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The vacation rental market size is forecast to increase by USD 56.98 billion, at a CAGR of 5.12% between 2023 and 2028. The growth of the Global Vacation Rental Market is influenced by several key factors. The expansion of the tourism industry plays a significant role, as more people are traveling and seeking unique accommodations. Additionally, there is a rising demand for short-term vacation rental properties, driven by travelers looking for personalized and cost-effective lodging options. The widespread adoption of digitalization and online platforms has further propelled the market forward. These technologies make it easier for property owners to list their rentals and for travelers to find and book accommodations, enhancing the overall convenience and accessibility of vacation rentals. Increased disposable incomes have also led to higher consumer spending on travel and leisure, contributing to the market's growth.
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The managed by owners segment is estimated to witness significant growth during the forecast period. This segment comprises properties managed by owners. Most of the players in this segment are small private hotels and resort landlords who manage their own property. Increased personal interaction and improved customer inclination are expected to drive the growth of this segment. There is also a significant demand for premium properties, which provide transparency and better connectivity.
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The managed by owners segment was the largest segment and was valued at USD 113.65 billion in 2018. Property owners looking for reduced monthly expenses are more likely to self-manage their properties instead of spending on property management. Usually, property management companies demand a 7%-10% commission on the monthly rent to manage properties. However, owners with limited time to manage their property are more likely to adopt the property management service to avoid these complications. This may affect the growth of the segments during the forecast period.
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Europe is estimated to contribute 35% 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. Europe contributes significantly to the market. A growing desire for travel and exploration, both domestically and internationally, contributes to the demand. The growth of the travel and tourism industry contributes to the growth of the market in the region.
Furthermore, increased customer awareness towards rental vacation services contributes to the growth of the market in Europe. The presence of several established players, such as Hotelplan Holding AG, and NOVASOL AS, and increased funding from high-profile investors drive the growth of the market in the region. Moreover, the aging population in Europe is leading to an increase in the time spent on leisure activities, which is driving the demand for vacations and travel. This contributes to the growth of the regional market during the forecast period.
The market is influenced by various factors, including third-party studies, industry associations, and demographic data, which provide insights into consumer preferences and trends. Tourism spending and internet penetration play crucial roles in shaping the market, with device penetration facilitating online booking modes. Forecasting techniques such as time series forecasts and statistical models like Holt-Winters forecast aid in predicting market trends and demand fluctuations. Price indices, along with data from statistical offices and trade associations, help in assessing market dynamics and pricing strategies. The market encompasses various segments, including the homes segment, resorts segment, and eco-friendly vacation rentals, catering to different consumer preferences. Acquisitions and mergers drive market consolidation, while the offline segment and online segment offer diverse booking options for travellers. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The accommodation industry, including platforms like Airbnb, amenities, and boutiquehomes, is experiencing significant growth due to the expanding tourism sector and the rising popularity of short-term rental properties. The global tourism industry plays a pivotal role in driving market expansion, contributing substantially to countries' GDP. Governments worldwide are implementing strategies to foster tourism growth, leading to a surge in the number of tourists seeking short-term rental accommodations. Notably, the travel preferences of millennials favor budget-friendly options that offer quality time, boosting the demand for short-term vacation rentals.
Additionally, there's a growing global demand for various rental properties like apartments, farm stays, private homes, and beach houses, resort/condominium, as they offer higher returns compared to long-term rentals. As a sought-after investment choice, short-term vacation rentals are witnessing rapid growth, fueled by the desire to diversify investments. Thus, the convergence of these factors is driving the expansion of the market during the forecast period.
The rising availability of instant booking features is the primary trend shaping market growth. Aligning with market trends and analysis, the availability of instant booking options has increased the degree of product or service differentiation in the global market. In addition, to retain its customer base, Airbnb introduced instant booking provisions. Instant bookings facilitate minimal discrimination of guests based on gender, identity, race, disability, national origin, or age.
Moreover, many existing market players have invested in autoresponder technology, which saves time and money. This technology enables automated responses to inquiry emails and repetitive inquiries, which is expected to create a unique user experience. Thus, the presence of instant bookings will drive the growth of the global market during the forecast period.
Risks associated with fraudulent houses, apartments, and homestays is a challenge that affects market growth. Scams, fraudulent reviews, and unethical dealings affect the operations of key players in the market. Though such dealings are undertaken by counterfeit players, they impact the business operations of key market vendors as well. Furthermore, Airbnb and HomeAway provide user reviews and ratings. Such players also facilitate secure transactions and ensure that their customers are served effectively.
However, fraudulent advertisements, adoption of the bait-and-switch technique, and double booking have led to a decline in the overall market revenue. Moreover, phishing also impacts the growth prospects of the major market players. Moreover, the increased probability of risks can lead to customers shifting to alternative forms of lodging, such as hotels. This impedes the growth of the 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 market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market 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.
Accor SA: The company offers villa vacation rentals through different properties such as LA VERANDA OCEAN VILLA 1 Double Bed, Overwater Pool Villa Ocean, 3 Bedrooms Pool Villa, Standard 2 Bedroom Villa 2 King Beds, etc.
The market research and growth 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.
This vacation rental market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in USD Billion for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
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The market is characterized by various factors that influence consumer choices and industry dynamics. B2C enterprises play a vital role in providing rental accommodations through diverse sales channels, catering to the needs of travelers worldwide. Market analysis involves assessing the stationarity of data and making short-term estimates using statistical techniques like simple linear regression and Statista market models. Consumers seek value for money, privacy, and flexibility when choosing rental homes, hostels, or camping sites for their stay. Factors such as the availability of properties, rent prices, and safety issues impact decision-making, along with considerations like travel industry trends, regulations, and customer service standards. Additionally, attractions like ancient ruins and vibrant nightlife contribute to the popularity of vacation rentals among international tourist arrivals.
In addition, booking mode vary from traditional methods to online platforms, facilitating easy access for travelers. Acquisitions mergers in the industry reshape competition and market dynamics, impacting consumer choices. Travelers seek value for the money and prioritize factors like space and amenities when selecting rental properties. The cost of renting a property influences decision-making, along with considerations regarding restrictions on rentals regulation imposed by local authorities. Vacation rental platforms adapt to regulatory requirements while offering diverse options to consumers. Balancing affordability, space, and compliance ensures a seamless experience for travelers in the market.
Market Scope |
|
Report Coverage |
Details |
Page number |
161 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 5.12% |
Market Growth 2024-2028 |
USD 56.98 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
7.58 |
Regional analysis |
Europe, North America, APAC, Middle East and Africa, and South America |
Performing market contribution |
Europe at 35% |
Key countries |
US, China, UK, France, and Italy |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks, Vacation Rental Market Industry Report |
Key companies profiled |
9flats.com PTE Ltd., Accor SA, Agoda Co. Pte. Ltd., Airbnb Inc., AltexSoft Inc., Bennington Properties LLC, BoutiqueHomes, Clickstay Ltd., Elite Destination Homes, Elite LLC, Holidu GmbH, Hotelplan Management AG, MakeMyTrip Ltd., NOVASOL AS, Oravel Stays Ltd., TripAdvisor Inc., VIVI HOLIDAY HOMES S.L., World Travel Holdings, Wyndham Hotels and Resorts Inc., and Expedia Group Inc. |
Market dynamics |
Market trends and analysis, Market growth and trends and 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, Vacation Rental Market growth analysis |
Customization purview |
If our vacation rental market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Management
7 Market Segmentation by Method
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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