Vacation Rental Market Size, Share & Trends Analysis Report By Booking Mode (Online, Offline), By Accommodation Type (Home, Resort/Condominium), By Region (Asia Pacific, North America), And Segment Forecasts, 2023 - 2030

Report Overview

The global vacation rental market size was estimated at USD 82.63 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 4.7% from 2023 to 2030. The rising expenditure on travel, vacations, and accommodation among millennials is driving market growth. According to Copyrise, 200,000 million global tourists are millennials, and they spend around USD 180 billion on travel every year. However, the COVID-19 pandemic has negatively impacted the growth of the market. For instance, according to AirDNA, there was a significant drop in weekly bookings between the beginning of January and March 2020. Moreover, the number of bookings in Beijing dropped by 96%, Shanghai by 71%, Seoul by 46%, and Rome by 41%.

Travelers are more inclined toward vacation rental properties than hotels as these properties are affordable, offer a greater level of comfort & privacy than hotels, and have kids as well as pet-friendly nature of the accommodation. Low cost as compared to hotel accommodation with similar amenities drives the consumer’s inclination toward such properties. For instance, according to the TurnKey Vacation Rentals 2019 survey, 64% of travelers prefer vacation rentals over hotels. Moreover, while traveling with family, consumers consider various factors when choosing a vacation rental for amenities and comfort.

For instance, according to the report of iProperty Management in 2021, 71% of families traveling with children prefer to prepare their meals, which was a likely factor in their decision to stay in a vacation rental. In addition, rising supply is increasing the demand and availability of vacation rentals owing to low costs compared to hotels. As per Stratos Jet Charters, Inc. statistics, there are 2.9 million hosts on Airbnb worldwide, and over 14,000 hosts were among the new additions each month in 2021. Moreover, Airbnb operates in around 220 countries, with approximately 100,000 actively listed with Airbnb listings in 2021. As the market evolves, service providers are adapting their offerings to cater to the changing needs of travelers.

For example, SabbaticalHomes, an international listing service initially focused on providing temporary housing for visiting scholars, has expanded its services to include short- and medium-term home rentals and exchanges in 57 countries, catering to both academic and non-academic individuals. Similarly, companies like Plum Guide, BoutiqueHomes, and Homestay are innovating within this space by introducing modifications to their service offerings, aiming to provide the utmost convenience and unique experiences to their customers. The influence of social media and the internet is increasing awareness among consumers regarding services and offerings.

Key players are offering various unique services, exotic locations, and amenities to gain higher market shares. For instance, in January 2020, Golightly was launched, which is a vacation rental platform managed by women and only available for female guests. The company owns more than 350 properties globally. Integrating vacation rental listings with various distribution channels, such as online travel agencies (OTAs) and metasearch engines, opens new avenues for reaching a broader audience. Through partnerships with platforms like Expedia Partner Solutions, HomeToGo, and TripAdvisor, operators can expand their reach and visibility, attracting a larger pool of potential guests. This increased exposure leads to higher booking rates, increased occupancy, and revenue growth.

Accommodation Type Insights

On the basis of accommodation type, the industry has been further categorized into home, apartments, resort/condominium, and others. The home accommodation type segment dominated the market with a share of 47.59% of the overall revenue in 2022. This is attributed to the high popularity of homes among travelers owing to space availability, safety, and access to amenities. Moreover, the low cost of accommodation in rural and travel destinations is acting as a major driver for the segment growth.

On the other hand, the resort/condominium segment is projected to register the fastest CAGR of 5.4% from 2023 to 2030. The segment growth is majorly driven by millennials as they are more inclined toward spending on experiencing various amenities including barbeque pits, games, swimming pools, clubhouses, and tennis. According to iProperty Management in 2021, 12% of millennials plan to stay in a villa/estate compared to only 6% of Boomers and 9% of Gen Xers.

Booking Mode Insights

In terms of revenue, the offline booking mode segment dominated the market with a revenue share of over 69.86% in 2022. This is attributed to the Baby Boomers and Gen X being the major consumer base preferring offline mode of booking. Increasing penetration of the internet and smartphone among consumers is estimated to shift consumers’ inclination toward online booking mode.

The online booking mode segment is estimated to expand at the fastest growth rate of 5.4% over the forecast period. The growth is credited 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. A growing number of startups and third-party travel booking companies are offering services via application and website only.

Regional Insights

In terms of region, Europe dominated the market with a share of 34.62% in 2022. This is attributed to the major and online tour operators catching up with the growing trend of glamping as well as the rising expenditure for booking accommodation in resorts and condominiums. Germany and the UK are estimated to lead the market over the forecast period. The UK is projected to be the fastest-growing market in the region. Asia Pacific is expected to register the fastest CAGR of 5.8% from 2023 to 2030. The growth is majorly attributed to the rising expenditure of consumers on travel and accommodation.

China's vacation rental industry held the largest revenue share in 2022 in the region and is estimated to maintain its lead in the years to come. Key service players in the country are taking up initiatives and widening the accommodation destinations by partnering with or educating the landlords in the country. For instance, in June 2019, Peng Tao, president of Airbnb China, stated that the company undertook efforts to introduce educational initiatives in educating landlords in second and third-tier cities in China. This initiative enhanced the quality of the company’s listings, consolidated online reviews, and boosted brand-building.

The market in Australia is expected to grow at a substantial CAGR of 6.6% during the forecast period. Australia's beautiful coastline and scenic regions make it an attractive destination for vacation rentals. Coastal areas, beachside towns, and regions with natural attractions like the Great Barrier Reef, Whitsundays, Blue Mountains, and the Yarra Valley are popular spots for vacation rental properties. According to Australian Financial Review, MadeComfy, an Airbnb management company in Australia, reported an average occupancy rate of 73% in Sydney and Melbourne, showing a strong comeback in the STR industry.

Key Companies & Market Share Insights

The market is characterized by the presence of a few established players and new entrants. Many big players are increasing their focus on the growing trend of vacation rentals. Players in the market are diversifying the service offering to maintain market share. For instance:

• In August 2022, Oravel Stays Private Limited bought Bornholmske Feriehuse, an operator of vacation rentals to expand its presence in Europe. The acquisition aimed to increase Oyo's presence in Croatia, where it had over 7,000 houses on its Traum Ferienwohnungen platform and close to 1,800 vacation homes on its Belvilla platform

• In May 2023, in honor of Global Accessibility Awareness Day, Airbnb, Inc. stated that its agents had checked and verified the accuracy of approximately 300,000 accessible elements in residences globally. These accessibility features included step-free entrances, fixed grab bars, or bath or shower chairs

Some of the key players in the global 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.

Vacation Rental Market Report Scope

Global Vacation Rental Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis on the latest trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the vacation rental market report on the basis of accommodation type, booking mode, and region:

• Accommodation Type Outlook (Revenue, USD Billion, 2017 - 2030)

  • Home

  • Apartments

  • Resort/Condominium

  • Others

• Booking Mode Outlook (Revenue, USD Billion, 2017 - 2030)

  • Online

  • Offline

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • Japan

    • Australia

  • Central & South America

    • Brazil

  • Middle East & Africa (MEA)

    • Saudi Arabia