Vacation Rental Market Size, Share & Trends Report

Vacation Rental Market Size, Share & Trends Analysis Report By Accommodation Type (Home, Apartments, Resort/Condominium), By Booking Mode (Online, Offline), By Region, And Segment Forecasts, 2020 - 2027

  • Published Date: May, 2020
  • Base Year for Estimate: 2019
  • Report ID: GVR-4-68038-532-8
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2018
  • Number of Pages: 80

Report Overview

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 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 accommodation. In addition, a lot of rental properties accept pets and offer fence in back yard with additional fee 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.

U.S. vacation rental market size

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 is adding units at a substantially faster rate than the U.S. hotel industry.

Influence of social media and internet is increasing awareness among consumers regarding services and offerings of vacation rental. Key players are increasing their reach among consumers via advertisement and marketing in online articles, blogs, and social media platform. 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 apartment, condos, and homes is acting as a restraint for market growth. Moreover, 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.

Accommodation Type Insights

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 high popularity of home among travelers owing to its space availability, safety, and access to amenities. Moreover, low cost of accommodation in rural and travel destinations is acting as a major factor for 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 asfunction 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.

Booking Mode Insights

In terms of revenue, 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 internet and smartphone among consumers is estimated to shift consumers’ inclination towards online booking mode.

Global vacation rental market share

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.

Regional Insights

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 U.K. are estimated to lead the market over the forecast period. U.K. is projected to be the fastest growing market in the region.

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 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.

Key Companies & Market Share Insights

Many leading players are increasing their focus towards the growing trend of 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.

Vacation Rental Market Report Scope

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.

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Segments Covered in the Report

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

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