BNB Hot / Commercial / STR zoning
The commercial STR edge
Commercial-zone short-term rentals in Hot Springs
Residential STR licenses are capped and full, but commercially zoned buildings can still be licensed. Which zones qualify, how the process works, and why it is the smartest path to a new Hot Springs STR.
The residential door is closed. The commercial one is open.
Here is the fact that reshapes short-term-rental investing in Hot Springs. The city capped residential STR licenses at 400, and that cap has been full since July 1, 2025, with no waitlist. If you want to buy a house and run it as an Airbnb, you can't get a new license. Full stop.
But the cap only applies to residential zones. Commercial and other non-residential zones were written out of it. A building in the right commercial zone can still receive a brand-new short-term-rental license today, while the house across the street cannot. That is not a loophole. It is how the ordinance is drawn, and it is the single best path to a new, legal Hot Springs STR in 2026 and beyond.
Which zones still qualify
The cap that closed new licensing applies to the residential districts, RR, RS, and RN-1 through RN-6. Everything below sits outside that cap and remains eligible for a new short-term-rental license.
| Zone | What it is |
|---|---|
| C-TR | Tourist commercial, the Central Avenue and Bathhouse Row corridor |
| CN | Neighborhood commercial |
| CMU | Commercial mixed-use |
| CG | General commercial, the arterial retail and service strips |
| CBD | Central business district, historic downtown |
| IL | Light industrial |
| IH | Heavy industrial |
| IMU | Industrial mixed-use |
Two more categories are exempt from the cap no matter the base zoning:
- Historic Property Registry properties. A building on the city's historic registry can be licensed even where it would otherwise fall under the residential cap.
- Condominiums recorded before January 18, 2022. A condo whose declaration was recorded before that date is grandfathered outside the cap.
Why this is the smartest new-STR play in Hot Springs
When supply is frozen, the assets that are still allowed to operate become scarce, and scarce assets hold their value. That logic runs straight through the commercial-zone strategy.
- You can actually get a license. The obvious one, and the one that matters most. A commercial-zone building is a path to a new, legal STR when the residential path is simply closed.
- Scarcity protects you. With new residential licenses off the table, every legal short-term rental in the city is worth more than it was two years ago, and the gap widens the longer the cap stays full.
- Two income modes in one building. A commercial or mixed-use building can run ground-floor retail or office and nightly rentals above, or long-term leases with STR layered in. More ways to earn, less reliance on any one of them.
- The demand is already here. Roughly 2.5 million national park visits a year, Oaklawn's racing season, and the Lake Hamilton summer all feed nightly-rental demand. A downtown or Central Avenue unit sits inside that flow.
- Fewer competitors understand it. Most buyers hear "the cap is full" and stop. The ones who know the zoning carve-out are shopping a market with far less competition for the eligible buildings.
How a commercial building becomes a legal STR
The mechanics, from the parcel to an operating, licensed rental.
- Confirm the zoningCheck that the parcel sits in one of the exempt zones (C-TR, CN, CMU, CG, CBD, IL, IH, IMU), or qualifies as a Historic Property Registry building or a pre-January-18-2022 condo. Verify it with Planning & Development at 501-321-6905 in writing if you can.
- Check the building and the useConfirm the structure can legally be occupied for lodging, parking, occupancy, life-safety and any build-out the use requires. A commercial shell may need work a finished house would not.
- Apply for the STR licenseSubmit the city's short-term-rental license application for the address. The license is annual and due January 1; the fee scales with size (the city page describes it in terms of $50 per bed).
- Register for lodging taxesSet up to collect and remit the lodging taxes. On stays of 29 nights or fewer the total runs about 14.5%. Platforms handle most of it, but you still file the city form.
- Meet the operating rulesKeep within the occupancy cap, provide the required off-street parking, and name a local manager who can reach the property within 60 minutes.
- Operate and renewRun the listing, file the monthly city lodging form, and renew the license each January. Remember the license is tied to the owner's application and does not transfer automatically in a sale.
The rules you operate under
A commercial-zone STR follows the same operating rules as any licensed rental in the city. Know them before you buy.
Lodging tax ≈ 14.5%
On stays of 29 nights or fewer inside the city: 6.5% Arkansas gross receipts, 2% state tourism, local county and city sales tax, and the 3% Hot Springs Advertising & Promotion tax. Airbnb collects these on its bookings; Vrbo remits the A&P tax. You still file the city lodging form monthly by the 20th. Full breakdown on our tax guide.
Occupancy cap
Two guests per bedroom, plus two. A three-bedroom unit tops out at eight. Size your purchase to the headcount you actually want to host.
Off-street parking
Required. On the downtown and Central Avenue corridors, where parking is scarce, this can be the deciding factor on whether a building works as a rental at all.
Local manager, 60 minutes
A responsible local contact must be able to reach the property within 60 minutes. If you are an out-of-town owner, line up management before you list.
Annual license, due Jan 1
The license renews every January 1 and the fee scales with size ($50 per bed per the city page). Budget it as a recurring cost.
It does not transfer
The license is tied to the owner's application. Buying a licensed building does not hand you the license, you re-apply in your own name. Confirm eligibility before you close so there is no gap.
Run the numbers, then confirm the address
The nightly-rate side of the math is the same as any Hot Springs rental, so start with our tools, then bring the specific parcel to the city and to a broker who can verify its zoning.
One real example of a property that gets around the cap a different way: 186 Echo Point, a lake-area home listed by The Bergeron Group at $287,000. It sits in unincorporated Garland County, outside the Hot Springs city limits, so the city license and its 400-cap do not apply to it at all, and it is already live on Airbnb. Commercial-zone eligibility inside the city and county land outside the city are two separate routes around the same closed residential cap.
Common questions
Residential STR licenses are closed, so how can a commercial building still get one?
The 400-license cap applies only to residential zones (RR, RS, RN-1 through RN-6). Non-residential zones (C-TR, CN, CMU, CG, CBD, IL, IH, IMU), Historic Property Registry properties, and condos recorded before January 18, 2022 were written outside the cap, so a building in one of those categories can still receive a new license. Confirm the specific address with the city at 501-321-6905.
Which zones can still be licensed?
C-TR, CN, CMU, CG, CBD, IL, IH and IMU, plus any Historic Property Registry property and any condo recorded before January 18, 2022. The residential R-zones cannot get a new license while the cap is full.
How much is the lodging tax?
About 14.5% on stays of 29 nights or fewer inside the city: 6.5% Arkansas gross receipts, 2% state tourism, local county and city sales tax, and the 3% Hot Springs A&P tax. Airbnb collects these on its bookings and Vrbo remits the A&P tax, but hosts still file the city lodging form monthly by the 20th.
Does the STR license transfer when I buy the building?
No. The license is annual and tied to the owner's application. Buying a licensed building does not transfer the license to you; you re-apply in your own name. Confirm your eligibility with the city before closing so you don't end up with a building you can't legally rent.
What are the operating rules?
Occupancy is capped at two guests per bedroom plus two, off-street parking is required, and a local manager must be able to reach the property within 60 minutes. The license renews each January 1 with a fee that scales with size.
How do I know a specific address qualifies?
Call Hot Springs Planning & Development at 501-321-6905. Zoning is parcel-specific and the city is the only authority that can confirm what an address is eligible for. Do it before you remove contingencies on a purchase.
Keep going
More of the Hot Springs real-estate picture, and our network of local sites.
Commercial overview
Submarkets, property classes, lease vs. buy and due diligence.
STR regulations
The full city rulebook for short-term rentals in Hot Springs.
STR investing
How to underwrite a short-term rental in this market.
Buying a home
The buyer's guide to houses and investment property.
Market dashboard
Live median prices by ZIP and a mortgage calculator.
realhotsprings.com
Search Hot Springs property across the whole market.
Found a commercial building you think can be an STR?
Send us the address. We will check the zoning, flag whether it can carry a short-term-rental license, and connect you with The Bergeron Group to run the deal.