You do not report it on Schedule E if the average rental days is less than 7 days. It is considered a business activity and reported on Schedule C. The Office of Chief Counsel IRS has issued a memo stating "The average period of customer use of the vacation property is seven days, and therefore the activity is not considered a rental activity for purposes of § 469 pursuant to Treas. Reg. § 1.469-1T(e)(3)(ii)(A)" Memorandum 202151005
Basically, since the less than 7 day average removes the activity from being a passive activity and it is not considered a rental activity, it IS considered business activity. If you are an individual and not a corporation, all of your "rental" activity for the property that has the less than 7 day average will be reported on Schedule C whether or not you provide substantial services.
@Ocalagator
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