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The vacation rental market size is estimated to grow at a CAGR of 8.54% and the size of the market is forecast to increase by USD 84.41 billion between 2022 and 2027. The growth of the market depends on several factors, including the growing tourism industry and the increasing popularity of short-term rental properties, technological advances, and strategic partnerships. Risks associated with fraudulent vacation rental houses, apartments, and homestays is a major factor hindering the market growth.
This report extensively covers market segmentation by management (managed by owners and professionally managed), mode of booking (offline and online), and geography (Europe, North America, APAC, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges.
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Our researchers analyzed the data with 2022 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 growing tourism industry and the increasing popularity of short-term rental properties are notably driving the market growth. The growth of the global tourism industry significantly contributes to the growth of the market. The expansion of the tourism industry significantly contributes to a country's GDP. Multiple governments have implemented strategies that favor the growth of the global tourism industry. The global increase in the number of tourists leads to high demand for vacation rental properties. Baby boomers have been contributing significantly to the growth of the travel and tourism industry. Thus, the growth of the tourism industry and an increase in the number of domestic and international travelers have positively impacted the demand for vacation rental properties.
There exists a high global demand for apartments, farm stays, private homes, cabins, beach houses, villas, and cottages. The demand for short-term vacation rental properties is particularly increasing. These properties, when marketed effectively, bring increased returns than long-term rental properties. The global short-term rental market is growing rapidly. Short-term rental properties are considered a sought-after investment option, especially to diversify one investment. Increased comfort offered by short-term rental properties and affordability attracts consumers to such spaces.
The adoption of effective promotional strategies is the key trend in the vacation rentals market growth. Established players in the market are focused on effective advertising strategies and celebrity endorsements. Such measures aid in expanding the vendor-customer base. To attract customers, vendors offer discounts, seasonal offers, and contests. The advent of the Internet has increased the potential of major vendors in the market. Most of the vendors have a significant online presence, which is considered a key marketing platform for vendors. Most of the vendors invest in social media campaigns and promotional strategies. Social media campaigns aid in tracking customer feedback and reviews. This medium acts as a decisive tool for creating new offerings, understanding the latest trends and interests, analyzing consumer experiences, tracking brand ratings, and tracking service reviews. YouTube, Instagram, and Pinterest are some of the major social media tools adopted by the major players in the global market.
The popularity of social networking has contributed to increased investments in social media campaigns and promotional strategies. Hence, effective promotional strategies through social media platforms are expected to significantly channel customer perception in the vacation rentals market.
Risks associated with fraudulent vacation rental houses, apartments, and homestays are the major challenge impeding the market growth. The global market is negatively impacted by multiple risk factors that impact customer trust. Scams, fraudulent reviews, and unethical dealings affect the operations of key vendors in the market. Though such dealings are undertaken by counterfeit players, they impact the business operations of key market vendors as well. This leads to a decline in market revenue and hinders its growth.
Airbnb Inc and HomeAway provide user reviews and ratings. Such vendors 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 vendors in the vacation rentals market.
The increased probability of risks can lead to customers shifting to alternative forms of lodging, such as hotels. This restrains the growth of the market during the forecast period.
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Europe is projected to contribute 37% by 2027. 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. The growth of the travel and tourism industry contributes to the growth of the market in the region. Also, 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.
In 2020, the outbreak of COVID-19 affected the growth of the regional market. However, in 2021, business and tourism activities resumed with the relaxation of stringent lockdown restrictions due to the availability of COVID-19 vaccines and the vaccination drives carried out by the governments of various countries such as Germany, Italy, France, Spain, etc. This led to an increase in the demand for various vacation rentals properties such as hotels, resorts, and condos. A major factor in the market growth has been the rise in the number of tourists who want to stay in vacation rentals instead of hotel rooms after the pandemic. Thus, all these factors will lead to growth in the regional market during the forecast period.
The market share growth of the managed by-owners segment will be significant during the forecast period. This segment comprises vacation rental 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 valued at USD 102.03 billion in 2017 and continued to grow until 2021. 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.
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the vacation rentals market.
Wyndham Hotels and Resorts Inc. - The company offers Wyndham vacation clubs such as Margaritaville Vacation Club by Wyndham - St. Thomas resort, The Moab Resort, WorldMark Associate, Club Wyndham Grand Desert, etc.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The vacation rental market report forecasts by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Vacation Rental Market Scope |
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Report Coverage |
Details |
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Page number |
157 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 8.54% |
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Market growth 2023-2027 |
USD 84.41 billion |
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Market structure |
Fragmented |
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YoY growth (%) |
5.72 |
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Regional analysis |
Europe, North America, APAC, Middle East and Africa, and South America |
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Performing market contribution |
Europe at 37% |
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Key countries |
US, China, UK, France, and Italy |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
9flats.com PTE Ltd., Accor SA, Agoda Co. Pte. Ltd., Airbnb Inc., Bennington Properties LLC, Bluefish Vacation Rentals, BoutiqueHomes, Clickstay Ltd., Elite Destination Homes, Elite LLC, Expedia Group Inc., Holidu GmbH, Hotelplan Management AG, MakeMyTrip Ltd., NOVASOL AS, Oravel Stays Ltd., Places4stay SL, TripAdvisor LLC, World Travel Holdings, and Wyndham Hotels and Resorts Inc. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period. |
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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 report to meet your requirements. Get in touch
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 Mode of Booking
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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