How to Start an Airbnb Business in Arkansas

Why Arkansas Is a Top Market for Short-Term Rentals

Arkansas flies under the radar for most STR investors, and that’s precisely what makes it profitable for the operators who pay attention. While everyone fights over properties in Florida, Texas, and Colorado, Arkansas delivers comparable returns on a fraction of the investment. The state’s tourism industry generated $8.9 billion in revenue in 2024, driven by a mix of outdoor recreation, corporate travel, and a destination that most people outside the region don’t realize exists: Bentonville.

Bentonville changed the Arkansas STR equation. Walmart’s global headquarters brings a constant flow of vendors, consultants, and executives who need furnished accommodations for days, weeks, or months at a time. Crystal Bridges Museum of American Art — funded by the Walton family — draws over 600,000 annual visitors to a town of 57,000 people. The mountain biking trail network around Bentonville is now considered world-class, attracting outdoor enthusiasts from across the country. These overlapping demand sources create occupancy rates that rival markets three times its size.

Hot Springs adds a completely different demand profile. The city sits inside a national park — Hot Springs National Park is the oldest area managed by the National Park Service — and draws over 1.5 million visitors annually for its historic bathhouses, lakes, and horse racing at Oaklawn. The Ozarks region surrounding Eureka Springs, Branson (just across the Missouri border), and the Buffalo National River provides a steady stream of outdoor recreation tourism.

Property costs are the clincher. Arkansas’s median home price is approximately $205,000, one of the lowest in the country. A three-bedroom house near Beaver Lake or in Eureka Springs can be purchased for $180,000 to $280,000 and generate $35,000 to $55,000 annually as an STR. Rental arbitrage operators in Fayetteville and Bentonville are leasing apartments for $1,000 to $1,400 per month and pulling $2,500 to $4,200 in monthly Airbnb revenue. Those margins are hard to find in more saturated markets.

Arkansas Short-Term Rental Laws and Regulations

Arkansas maintains a business-friendly regulatory environment for short-term rentals. The state doesn’t impose burdensome restrictions, but local municipalities have increasingly adopted their own rules as the STR industry has grown.

State-Level Requirements

Arkansas does not require a state-specific short-term rental permit. Operators need a standard Arkansas sales tax permit from the Department of Finance and Administration (DFA), as STR income is subject to state sales tax. You’ll also want to register for an EIN through the IRS and establish your business entity (LLC recommended) through the Arkansas Secretary of State’s office.

The state classifies short-term rentals under its accommodation tax framework. All rentals shorter than 30 days are subject to state and local taxes. Arkansas requires hosts to maintain liability insurance and comply with state fire safety codes, which mandate smoke detectors, fire extinguishers, and accessible exits in all rental properties.

Key City Regulations

Bentonville: The city adopted a short-term rental ordinance that requires registration with the city’s planning department. Hosts must provide proof of insurance, a safety inspection certificate, and emergency contact information. Bentonville doesn’t cap the number of STR permits, which keeps the market accessible to new operators. The city charges a 2% hotel, motel, and restaurant tax (HMR) on short-term rental income in addition to state and county taxes. Noise complaints are taken seriously — three verified complaints within a 12-month period can result in permit revocation.

Fayetteville: As home to the University of Arkansas, Fayetteville has a more nuanced STR regulatory approach. The city distinguishes between owner-occupied and non-owner-occupied rentals. Owner-occupied units (where the host lives on-site or in the same building) face fewer restrictions. Non-owner-occupied STRs require a conditional use permit in certain residential zones, which involves a planning commission review. Fayetteville collects a 2% HMR tax plus applicable county taxes.

Hot Springs: This tourism-driven city has generally welcomed short-term rentals as a complement to its hotel industry. A business license is required, and properties must pass a fire and safety inspection. Hot Springs levies a 3% city advertising and promotion tax on top of state and county taxes. The city has also implemented a complaint-based enforcement system — if neighbors file issues, the city investigates. Properties near Bathhouse Row and Lake Hamilton face the most scrutiny due to residential density concerns.

Eureka Springs: This small artsy mountain town in the Ozarks has embraced vacation rentals as part of its tourism identity. Eureka Springs requires a tourist accommodation license for all STRs, which involves a health department inspection and annual renewal. The process is manageable but involves more paperwork than most Arkansas cities. Local occupancy taxes apply, and the town actively markets its vacation rental options as an alternative to hotels.

Recent Regulatory Changes (2025-2026)

Arkansas passed Act 585 in 2025, which established a statewide framework affirming the right to operate short-term rentals in all residential zones. The act permits municipalities to regulate health, safety, and nuisance issues but prevents them from enacting outright bans or imposing unreasonable permit caps. This was a significant legislative win for STR operators and provides a level of regulatory certainty that many states lack.

Benton County (covering Bentonville and Rogers) streamlined its tax remittance process in late 2025, moving to a quarterly filing system that reduces administrative burden for hosts. Platforms like Airbnb now automatically collect state and county taxes in Arkansas, though city-level taxes often still require manual filing.

Tax Obligations for Arkansas Airbnb Hosts

Arkansas’s tax structure has multiple layers, but the rates are manageable and the deduction opportunities are generous.

The foundation is Arkansas’s 6.5% state sales tax, which applies to all short-term accommodation revenue. On top of that, there’s a 2% statewide tourism tax. County taxes add another 1% to 3%, and city taxes vary — Bentonville’s 2% HMR, Hot Springs’ 3% A&P tax, and so on. Your total combined tax rate typically falls between 11% and 14% depending on location.

Airbnb collects and remits state and county taxes automatically in Arkansas. City taxes are less consistent — verify with your municipality whether the platform handles local remittance or whether you need to file separately.

Arkansas state income tax applies to your net rental profits at rates ranging from 2% to 4.4% (reduced from 4.9% in the 2025 tax reform). The state allows all standard business deductions: mortgage interest or rent, insurance, utilities, cleaning fees, supplies, repairs, depreciation, and travel to and from the property. If you’re operating under rental arbitrage, your lease payments are fully deductible as a business expense.

Pro tip: Arkansas offers a small business tax credit for new businesses in certain economically disadvantaged areas. If your STR property is in a designated opportunity zone (parts of Hot Springs, Pine Bluff, and West Memphis qualify), you may be eligible for additional state tax credits that further improve your net returns.

Best Cities for Airbnb in Arkansas

Arkansas offers several distinct STR markets, each with different demand drivers, guest profiles, and revenue potential. Your choice of city should align with your investment capacity, operational preferences, and risk tolerance.

Bentonville / Rogers / Northwest Arkansas

Northwest Arkansas is the state’s strongest STR market, and it’s not close. Bentonville’s combination of Walmart corporate traffic, Crystal Bridges tourism, and mountain biking tourism creates three overlapping demand streams that keep occupancy high year-round.

ADRs in Bentonville range from $130 to $250 for standard properties, with luxury homes and large group accommodations hitting $350+. Annual occupancy runs 65% to 76% — among the highest in the entire South for a non-coastal market. Gross annual revenue for a well-managed two- to three-bedroom property ranges from $38,000 to $62,000.

Corporate travelers dominate weekday bookings. They want clean, modern spaces with fast WiFi, a workspace, and proximity to the Walmart Home Office or vendor campuses. Weekend demand shifts to leisure travelers visiting Crystal Bridges, the Scott Family Amazeum, or the trail network. Properties that serve both audiences — professional enough for executives, comfortable enough for families — achieve the highest combined occupancy.

Rogers, just south of Bentonville, offers slightly lower property costs with strong STR demand driven by the Walmart AMP amphitheater and Beaver Lake recreation. Consider Rogers if Bentonville pricing feels stretched.

Hot Springs

Hot Springs operates as a year-round tourism destination with notable seasonal peaks around spring break, Oaklawn Racing season (January through May), and fall foliage. The city’s historic bathhouses, three lakes (Hamilton, Catherine, and Ouachita), and national park status create diverse appeal.

ADRs range from $110 to $220 for standard properties, with lakefront homes and luxury cabins commanding $250 to $400+. Annual occupancy averages 55% to 66%. Gross annual revenue runs $28,000 to $52,000 for well-managed properties. Lakefront properties on Lake Hamilton are the premium tier — they book at higher rates and attract longer stays than downtown properties.

Hot Springs’ guest profile skews toward couples, retirees, and small groups rather than families with young children. Properties with hot tubs (appropriately branded for the city’s thermal springs identity), lake access, or mountain views outperform generic listings by a wide margin. The city also draws a significant bachelor and bachelorette party market, which favors larger homes with entertainment amenities.

Fayetteville

Fayetteville combines university-driven demand (University of Arkansas) with a growing tech and startup economy that brings corporate travelers. Razorback football and basketball games create significant surge pricing opportunities similar to Tuscaloosa, Alabama — though on a slightly smaller scale.

ADRs run $95 to $180 on regular weekends and $200 to $450 during Razorback home football games. Annual occupancy averages 55% to 65%, with notable spikes during events. Gross annual revenue: $25,000 to $44,000. Properties near the university, the Fayetteville Square, or the Razorback Greenway trail system perform best.

Fayetteville is one of Arkansas’s strongest markets for making money on Airbnb without owning property. Apartment lease rates average $900 to $1,300 for a two-bedroom, while monthly STR revenue runs $1,800 to $3,200. The math works particularly well for operators who also capture game-day revenue through aggressive event pricing.

Eureka Springs / Ozarks Region

Eureka Springs is a Victorian mountain town with an established vacation rental tradition that predates Airbnb by decades. The town draws tourists for its arts scene, the Thorncrown Chapel, and proximity to Beaver Lake and outdoor recreation. The broader Ozarks region — including areas near the Buffalo National River — attracts hikers, canoeists, and nature enthusiasts.

ADRs in Eureka Springs run $120 to $240, with unique properties (treehouses, historic cottages, cliffside cabins) earning significantly more. Occupancy averages 50% to 62%, with strong weekends year-round and peak seasons in spring and fall. Gross annual revenue: $24,000 to $48,000. The key to Eureka Springs is character — guests choose it over generic vacation spots because of its charm, so your property needs to deliver that same quality.

How Much Do Airbnbs Make in Arkansas?

Here’s how Arkansas’s key STR markets compare on the metrics that matter most to operators.

*Fayetteville ADR reflects game-day surge pricing at the upper end.

The outlier in Arkansas is the Bentonville corporate market. While other cities depend heavily on leisure tourism, Bentonville’s Walmart-driven business travel provides Monday-through-Thursday occupancy that most vacation markets can’t match. This weekday-weekend balance is what drives Bentonville’s superior annual occupancy numbers.

How to Start Your Arkansas Airbnb Business

Arkansas rewards operators who understand the state’s unique market dynamics. Here’s a practical path from decision to first booking.

Step 1: Identify Your Niche. Arkansas’s STR markets each serve different audiences. Bentonville caters to corporate travelers and outdoor enthusiasts. Hot Springs serves couples and group getaways. Fayetteville revolves around the university and its events. Eureka Springs attracts arts and nature lovers. Pick the market that aligns with the type of hosting you want to do and the guest experience you want to create.

Step 2: Analyze Comparable Properties. Search Airbnb and VRBO for properties similar to what you’d offer in your target area. Note their nightly rates across different seasons, check their calendar availability to estimate occupancy, and read their reviews to identify what guests love and what they complain about. These gaps in competitor offerings are your advantage. If every listing in Hot Springs mentions slow WiFi, installing gigabit internet becomes your differentiator.

Step 3: Secure Your Property. For purchases, target properties with features guests value: lake access, mountain views, hot tubs, proximity to attractions. For rental arbitrage, approach landlords with a professional proposal that includes above-market rent, property care guarantees, and proof of insurance. Arkansas landlords in Fayetteville and Bentonville are increasingly familiar with the arbitrage model, which makes conversations easier than in markets where the concept is unknown.

Step 4: Complete Legal Requirements. Register for an Arkansas sales tax permit through the DFA. Obtain your local business license and any city-specific permits. Set up your LLC through the Secretary of State’s office (filing fee is $45 online). Get an EIN from the IRS. Open a business bank account. These steps take less than a week if you handle them concurrently.

Step 5: Design for Your Guest Profile. Corporate travelers in Bentonville want fast WiFi, a dedicated workspace, blackout curtains, and a coffee maker. Lake visitors in Hot Springs want outdoor seating, a grill, and a boat dock. Hikers near the Buffalo River want gear storage and detailed trail guides. Every furnishing decision should answer the question: what would my ideal guest want in this space?

Step 6: Launch and Iterate. List on Airbnb and VRBO simultaneously. Set opening prices 10% to 15% below comparable listings to generate initial bookings and reviews. After 10+ five-star reviews, gradually increase rates. Implement dynamic pricing using PriceLabs or Beyond Pricing to capture event-driven demand (Razorback games, Oaklawn races, Crystal Bridges exhibitions). Automate guest communication with templates for check-in, mid-stay, and checkout. Build your review count aggressively in the first 90 days — it’s the single biggest driver of listing visibility on Airbnb.

Arkansas STR Insurance and Liability

Insurance in Arkansas is relatively affordable compared to coastal states, but the same fundamental rule applies everywhere: your standard homeowner’s or renter’s policy won’t cover short-term rental activity. Operating without dedicated coverage is a risk no serious operator should take.

Arkansas STR insurance premiums typically range from $1,000 to $2,500 annually for a standard property. Lakefront properties on Hamilton, Catherine, or Beaver Lake may cost more due to water-related liability exposure. Policies should cover property damage, liability (minimum $1 million), lost income from covered events, and guest injury claims.

Providers with strong Arkansas coverage include Proper Insurance, CBIZ, and SafelyStay. Some operators also use Safely (formerly InsuraGuest), which offers per-booking coverage that can complement a base annual policy. Compare at least three quotes before committing.

If you’re operating near lakes or rivers, add umbrella liability coverage. Water-adjacent properties carry higher inherent risk from drowning, boating accidents, and dock injuries. A $1 million umbrella policy runs $200 to $400 annually and extends your protection across all properties. For a thorough understanding of what Airbnb’s built-in insurance does and doesn’t cover, read our guide on Airbnb insurance coverage.

One Arkansas-specific consideration: tornado coverage. Arkansas sits in a secondary tornado zone, and spring storms can cause significant property damage. Verify that your STR policy includes wind and tornado damage — some policies exclude or limit this coverage. Ask specifically about wind damage deductibles, which can be higher than standard deductibles in tornado-prone areas.

Why 10XBNB Gives You the Edge in Arkansas

Arkansas’s STR market rewards operators who understand its dual nature — corporate-driven markets like Bentonville operate completely differently from leisure destinations like Hot Springs or Eureka Springs. A strategy that works for Walmart vendor housing won’t work for lakefront vacation rentals, and vice versa. You need market-specific tactics, not generic advice.

10XBNB provides the strategic framework and tactical playbooks that help operators succeed in markets exactly like Arkansas. From identifying undervalued markets (places like Rogers and Mountain Home where competition is still thin) to optimizing listings for specific guest profiles (corporate vs. leisure vs. event-driven), the system covers every phase of building a profitable STR business.

The 10XBNB community includes operators actively running properties across Arkansas who share real performance data — actual ADRs, occupancy trends, regulatory updates, and vendor recommendations. That network alone can save you months of trial and error. Arkansas’s affordability and growing tourism base make it one of the strongest entry points for new STR operators, and having the right system behind you accelerates the path to profitability. Compare Arkansas against other top markets in our best states for Airbnb guide, and learn how co-hosting can help you scale faster in this market.

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