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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 short-term vacation rental market is experiencing significant growth, driven by the expanding tourism industry and the increasing popularity of flexible, affordable accommodation options. Technological advancements are also transforming the sector, with innovations such as online booking platforms, smart home technology, and virtual tours enhancing the customer experience. However, inconsistency in providing quality vacation rental properties remains a challenge, as some operators fail to maintain high standards, leading to negative reviews and reputational damage. To stay competitive, short-term rental providers must prioritize customer satisfaction, invest in technology, and ensure consistent quality in their offerings.
The short-term rental market, specifically in the travel & tourism industry, has seen significant growth in recent years due to the increasing popularity of budget-friendly accommodations like Airbnb and Booking.Com. This trend is driven by both leisure and work travelers, including those who work from home, seeking flexible and affordable options. Eco-friendly and sustainable amenities are also becoming increasingly important to travelers, with a growing demand for environmental-friendly rentals. International travel, particularly to emerging markets, is also fueling the growth of this market, as low airfare prices make it more accessible to a wider audience. The real estate industry is also taking notice, with property owners turning to online booking platforms and property management software to streamline the rental process.
Technological trends, such as virtual tours and Augmented Reality (AR), are enhancing the guest experience, while innovative solutions like homes and apartments with aesthetic stays are attracting millennial travelers. However, concerns around fake listings and safety continue to be a challenge for the market. Female visitors, in particular, prioritize safety and security when choosing a rental. Overall, the short-term rental market is expected to continue its growth trajectory, offering travelers unique and affordable accommodations that cater to their evolving needs.
The 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 offline segment is estimated to witness significant growth during the forecast period. Offline booking is a traditional way of booking short term vacation rentals. 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. Direct communication in offline booking provides a clear understanding of the property, amenities, and any specific details related to the rental. Guests can obtain information directly from the owner, ensuring transparency in the booking process. Owners can communicate their expectations and guidelines to guests directly, ensuring clarity in the booking process. A positive offline experience may encourage guests to return to the same property in the future, building a long-term relationship.
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 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 growth of the offline segment and enhance the growth of the global short term vacation rental market during the forecast period.
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The offline segment accounted for USD 73.86 billion in 2018 and showed a gradual increase during the forecast period.
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.
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The European short-term vacation rental market is experiencing significant growth due to the increasing demand for authentic travel experiences and flexible accommodation options. Travelers, particularly baby boomers and Gen X, are seeking safer tourist spots that offer seamless service, spa & wellness facilities, and planned activities & adventures. Short-term rentals provide an opportunity for social interactions with locals and fellow travelers, enhancing the overall customer experience. Booking modes have shifted towards online/platform-based solutions, making it more convenient for B2B buyers and individual travelers to secure their preferred accommodations. Cost efficiency is another key factor driving the growth of the market, as families and groups can often save money by renting a vacation home instead of multiple hotel rooms. The trend towards experiential travel, including weekend getaways and city breaks, further boosts the demand for short-term rentals. Overall, the market's competitive edge lies in its ability to cater to the evolving preferences of travelers and offer more personalized and unique experiences than traditional hotel stays.
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 growing tourism industry and increasing popularity of short term rental properties is the key driver of the market. The travel and tourism sector's expansion has driven the growth of the short-term rental market, with an increasing preference for budget-friendly accommodations among both leisure and work travelers. Online platforms like Airbnb and Booking have disrupted the traditional real estate industry, offering property owners innovative solutions for renting out their homes, apartments, resorts/condominiums, and other types of accommodations to international and domestic visitors. The emerging markets and low airfare prices have attracted millennials and female visitors, seeking aesthetic stays and sustainable amenities, such as eco-friendly vacation rentals and environmental-friendly rentals.
Further, technological trends, including virtual tours, Augmented Reality (AR), online booking platforms, and property management software, have streamlined the guest experience and enhanced the overall value proposition for property owners. The short-term rental market caters to various accommodation types, including homes, apartments, and cabins, and is increasingly popular for family travel, mini vacations, and work-from-home arrangements. However, it is essential for travelers to be cautious of fake listings and upfront costs when booking short-term rentals.
Technological advancements in short term vacation rental properties is the upcoming trend in the market. The travel and tourism industry continues to thrive, with an increasing number of travelers seeking budget-friendly accommodations for both leisure and work-from-home trips. Short-term rentals, such as those offered by Airbnb and Booking, have gained popularity due to their flexibility and affordability. As international travel resumes and airfare prices remain low, emerging markets are witnessing significant growth in the short-term rental sector. Property owners are responding to this trend by offering eco-friendly and sustainable amenities, appealing to environmentally-conscious travelers. Technological trends are also shaping the short-term rental landscape, with innovative solutions like virtual tours, Augmented Reality (AR), and property management software enhancing the guest experience.
Additionally, millennials, who prioritize aesthetic stays over traditional hotels, are a significant demographic in the market. Female visitors, too, are a growing segment, with platforms like Golightly catering to their unique needs. The real estate industry is recognizing the potential of short-term rentals, with a shift towards offering homes, apartments, resorts/condominiums, and other accommodation types. Family travel is another area of growth, with HomeAway and condominium accommodation types gaining popularity. Mini vacations and upfront costs are also driving demand for short-term rentals, making them a cost-effective alternative to traditional accommodations. However, it is crucial for online booking platforms to address concerns around fake listings and ensure transparency to maintain trust with their customers.
Inconsistency in providing quality vacation rental properties is a key challenge affecting the market growth. The market in travel and tourism continues to gain popularity among budget-conscious travelers seeking affordable accommodations. Platforms like Airbnb and Booking.Com offer a wide range of options, from apartments and homes to resorts and condominiums, catering to both leisure and work-from-home travelers. However, inconsistency in the quality and service of vacation rentals can hinder the growth of this market. Female visitors, in particular, have reported issues with fake listings, inefficient services, and discrepancies between advertised pictures and the actual ambiance of the property. To address these concerns, eco-friendly and sustainable amenities are becoming increasingly important for vacation rental properties. Technological trends, such as virtual tours, Augmented Reality (AR), and property management software, are innovative solutions that enhance the guest experience and build trust with potential renters.
Further, property owners and online booking platforms must prioritize upfront costs to ensure consistent quality and reliable services, as international travelers seek value for their travel expenditure, spending not only on services but also on goods during their stays. Emerging markets, such as those in Asia and Latin America, with low airfare prices, are expected to contribute significantly to the growth of the market. Millennials, who prioritize aesthetic stays and unique experiences, are also driving demand for diverse accommodation types. HomeAway and condominium accommodation types are popular choices for family travel and mini vacations. Overall, the real estate industry must adapt to these trends and invest in technological solutions to provide a consistent and high-quality guest experience.
The 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 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 short term vacation rental solutions such as vacation apartments, guest houses and private apartments.
The market research and growth 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.
The short-term rental market in travel and tourism has witnessed significant growth in recent years, with budget-friendly accommodations like Airbnb and Booking becoming increasingly popular among leisure and work travelers. The trend of work-from-home and international travel has further fueled the demand for short-term rentals, particularly eco-friendly and sustainable amenities. Property owners benefit from the use of online booking platforms and property management software, enabling them to reach a wider audience and manage their properties efficiently. Millennials, who prioritize aesthetic stays and innovative solutions, are a key demographic in the short-term rental market. Technological trends, such as virtual tours and Augmented Reality (AR), enhance the guest experience and provide transparency in the booking process.
Further, emerging markets and low airfare prices have also contributed to the growth of this sector in the real estate industry. However, challenges such as fake listings and upfront costs remain concerns for both property owners and travelers. The market for short-term rentals includes various accommodation types, such as homes, apartments, resorts/condominiums, and others. Family travel and mini vacations are also popular segments in this market. Companies like Golightly and HomeAway cater to specific accommodation types and offer unique features to attract customers. Overall, the short-term rental market continues to evolve, with a focus on enhancing the guest experience and addressing the needs of modern travelers.
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Market Scope |
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Report Coverage |
Details |
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Page number |
150 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 8.32% |
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Market Growth 2024-2028 |
USD 57.05 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
11.1 |
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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 36% |
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Key countries |
US, China, UK, France, and Italy |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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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 |
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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 |
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Customization purview |
If our 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 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
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