The global vacation rental market size was valued at USD 87.09 billion in 2019 and is expected to expand at a compound annual growth rate (CAGR) of 3.4% from 2020 to 2027. Millennials are the major force in boosting the growth of the vacation rental industry. Rising expenditure on travel, vacations, and accommodation among this generation is fueling the market growth. As per the report published by Airbnb, millennials and younger generations will account for 75% of all consumers and travelers by 2025. Travelers in the market are more inclined towards vacation rental property over hotels owing to the comfort, low cost, additional privacy, and kids and pet friendly nature of the accommodation. In addition, a lot of rental properties accept pets and offer fence in the back yard with an additional fees or security deposit, which serves as an appealing feature for the consumers. Low cost as compared to hotel accommodation with similar amenities compels the consumers to opt for vacation rental property. As per the TurnKey Vacation Rentals survey, 65% of millennial travelers ranked cost as the most important factor in choosing a vacation rental.
As per the report of iPropertyManagement, 71% of travelers with children preferred access to cooking their own meals, which was a major reason boosting the preference for vacation rental. As per Vacation Rental Marketing, the average number of Airbnb units is said to be doubling year on year, whereas hotel supply increased by only 1.1% in 2018. Moreover, according to CRBE, Airbnb accommodations account for 9% of the total lodging units in the 10 largest U.S. markets and are adding units at a substantially faster rate than the U.S. hotel industry.
The influence of social media and the internet is increasing awareness among consumers regarding services and offerings of the vacation rental. Key players are increasing their reach among consumers via advertisement and marketing in online articles, blogs, and social media platforms. Key players are offering various services and exotic locations with exotic landscaping and amenities. Many players are focusing on gaining market share by offering services dedicatedly to female travelers. For instance, in January 2020, Golightly, Inc. launched accommodation managed by women and only available for female guests, although men can travel with the member. Company owned more than 350 properties across the globe.
Fake listing of apartments, condos, and homes is acting as a restraint for market growth. Moreover, the growing pandemic of coronavirus (COVID-19) since December 2019 started impacting the growth of the market for vacation rental. As per AirDNA, changes in weekly bookings between the beginning of January and March have witnessed a significant drop. For instance, in Beijing, the number of bookings dropped by 96%, Shanghai by 71%, Seoul by 46%, and Rome by 41%. The impact is hampering the growth of the markets, which are largely limited to where the virus actually is.
In terms of revenue, the home accommodation type dominated the market for vacation rental with a share of 47.2% in 2019. This is attributed to the high popularity of home among travelers owing to its space availability, safety, and access to amenities. Moreover, the low cost of accommodation in rural and travel destinations is acting as a major factor for the growth of the segment.
Resort/Condominium is estimated to be the fastest growing segment over the forecast period. The growth is majorly attributed to increased inclination of the millennials towards spending on experiencing luxury. According to iPropertyManagement, 12% of millennials plan to stay in a villa/estate in the next year vs. only 6% of Boomers and 9% of Gen Xers. Availability of various facilities such as function rooms, barbeque pits, games, KTV and multi-purpose rooms, clubhouses, tennis, squash and basketball courts, and swimming pools fuels the growth of this category. The others segment including farm stays, cabins, chalets, and glamping accommodations is projected to expand at a CAGR of 2.6% over the forecast period.
In terms of revenue, the offline booking mode dominated the market for vacation rental with a share of 71.2% in 2019. This is attributed to the high preference for offline mode of booking among baby boomers and Gen X, which form the major consumer base. Increasing penetration of the internet and smartphone among consumers is estimated to shift consumers’ inclination towards online booking mode.
Online booking mode is estimated to expand at the fastest CAGR of 4.3% over the forecast period. The growth is attributed to consumers’ preference to have detailed access to the offerings of accommodation, amenities, and other benefits. Value for money, convenience, and search for authentic travel experiences are major factors fueling the growth of online booking. Increasing number of startups and third party travel booking companies are offering services via application and website only. Hence, consumers’ are shifting their preferences from offline booking mode to online. These aforementioned factors are boosting the growth of online booking mode.
Europe dominated the market for vacation rental with a share of 35.9% in 2019. This is attributed to the leading tour operators and online tour operators catching up with the growing trend of glamping and rising expenditure on booking accommodation in resort and condominium. Germany and the U.K. are estimated to lead the market over the forecast period. The U.K. is projected to be the fastest growing market in the region.
The Asia Pacific is estimated to be the fastest growing regional market for vacation rental and is further anticipated to take over the share of Europe by 2027. The growth is majorly attributed to the rising expenditure of the consumers on traveling and accommodation. China is a major contributor to the regional market growth and the country accounted for over 40.0% share in 2019. Rising expenditure of travelers from other developing countries, such as India, Philippines, Vietnam, and Australia, is further estimated to support the market growth in the region.
Many leading players are increasing their focus towards the growing trend of the vacation rental. Players in the market are diversifying the service offering in order to maintain market share. For instance, in April 2019, Marriott International announced the launch of Homes & Villas by Marriott International, a home rental initiative offering 2,000 premium and luxury homes located in over 100 destinations throughout United States, Europe, Caribbean, and Latin America. This is estimated to create tough competition in the market for vacation rental. Some of the prominent players in the vacation rental market include:
9flats.com Pte Ltd.
Airbnb Inc.
Booking Holdings Inc.
Expedia Group Inc.
Hotelplan Holding AG
MakeMyTrip Pvt. Ltd.
NOVASOL AS
Oravel Stays Pvt. Ltd.
TripAdvisor Inc.
Wyndham Destinations Inc.
Report Attribute |
Details |
Market size value in 2020 |
USD 87.61 billion |
Revenue forecast in 2027 |
USD 113.9 billion |
Growth Rate |
CAGR of 3.4% from 2020 to 2027 |
Base year for estimation |
2019 |
Historical data |
2016 - 2018 |
Forecast period |
2020 - 2027 |
Quantitative units |
Revenue in USD million and CAGR from 2020 to 2027 |
Report coverage |
Revenue forecast, company ranking, competitive landscape, growth factors, and trends |
Segments covered |
Accommodation type, booking mode, region |
Regional scope |
North America; Europe; Asia Pacific; Central & South America; MEA |
Country scope |
U.S.; Germany; U.K.; China; Japan; Brazil; Saudi Arabia |
Key companies profiled |
9flats.com Pte Ltd.; Airbnb Inc.; Booking Holdings Inc.; Expedia Group Inc.; Hotelplan Holding AG; MakeMyTrip Pvt. Ltd.; NOVASOL AS; Oravel Stays Pvt. Ltd.; TripAdvisor Inc.; Wyndham Destinations Inc. |
Customization scope |
Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope. |
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
This report forecasts revenue growth at the global, regional, and country levels and provides an analysis on the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global vacation rental market report on the basis of accommodation type, booking mode, and region:
Accommodation Type Outlook (Revenue, USD Million, 2016 - 2027)
Home
Apartments
Resort/Condominium
Others
Booking Mode Outlook (Revenue, USD Million, 2016 - 2027)
Online
Offline
Regional Outlook (Revenue, USD Million, 2016 -2027)
North America
U.S.
Europe
Germany
U.K.
Asia Pacific
China
Japan
Central & South America
Brazil
Middle East & Africa (MEA)
Saudi Arabia
b. The global vacation rental market size was estimated at USD 87.09 billion in 2019 and is expected to reach USD 87.61 billion in 2020.
b. The global vacation rental market is expected to grow at a compound annual growth rate of 3.4% from 2019 to 2027 to reach USD 113.9 billion by 2027.
b. Europe dominated the vacation rental market with a share of 35.9% in 2019. This is attributable to the presence of big tour operators and online tour operators already catching up with the growing trend of glamping and rising expenditure for booking accommodation in resort and condominium.
b. Some key players operating in the vacation rental market include 9flats.com Pte Ltd., Airbnb Inc., Booking Holdings Inc., Expedia Group Inc., Hotelplan Holding AG, MakeMyTrip Pvt. Ltd., NOVASOL AS, Oravel Stays Pvt. Ltd., TripAdvisor Inc. and Wyndham Destinations Inc.
b. Key factors that are driving the market growth include comfort, low cost, more privacy, kids, and pet-friendly nature of the accommodation coupled with rising expenditure on travel, vacations, and accommodation among millennials.
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