Vacation Rental Market: Global Industry Analysis and Forecast (2024-2030)

Vacation Rental Market Overview

Vacation rentals are private accommodations that are rented out to travellers on a short-term basis. Usually, it is fully furnished apartments, condos, houses, cottages, or lodges, where guests can use the kitchen, amenities, and outdoor space. Vacation rentals are seen as alternatives to traditional hotel stays, giving travellers more privacy, space, and often the feeling of a local lifestyle.

 

The analysis of the Vacation Rental Market has discovered the present market trends that are impacting market development and opportunities. The report combines qualitative and quantitative research, with an emphasis on analyzing data, identifying trends, and extracting actionable insights from the Vacation Rental market. The report utilizes a hierarchical approach to analyze market segments and regions, investigating the tactics of leading companies in the Vacation Rental industry. The increasing popularity of vacation rentals has been attributed to the rise of the sharing economy and online platforms that connect travellers directly with property owners. The direct booking model not only provides a seamless booking experience but also allows for more competitive pricing compared to traditional accommodation options.

 

• 43% of the rental hosts manage their property by themselves whereas 25% of the properties are managed by professionals.
• According to the STELLAR Analysis, the United States of America, Vacation Rental Industry revenue generated around USD 17,600 million in revenue in 2023. It is followed by China and the United Kingdom for generating revenue of around USD 9,715 million and USD 4,378 million respectively.

 

 

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Vacation Rental Market Dynamics

The Rise of Long-term Vacation Rentals Market

 

The surge in the popularity of travel and tourism owing to the remote working system, increased the duration of vacations by 68% resulting in 21 to 30-day stays in 2023. The travel industry is booming and people are adopting more for vacation rental rather than hotels have boosted the market growth. The increase in short-term rental properties is a major driving factor in the vacation rental market. For Instance, The short-term rental industry has seen significant growth in recent years, driven by the popularity of well-known short-term rental platforms like Airbnb and VRBO (Vacation Rental by Owner) has accelerated the market.

 

With increased concerns over safety and cleanliness, people began to seek the more isolated, self-contained, private accommodation offered by short-term rentals, instead of hotel stays. Millennials have developed a unique taste for vacation homes in the quest for luxury. Young people enjoy their fairly low prices, and private and secure spaces in the backyard for hosting parties, and online trends have propelled the market growth. Additionally, surges in the demand for vacation rentals that allow pets have increased by 40% which drives the market growth.

 

 

Navigating the Complexities of Luxury Vacation Rentals

 

Luxury vacation rentals globally encounter several challenges with stringent regulations governing vacation rentals. Adhering to diverse legal frameworks, such as occupancy limits, tax laws, and zoning regulations, poses challenges for rental property owners. Local communities have been negatively affected by the lack of available housing in popular tourist destinations, the increased rental prices and the overall impact on the liveability of some areas. Some local authorities find it difficult to cope with the quick growth of short-term rentals which have been transforming residential areas and put an additional burden on public services such as waste collection. Established hotel chains pose stiff competition to vacation rentals, particularly in popular tourist destinations. In some of the regions, insufficient infrastructure such as roads, electricity and water supply has been limiting factors in the growth of the Vacation rental market.

 

The Thriving Vacation Rental Market Amidst Global Tourism Boom

 

Booming tourism globally has created numerous opportunities for the vacation rental market service provider thanks to the increasing demand for unique and personalized accommodation that has driven the market. The region's rich cultural heritage and diverse landscape offer a vast array of options for vacation rental. Additionally, growing internet penetration and smartphone usage have facilitated the growth of online booking as it offers convenience and accessibility to customers.

 

Vacation Rental Market Segment Analysis

Based on Booking Mode, the Online Segment held the largest share in the Vacation Rental Market in 2023 and is expected to grow with an increasing CAGR till 2030 owing to a shift in customer preference for online booking has boosted the market growth. Online booking offers convenience and gives freedom for travellers to book a house at any time.

 

Online booking is being pushed by quick and easy booking of vacation rental bookings, an increase in customer trust in online payment, and the option to compare numerous available alternatives. Market players are extensively offering vacation rental services through mobile websites and apps, as it is one of the most preferred mediums of travel bookings, particularly among young professionals. Social Media is revolutionized in such a way that it has been a motivating factor to uplift your business growth. Social Media is booming the e-commerce industry.

 

Based on Accommodation Type, the Home segment dominated the market and is expected to maintain its dominance through the forecast period. Travellers are increasingly favouring vacation rentals over hotels owing to their comfort, affordability, privacy and family and pet-friendly nature. Amenities provided by the homeowners are the major driving factors that have propelled the market growth. As home offers luxurious amenities like a private gym, private pool etc. which has accelerated the demand in the market. Rental homes offer more privacy and space than hotels rental homes usually offer better value for the money than hotels.

 

 

Vacation Rental Market Regional Analysis

Europe dominated the market in 2023 and is projected to maintain its dominance through the forecast period. Europe is known for having the largest tourism industry in the world owing to its rich history, and improved infrastructure has made it more accessible to a wider range of consumers. Travellers in Europe are increasingly looking for unique and authentic experiences, which has boosted the demand for vacation rentals over traditional hotels. Customers are seeking more space, privacy, and flexibility during their stays, leading to a rise in bookings for vacation rental properties. In popular tourist destinations like Spain and Italy, there has been a surge in the number of vacation rental properties as homeowners capitalize on the growing demand from tourists.

 

 Additionally, the rise of online booking platforms has made it easier for property owners to list their rentals and for travellers to find accommodation that suits their preferences. The strong performance of the tourism industry in Europe has had a positive impact on the vacation rental market, with more travellers choosing to stay in rental properties for a more personalized experience. Additionally, the increasing popularity of remote work has allowed people to travel for longer periods, leading to a higher demand for vacation rentals as temporary homes. Europe is projected to generate a revenue of USD 33.49bn in the Vacation Rentals market by 2024.

 

North America is the fastest-growing region in the vacation rental market and is expected to rise through 2030. United States dominate the market in the North American region thanks to the trend towards urban rentals in major cities like New York and Los Angeles has accelerated the demand for the vacation rental market in the country. The shift is fuelled by the desire for authentic urban experiences and the convenience of staying in central locations. Additionally, the rise of eco-friendly and sustainable vacation rentals is gaining traction, aligning with the growing consciousness around responsible tourism. In comparison to other countries, the United States is expected to generate the highest revenue of US$19,770m in 2024.

 

Asia Pacific, South America and Middle East and Africa have been witnessing rapid growth in the vacation rental market owing to rising demand for safety and convenience in accommodation has propelled the market growth in the regions.

 

• Other countries in the largest vacation rental industry by revenue are Japan and Germany with a revenue of $4,305 million and $4,085 million respectively.
• In Brazil, for example, there are 68% more short-term rentals than there are hotel rooms, in India there are 44% more short-term rental listings than hotels.

 

 

Vacation Rentals Market Competitive Landscape

• In May 2023, in honour of Global Accessibility Awareness Day, Airbnb, Inc. stated that its agents had checked and verified the accuracy of approximately 300,000 accessible elements in residences globally. These accessibility features included step-free entrances, fixed grab bars, or bath or shower chairs
• In August 2022, Oravel Stays Private Limited bought Bornholmske Feriehuse, an operator of vacation rentals to grow its presence in Europe. The acquisition aimed to increase Oyo's presence in Croatia, where it had over 7,000 houses on its Traum Ferienwohnungen platform and close to 1,800 vacation homes on its Belvilla platform

 

Vacation Rental Market Scope
Market Size in 2023	USD 85.57 Bn.
Market Size in 2030	USD 114.7 Bn.
CAGR (2024-2030)	4.27 %
Historic Data	2018-2022
Base Year	2023
Forecast Period	2024-2030
Segments	By Booking Mode Online Offline
	By Accommodation Type Homes Apartments Resorts Others
	By Price Range Economic Mid-Range Luxury
Regional Scope	North America- United States, Canada, and Mexico Europe – United Kingdom, France, Germany, Italy, Spain, Sweden, Russia, and Rest of Europe Asia Pacific – China, India, Japan, South Korea, Australia, ASEAN, Rest of APAC Middle East and Africa - South Africa, GCC, Egypt, Rest of the Middle East and Africa South America – Brazil, Argentina, Rest of South America

 

Vacation Rental Market Key Players

1. Housewise
2. AirBnB Rental Management Company
3. Vacasa
4. VTrips
5. 9flats.com Pte Ltd.
6. Booking Holdings Inc.
7. Expedia Group Inc.
8. MakeMyTrip Pvt. Ltd.
9. NOVASOL AS
10. TripAdvisor Inc.
11. Wyndham Destinations Inc.
12. Booking Holdings Inc.
13. Hotelplan Holding AG.
14. Oravel Stays Pvt. Ltd. (OYO Rooms)
15. TripAdvisor Inc.
16. HomeAway
17. Interhome
18. RedAwning
19. GuestHouser
20. Awaze
21. Evolve
22. Homerez
23. The Travel Chapter
24. Feriepartner
25. Sol og Strand
26. XXX Inc