potential HOA rules that could restrict or prohibit short-term rentals in certain communities. Investors should also be aware that some jurisdictions impose minimum-stay requirements or cap the total number of permitted STR properties in a given area.

Tax Obligations

Arizona requires STR operators to collect and remit Transaction Privilege Tax (TPT), which functions as a sales tax on lodging, along with any applicable county or city surcharges. Many booking platforms like Airbnb collect and remit these taxes on behalf of hosts, but operators should confirm their specific obligations with the Arizona Department of Revenue.

Regulations subject to change. Always verify with local authorities before purchasing. A Rabbu partner agent specializing in Cottonwood can provide current regulatory guidance.

Future Outlook & Long-Term Forecast

"Over the next 12–18 months, Cottonwood's STR market is likely to see continued spring-season strength, with March and April remaining peak revenue months. ADR may edge up modestly — perhaps 1–3% — as the broader Verde Valley tourism economy grows, though occupancy is expected to hover in the 34–40% range given the current supply trajectory. Year-over-year listing growth of 105% signals rising competition, so investors entering the market should plan for occupancy pressure and focus on larger or well-amenitized properties that command premium nightly rates."

— Rabbu Market Analysis Team

Frequently asked questions about Airbnb in Cottonwood, AZ

What is the average Airbnb occupancy rate in Cottonwood?

The average occupancy rate for Airbnb listings in Cottonwood is currently 36%, which falls below the Arizona state average of 53%. Occupancy varies by property size — 3-bedroom units lead at 43%, while studios and 1-bedrooms hover around 33–34%. Seasonality also plays a significant role, with spring months driving the highest booking activity.

How much do Airbnb hosts make in Cottonwood?

On average, Airbnb hosts in Cottonwood earn approximately $2,359 per month or $28,318 per year based on trailing 12-month performance data. Earnings vary considerably by property size: studios average around $12,011 annually, while 6+ bedroom properties can generate up to $81,771 per year. Peak months like March can push monthly revenue above $3,400.

Is Cottonwood a good market for Airbnb investment?

Cottonwood earns an ROI score of 53 out of 100, placing it in the 'Competitive Opportunity' category. The market benefits from above-average occupancy stability and its position in Arizona's Verde Valley tourism corridor near Sedona. However, rapid supply growth (105% year-over-year) and a below-average supply/demand balance mean investors need to be selective — targeting well-amenitized, larger properties tends to yield the best results.

What is the average daily rate (ADR) for Airbnb in Cottonwood?

The average daily rate for Airbnb listings in Cottonwood is $195, which is significantly below the Arizona state average of $434. ADR scales with property size, ranging from $104 for studios up to $670 for 5-bedroom properties. This lower rate structure reflects the market's positioning as an affordable alternative to nearby higher-priced resort destinations.

Are short-term rentals legal in Cottonwood?

Arizona state law generally prohibits municipalities from outright banning short-term rentals, so STRs are broadly permitted in Cottonwood. However, local regulations such as business licensing, noise ordinances, occupancy limits, and parking requirements may still apply. Investors should check with Cottonwood's city offices and review any applicable HOA restrictions before purchasing a property for STR use.

When is peak season for Airbnb in Cottonwood?

Peak season in Cottonwood runs from March through April, when average monthly revenue reaches $3,492 and $3,012 respectively. This aligns with ideal weather for outdoor activities and wine country tourism in the Verde Valley. The softer months tend to be January ($1,735) and August ($1,938), creating a roughly 2x revenue spread between peak and off-peak periods.

How many Airbnbs are there in Cottonwood?

As of April 2026, there are 208 active Airbnb listings in Cottonwood. The supply is concentrated in smaller properties — 1-bedroom units make up the largest segment with 67 listings, followed by 3-bedrooms (52) and 2-bedrooms (48). The market has seen significant growth, with active listings increasing 105% year-over-year.

How is Airbnb revenue calculated in Cottonwood?

The annual and monthly revenue figures for Cottonwood are derived from the trailing 12 months of historical booking performance for active comparable Airbnb listings in the market — they are not forward-looking projections. Rabbu averages each comparable listing's actual revenue per available night (RevPAN) by month over the past year, removes regional outliers, and rolls the remaining data into a market-level historical average. This approach anchors the figures to what hosts have actually earned recently while naturally reflecting seasonal peaks and slower months, since each month uses its own historical performance. Individual results can vary based on property quality, pricing strategy, and how actively the listing is managed.

About Rabbu Market Data

Rabbu provides Airbnb and short-term rental market data and statistics across the United States. Our mission is to empower investors with accurate insights and easy-to-use tools, so they can confidently identify and act on the best opportunities in the Airbnb market.

What this data includes

• Regularly updated active Airbnb and STR listing counts for the Cottonwood market
• Average daily rate, occupancy, and RevPAN trends by property size and month
• Annual and monthly revenue benchmarks based on trailing 12-month booking data
• Home value estimates sourced from the Zillow Home Value Index (ZHVI)
• Data aggregated from multiple providers and Rabbu proprietary analytics for consistency

Sources and disclaimers

Rabbu proprietary analytics as of Apr, 27 2026 and Zillow Home Value Index (ZHVI) as of Mar, 17 2026. Revenue projections are estimates based on comparable properties and do not guarantee future performance. Data reflects trailing 12-month averages and market conditions as of the dates noted; actual results may differ due to changing local regulations, economic conditions, or property-specific factors. Investors should independently verify all local STR regulations, tax obligations, and HOA restrictions before purchasing a property.