Enjoy complimentary customisation on priority with our Enterprise License!
The short term vacation rental market size is forecast to increase by USD 57.05 billion, at a CAGR of 8.32% between 2023 and 2028. The growth of the market depends on several factors such as the growing tourism industry and increasing popularity of short term rental properties, the rising popularity of rural and remote destinations and user-friendly mobile applications for accessing short term vacation rentals.
The market analysis and report provide market size, historical data spanning from 2018 to 2022, and future projections, all presented in terms of value in USD billion for each of the mentioned segments.
For More Highlights About this Report, Download Free Sample in a Minute
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, market trends and analysis, and challenges. A holistic market growth analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The growing tourism industry and increasing popularity of short-term properties are notably driving the market growth. Multiple governments have implemented strategies that favor the growth of the global tourism industry. The global increase in the number of tourists leads to a high demand. Thus, the market growth and trends of the tourism industry and the growing number of domestic and international travelers have positively impacted the demand for properties. There exists a high global demand for apartments, farm stays, private homes, cabins, beach houses, villas, and cottages. These properties, when marketed effectively, bring increased returns than long-term rental properties.
Moreover, short-term vacation rental properties are considered a sought-after investment option, especially for diversifying one investment. Increased comfort offered by vacation rental properties and affordability attract consumers to such spaces. Therefore, such factors will propel the growth of the global market during the market forecast period.
Technological advancements in properties is an emerging trend shaping the market growth. Property owners are increasingly investing in smart home devices to simplify and make the process more secure and streamlined. The vendors are also catering to technologically advanced customers by providing technological facilities such as home automation, Bluetooth smart locks, smart fire alarms, and burglar alarms. For instance, nearly 70% of managers have installed a Wi-Fi/electronic lock on their vacation rental properties. They are also more inclined to use business intelligence software and data mining tools to harness their data to improve their decision-making.
Additionally, price optimization by utilizing revenue management software tools is also gaining popularity in the global market. The increased use of channel management tools to match property content, prices, and availability improves the ability to increase incomes. Therefore, such factors will drive the growth of the global market during the forecast period.
Inconsistency in providing quality is a significant challenge hindering market growth. In addition, as the suppliers of short-term are also equally diverse, there is a possibility of a high level of inconsistency in quality and service. The discrepancy in pictures that are advertised concerning the actual ambiance of the vacation rental property, disregard for basic standards of living, and inefficient services are common complaints among vacation rental users. This not only puts vacation rental owners at risk of losing their reputation but can also result in negative customer confidence in short-term vacation rentals. Professionally managed companies such as Airbnb Inc. have a system set up to fix such cases because if the vacation experience of the guests is ruined, it can negatively affect the company revenues in the future.
As a result, the competitive advantage over hotels is largely reduced. Owners of short-term must work on streamlining their operations while abiding by a set of standard rules. There is a need for more regulation and professionalism to create a satisfactory customer experience. Therefore, such factors hinder the growth of the global market during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market research and growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
9flats.com PTE Ltd.- The company offers vacation rental solutions such as vacation apartments, guest houses, and private apartments.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The offline segment is estimated to witness significant growth during the forecast period. Offline booking is a traditional way of booking a short vacation. Guests can potentially save money by avoiding the additional fees associated with online booking platforms. Guests may find more flexibility in terms of booking arrangements, including special requests, check-in/check-out times, and personalized preferences.
Get a glance at the market contribution of various segments Download the PDF Sample
The offline segment was the largest and was valued at USD 73.86 billion in 2018. Offline booking had high demand previously when Internet penetration was not high, as word of mouth and repeat business were the most powerful factors for offline bookings. At present, some people are still hesitant to book their accommodation online. The main reason for this is people's lack of faith in online reservations. Another reason people choose to book short-term vacation rentals offline is to ensure that they get the best rate. People generally think that by booking hotels offline, they will be able to negotiate with the staff or get extra discounts. Satisfied guests may become repeat customers, contributing to guest loyalty and positive word-of-mouth referrals. Thus, these factors will boost the market growth and forecasting of the offline segment and enhance the growth of the global market during the forecast period.
For more insights on the market share of various regions Download PDF Sample now!
Europe is estimated to contribute 36% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. growing desire for travel and exploration, both domestically and internationally, contributes to the demand for short-term vacation rentals. Changing preferences among travelers, including the increased preference for more personalized and unique experiences over traditional hotel stays, drive popularity. Weekend getaways and city breaks align with the trend of experiential travel, contributing to the growth of the regional market. Short-term vacation rentals often offer more flexible accommodation options and can be cost-effective, particularly for families or those traveling in a group. A wide variety of property types, including apartments, cottages, villas, and unique accommodations, cater to the diverse preferences of travelers.
In addition, as disposable incomes rise in Europe, consumers are more likely to spend money on vacations and leisure activities. This increased spending power is fueling the demand. Moreover, the aging population in Europe is leading to an increase in the time spent on leisure activities, which is driving the travel demand. This is contributing to the growth of the regional rental market during the forecast period.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The market is evolving with the changing dynamics of leisure and work, especially with the rise of work-from-home trends. There's a growing demand for eco-friendly vacation rentals with sustainable amenities, contributing to a carbon-neutral and resilient economy. This market is witnessing growth in emerging markets and is a key focus area for the real estate industry, particularly with millennials and their expenditure concerns. The U.S. Bureau of Economic Analysis monitors Personal Consumption Expenditures (PCE), reflecting consumer behavior.
However, challenges like fake listings on the internet and social media platforms are being addressed by platforms like Golightly. Technological trends like property management software, virtual tours, and Augmented Reality (AR) are enhancing the rental experience. Accommodation types vary from resorts/condominiums to others, catering to family travel, mini vacations, and rental resorts. Booking modes are predominantly online/platform-based, with a diverse customer base including baby boomers, Gen X, travel agencies, and B2B buyers. The World Tourism Organization (UNWTO) tracks tourist arrivals and short-term rental bookings, reflecting the market's growth.
Short Term Vacation Rental Market Scope |
|
Report Coverage |
Details |
Page number |
150 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 8.32% |
Market Growth 2024-2028 |
USD 57.05 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
11.1 |
Regional analysis |
Europe, North America, APAC, Middle East and Africa, and South America |
Performing market contribution |
Europe at 36% |
Key countries |
US, China, UK, France, and Italy |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
9flats.com PTE Ltd., Agoda Co. Pte. Ltd., Airbnb Inc., atraveo GmbH, Booking Holdings Inc., Casiola WorldWide LLC, Evolve Vacation Rental Network Inc., Expedia Group Inc., Hobiz Holidays Pvt. Ltd., Holidu GmbH, Homely Stays Pte. Ltd., Homestay Technologies Ltd., HomeToGo GmbH, Housewise Services Pvt. Ltd., MakeMyTrip Ltd., Roamhome Pvt. Ltd., StayBeyond Ltd., TripAdvisor Inc., Vacasa Inc., and Vacation Rental Pros Property Management LLC |
Market dynamics |
Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Mode of Booking
7 Market Segmentation by Management
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Get lifetime access to our
Technavio Insights
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.