Tennessee has always punched above its weight when it comes to tourism, with the music scenes of Nashville and Memphis, the peaks of the Smokies, and the charm of small mountain towns. Needless to say, the state pulls in visitors from every direction, and they're booking short-term rentals in droves. But strong demand doesn't mean it's automatically one of the best Airbnb markets in Tennessee!
Some cities are overbuilt, while others have complicated regulations. And more than a few look good on paper, but fall short once you really look at the numbers. To help you out, we've identified five markets in Tennessee that stand out, not just for their popularity, but for their performance.
Using data from SummerOS, we narrowed down the five best Airbnb markets in Tennessee to:
- Nashville, TN: Best city for urban tourism
- Gallatin, TN: Best for low-competition access to Nashville
- Pigeon Forge, TN: Best city for family-friendly attractions
- Sevierville, TN: Best city for Smoky Mountain access
- Knoxville, TN: Best city for campus-related travel
How we picked the best Airbnb markets in Tennessee
To start, we looked at statewide STR data from SummerOS and filtered down to the markets showing real returns for hosts. From there, we focused on the ones that offer something more than just high occupancy.
Here's what we considered:
- Reliable performance: Markets where rental income isn't spiking one month and crashing the next.
- Strong pricing power: Healthy average daily rates (ADR), not just cheap bookings.
- Good ROI: Home values that make sense when stacked up against potential revenue.
- Legal clarity: Local rules and regulations that are clear and uncomplicated.
- Unique demand drivers: Tourism, events, special scenes, or economic activity that keep guests coming.
Using this criteria, we found five different markets with different strengths. But, each of them are guaranteed to have serious earning potential. Not every market will be right for your strategy, but each one is worth a closer look.
Now with SummerOS, you can analyze revenue, market trends, and occupancy rates for every market in the U.S. From revenue projections to competitive set analytics, SummerOS empowers you to build your Airbnb portfolio with confidence. Find your next Airbnb investment opportunity with SummerOS!
1. Nashville, TN: Best city for urban tourism
It's no surprise that Nashville tops the list for Tennessee's urban tourism scene. The "Music City" draws millions of visitors each year for its cultural–and especially music–attractions and vibrant nightlife.
This demand allows local hosts to charge premium prices of around $350 per night on average, pushing the annual gross revenue to about $62,839 for a typical listing. Occupancy sits at 59%, which isn't the highest in the state, but that's largely due to fierce competition with over 2,500 active rentals in the market.
In other words, Nashville's calendar may not be full every night, but when bookings come in, they come at great prices. For investors, the trade-off is clear: property prices average a hefty $1.08M, one of the highest in Tennessee, yet many are still willing to pay that entry price to get in this tourism powerhouse that hasn't been showing any signs of slowing down.
2. Gallatin, TN: Best for low-competition access to Nashville
Not every profitable Airbnb market in Tennessee is a household name. Gallatin, a small city about 30 miles northeast of Nashville, proves that being near the action can sometimes beat being in the middle of it.
With only about 50 short-term rentals in town, hosts in Gallatin enjoy minimal competition compared to Nashville's crowded scene. This low supply helps keep occupancy around 60%, on par with the big city.
Guests choose Gallatin for its more relaxed vibe and easy access to Nashville, which is slightly over 30 minutes away–the perfect day trip.
Investors are also taking note of Gallatin's numbers: an average home price of about $546,000 (roughly half of Nashville's) and a typical gross revenue of $38,882 annually. The daily rates (ADR of $232) are more modest than Nashville's, but hosts make up for it by capturing visitors looking for better value outside the metro.
In Gallatin, you won't get the nightlife on your doorstep, but you will get steady bookings from visitors attending Nashville events, exploring the nearby Old Hickory Lake, or visiting local colleges, all with far fewer hosts vying for those guests.
If you're looking for a foothold in the Nashville market without a major price tag or regulatory complications, Gallatin hits the sweet spot of affordability and consistency, while still being in close proximity to Tennessee's tourism capital.
3. Pigeon Forge, TN: Best city for family-friendly attractions
Pigeon Forge is the area to invest in for family fun in Tennessee. Home to Dollywood, this mountain town has crafted an entire economy around entertaining all ages. Tourists flock here by the millions, and it shows in the rental data.
Occupancy averages 64%, higher than both Nashville and Gallatin, and hosts command a solid $300 ADR leading to about $63,316 in yearly gross revenue on a typical property. This offers a compelling balance: property values of around $886,000 on average are high but not as steep as Nashville's, yet its potential annual income is similar.
The difference? Pigeon Forge's bookings tend to be more consistent across peak vacation seasons (though bookings tend to swing from quiet to packed depending on when, despite yearly numbers holding strong). Families plan trips here months in advance, filling up the calendar for summers, holidays, and school breaks.
It's a mid-sized market with over 1,000 rentals, so it's competitive but not oversaturated. Many of these rentals are large cabins designed for groups with amenities like hot tubs, BBQ grills, and pools, which can charge more per night.
The key to Pigeon Forge's success is its steady stream of attractions like theme park rides, go-kart tracks, the Smoky Mountain Alpine Coaster, and even the famous Dollywood Express steam train. All these mean that hosts often see fully booked weekends and summers.
4. Sevierville, TN: Best city for Smoky Mountain access
For investors eyeing the Great Smoky Mountains, Sevierville stands out as the gateway to unrivaled STR performance. This city is nestled at the foot of America's most visited national park (a natural wonder that saw roughly 12 million visitors last year) translating directly into rental income.
You won't be alone in thinking that Sevierville is a good investment. It hosts more than 2,500 rentals yet demand still outstrips the large supply. The typical Airbnb here boasts an occupancy rate of around 66%, the highest of Tennessee's top markets, and an ADR of $378 a night. Add that up, and you get an impressive average gross revenue of $78,085 per year, outperforming every other city on this list.
So what's driving these high numbers? In Sevierville, it's all about location and experience. Guests come for immediate access to the Smokies and they stay for the unique mountain-town atmosphere. Many rentals cater to this with hot tubs, grills, and even panoramic decks, creating a cabin retreat experience that commands top prices.
Despite an average home price of about $904,000–luxury cabins don't come cheap–investors see strong ROI because travelers are willing to pay a premium for proximity to the park and the comforts of a mountain home. Plus, Sevierville benefits from spillover attractions: it's Dolly Parton's hometown and it's only minutes away from Pigeon Forge.
The result is a market that combines natural beauty with entertainment, with year-round booking potential.
5. Knoxville, TN: Best city for campus-related travel
Knoxville may fly under the radar compared to Tennessee's tourist hubs, but this college city quietly delivers steady returns for Airbnb hosts. Home to the University of Tennessee's flagship campus, Knoxville sees a reliable influx of visitors tied to the academic calendar and sports seasons.
On big game weekends, Airbnb demand surges as Neyland Stadium fills up and hotels sell out. And this results in some impressive numbers: Knoxville rentals enjoy a strong 65% occupancy rate on average throughout the year. But, even when school's not in session, Knoxville's role as a regional hub keeps tourists and business travelers coming.
From an investment standpoint, Knoxville shines as an affordable, steady performer. The average home price is about $553,742, similar to Gallatin's, giving it a relatively low barrier to entry. With an ADR around $197 (the lowest of these five markets), Knoxville isn't about luxury pricing–it's about volume and consistency.
Hosts here typically earn around $39,639 in annual revenue, a solid figure driven by the city's consistent occupancy. You won't see the sky-high nightly rates of Nashville, but you also won't face sky-high purchase prices or volatile seasonality.
The city's inventory of around 500 rentals means there's some competition, but it's a far cry from the overcrowded listings of Nashville and Sevierville.
In Knoxville, a well-located and well-managed Airbnb can build a loyal base of repeat visitors who return during football season or visit every semester. Instead of luxury, this dependability is exactly what makes Knoxville the sleeper hit of Tennessee's Airbnb markets.
Is Tennessee good for Airbnb homes?
It can be, but success here is all about picking the market that fits your strategy. Thankfully, Tennessee is all about diversity. Looking for high nightly rates and non-stop urban excitement? Nashville delivers, albeit with a hefty price tag and tougher competition. Prefer the slow and steady route? Smaller markets like Gallatin or Knoxville offer affordability and reliable occupancy.
Overall, Tennessee combines strong tourism appeal and relatively low real estate costs (outside of Nashville). That mix has propelled several of these areas into top-tier Airbnb markets for 2025. However, we still recommend doing your homework: regulations can vary by city, and success in Tennessee requires creative hosting and competitive amenities, given the growing number of listings.
If you're ready to invest in Tennessee's potential, SummerOS should be your first step. This all-in-one tool gives you the analytics edge to maximize your returns by comparing revenue potential, booking patterns, and other Airbnb trends you need to know before you take the plunge.
Don't leave your Tennessee Airbnb investment to chance. Try SummerOS for free today.
