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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 market is experiencing significant growth, driven by the expanding tourism industry and the increasing preference for short-term vacation rental. This trend is further fueled by the convenience of instant booking features, which allow travelers to secure their accommodations with ease. However, the market also faces challenges, including the risks associated with fraudulent vacation rental listings. These risks can lead to financial losses and safety concerns for travelers, making it crucial for market participants to prioritize security measures and transparency. Overall, the market is poised for continued growth, with opportunities for innovations in cultural tourism and improvement in areas such as customer experience, safety, and technology integration.
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Vacation rentals have seen significant growth in bookings over the past few years, according to various third-party studies. Industry associations report that tourism spending on vacation rentals continues to increase, with consumer spending on this segment accounting for a substantial portion. The market is influenced by several factors, including demographic data, internet penetration, and device penetration. Forecasting techniques such as time series forecasts and stationarity of data are used to estimate short-term trends in vacation rental bookings. Techniques like simple linear regression and Holt-Winters forecast help in making accurate predictions. Price indices from statistical offices and trade associations provide insights into the pricing trends in the market.
The global vacation rental market is experiencing a period of rapid evolution, driven by a combination of factors, including changing consumer preferences, technological advancements, and economic growth. Key trends shaping the industry include a shift towards short-term rentals, the increasing popularity of online booking platforms, and a growing focus on personalized experiences. As consumers seek more flexible and affordable accommodation options, vacation rentals have become increasingly popular, especially among travelers seeking unique and authentic experiences. Additionally, the rise of online booking platforms, such as Airbnb and Vrbo, has made it easier than ever for travelers to find and book vacation rentals around the world. The vacation rental industry is also adapting to evolving consumer preferences, with a focus on providing amenities and services that cater to specific needs and interests. Overall, the global vacation rental market presents both challenges and opportunities for businesses, as they navigate the evolving landscape and strive to meet the changing needs of travelers.
Furthermore, the market is segmented into accommodation in homes and resorts. The booking mode can be offline or online. Market players are making strategic investments and acquisitions mergers to expand their presence in the market.
The vacation rental market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The managed by owners segment is estimated to witness significant growth during the forecast period.Vacation rentals have emerged as a significant segment in the tourism industry, with B2C enterprises facilitating bookings through various sales channels. According to industry associations and third-party studies, vacation rentals account for a substantial portion of consumer spending on accommodation and features such as spas, with tourism spending projected to increase due to rising internet and device penetration. Forecasting techniques, such as time series forecasts and stationarity of data analysis, are used to estimate short-term trends in the market. These estimates consider factors like rental homes in the accommodation segment, resorts segment, and booking modes, including offline and online. Market players invest in acquisitions and mergers to expand their offerings, with trends favoring short-term rentals and eco-friendly vacation rentals.
Furthermore, statistical offices and trade associations provide price indices to help owners set rental rates based on local market conditions, ensuring flexibility and competitiveness. Consumer preferences for privacy, space, and flexibility continue to drive demand for vacation rentals in the travel industry.
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The managed by owners segment accounted for USD 113.65 billion in 2018 and showed a gradual increase during the forecast period.
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 vacation rental market during the forecast period.
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The European market is experiencing significant growth due to the rising travel trend and the preference for unique experiences over traditional accommodations. Travelers seek more personalized and cost-effective options, leading to the increasing popularity of vacation rentals such as hostels and camping sites. Ancient ruins and historical sites add to Europe's allure, making vacation rentals an attractive choice for tourists. However, the availability of properties and restrictions on rentals vary across regions, requiring thorough research and regulation. Customer service and safety issues are crucial factors for vacation rental providers, ensuring a positive experience for travelers. The nightlife and cultural offerings in European cities further enhance the appeal of short-term rentals, contributing to the growth of the market in Europe.
The global vacation rental market is undergoing a period of significant transformation, driven by a confluence of factors, including changing consumer preferences, technological advancements, and economic growth. Key trends shaping the industry include a shift towards short-term rentals, the increasing popularity of online booking platforms, and a growing focus on personalized experiences. As consumers seek more flexible and affordable accommodation options, vacation rentals have become increasingly popular, especially among travelers seeking unique and authentic experiences. Additionally, the rise of online booking platforms, such as Airbnb and Vrbo, has made it easier than ever for travelers to find and book vacation rentals around the world. The vacation rental industry is also adapting to evolving consumer preferences, with a focus on providing amenities and services that cater to specific needs and interests. Overall, the global vacation rental market presents both challenges and opportunities for businesses, as they navigate the evolving landscape and strive to meet the changing needs of travelers.
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.
Growing tourism industry and increasing popularity of short-term vacation rental properties is the key driver of vacation rental market growth. The market has witnessed significant growth in recent years due to the increasing trend of B2C enterprises in the tourism industry. According to third-party studies and industry associations, consumer spending on vacation rentals, including tiny homes and resorts segments, has increased as a result of rising disposable incomes, increased internet and device penetration, and the desire for privacy, space, and flexibility. In the first quarter of 2023, international tourist arrivals reached 80% of pre-pandemic levels, with an estimated 235 million tourists traveling globally. This growth has led to increased investments, acquisitions, and mergers among market players in the short-term vacation rentals sector.
Moreover, the demand for eco-friendly vacation rentals is on the rise, reflecting consumers' growing concern for sustainability. Additionally, the online segment of vacation rentals continues to dominate, with booking modes shifting towards digital channels. However, the offline segment still holds significant market share, highlighting the importance of catering to diverse consumer preferences. Overall, the market is poised for continued growth in the coming years, driven by the travel industry's resilience and evolving consumer demands.
Rising availability of instant booking features is the upcoming trend in the vacation rental market. The market has witnessed significant growth due to the increasing trend of instant bookings through B2C enterprises. This real-time booking process offers minimal wait time and enhances customer satisfaction by providing flexibility and convenience. According to third-party studies and industry associations, consumer spending on vacation rentals, including accommodation in homes and resorts segments, has been on the rise. Factors such as tourism spending, internet penetration, and device penetration have contributed to this trend. Forecasting techniques, such as time series forecasts and stationarity of data, are used to estimate short-term trends in the market. Market players have responded with investments, acquisitions, and mergers in the short-term vacation rentals sector.
Additionally, eco-friendly vacation rentals have gained popularity, aligning with international tourist arrivals' increasing focus on sustainability. Price indices from statistical offices and trade associations indicate that rent prices for vacation rentals remain competitive compared to luxury hotels. The online segment, which facilitates instant bookings, has surpassed the offline segment in terms of bookings. Simple linear regression and Holt-Winters forecast are commonly used to analyze market trends. Overall, the market continues to grow, offering travelers privacy, space, and flexibility in their accommodations.
Risks associated with fraudulent vacation rental houses, apartments, and homestays is a key challenge affecting vacation rental market growth. The market is a significant segment of the tourism industry, with B2C enterprises relying on various sales channels to facilitate bookings for rental homes, resorts, and accommodations. Third-party studies and industry associations provide valuable demographic data and consumer spending trends, indicating that spending on adventure tourism and internet penetration are crucial drivers for vacation rental sales. Forecasting techniques, such as time series forecasts and stationarity of data, are used to estimate short-term revenue growth and price indices. However, the market faces challenges, including fraudulent activities that undermine customer trust. Counterfeit players engage in scams, false reviews, and unethical dealings, leading to declines in revenue for both the offending parties and legitimate market players.
Moreover, companies like Airbnb and HomeAway mitigate these risks by providing user reviews, secure transactions, and effective customer service. However, issues such as fraudulent advertisements, bait-and-switch tactics, and double bookings persist, impacting the overall market revenue. Despite these challenges, the market continues to grow, offering travelers privacy, space, flexibility, and value-added services, making it an essential component of the tourism and travel industry.
The vacation rental market forecasting 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 vacation rental market research and growth report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis 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 services through different hotels such as The Capitol Kempinski Hotel Singapore, Somerset Bencoolen Singapore, Carlton City Hotel Singapore, etc.
The vacation rental market forecast report includes detailed analyses of the competitive landscape of the market and information about key 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.
Vacation rentals have emerged as a significant segment in the travel industry, with B2C enterprises driving a substantial portion of bookings and sales. Third-party studies and industry associations provide valuable insights into the market, revealing demographic data, tourism spending, and consumer spending trends. Internet penetration and device penetration are crucial factors influencing vacation rental bookings, with the online segment dominating the market. Forecasting techniques such as time series forecasts, stationarity of data analysis, short-term estimates, and statistical models like simple linear regression and Holt-Winters forecast are used to estimate rent prices in the accommodation sector. The market is segmented into homes and resorts, with varying booking modes, including offline and online. Furthermore, market players invest in acquisitions, mergers, and innovations, including short-term rentals, eco-friendly vacation rentals, and price indices. Privacy, space, and flexibility are key considerations for consumers in the market. International tourist arrivals continue to drive demand for vacation rentals, making it an attractive investment opportunity.
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 |
Key companies profiled |
9flats.com PTE Ltd., Accor SA, Agoda Co. Pte. Ltd., Airbnb Inc., AltexSoft Inc., Bennington Properties LLC, Bluefish Vacation Rentals, 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 |
Parent market analysis, market growth inducers and obstacles, market forecast, 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 vacation rental market growth analysis 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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