Background: Airbnb and similar short-term rental platforms have intensified competition in urban accommodation markets. Istanbul provides a strong case due to rapid Airbnb growth and the introduction of Turkey’s 2024 short-term rental regulations. Materials and Methods: A quantitative, deductive design was applied using a balanced panel of 60 observations from 30 Istanbul hotels across 2023 (pre-regulation) and 2024 (post-regulation). Hotel performance was measured using occupancy, ADR, RevPAR and profit margin; Airbnb competition was captured through nearby listing density and average Airbnb price. Analyses included descriptive statistics, normality tests, Pearson correlations, paired-sample t-tests and multiple linear regression with controls for hotel type, online rating, digital presence and regulatory period. Results: Hotels maintained solid performance overall (mean occupancy 73.86%, mean RevPAR ₺1,774.51, mean profit margin 18.69%), while Airbnb remained cheaper on average than hotel ADR (₺1,494.04 vs ₺2,124.39). Profit margin was negatively associated with average Airbnb price (r = -0.300, p = 0.020) and the post-regulation period (r = -0.297, p = 0.021), while occupancy declined post-regulation (r = -0.385, p = 0.002). The RevPAR-profit margin gap remained significant in both years (p <0.001). Regression results showed limited explanatory power for RevPAR (R² = 0.066) and the overall model was not significant (p = 0.709). Conclusion: Airbnb’s competitive effects in Istanbul appear more visible in profitability and occupancy patterns than in RevPAR. The 2024 regulations coincided with modest shifts, but impacts were uneven, suggesting hotel revenues are shaped by broader market and operational factors beyond Airbnb activity alone.