Vacation Rental Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 79.39 Billion |
| Market Size (2029) | USD 106.89 Billion |
| CAGR (2024 - 2029) | 6.13 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | Asia Pacific |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Vacation Rental Market Analysis
The Vacation Rental Market size is estimated at USD 79.39 billion in 2024, and is expected to reach USD 106.89 billion by 2029, at a CAGR of 6.13% during the forecast period (2024-2029).
- The vacation rental market grows due to changing consumer preferences, technological advancements, and evolving economic and social trends. As tourism expands, travelers are increasingly venturing beyond the usual major cities and popular tourist hotspots. There's a rising trend in vacation rentals located in rural, mountainous, and coastal areas. Tourists are gravitating towards these secluded and tranquil retreats, often in search of outdoor adventures. Notably, properties such as vacation homes in national parks, beachfront villas, and countryside retreats have experienced a significant uptick in demand.
- The UN World Tourism Organization (UNWTO) indicated a steady increase in international tourist arrivals in recent years, with a significant recovery in 2023 and 2024 following the pandemic. As the number of tourists grows, the demand for accommodations rises, with vacation rentals becoming a popular alternative to traditional hotels.
- Vacation rentals frequently deliver a more authentic, local experience than traditional hotels. With travelers increasingly seeking genuine stays in residential neighborhoods or lesser-known locales, vacation rentals present distinct avenues for deeper engagement with local culture and lifestyle.
- Local governments have relaxed regulations and taxes on short-term rentals in various cities and regions, recognizing their importance to the local economy, particularly in tourism-dependent areas. This change has created opportunities for individual homeowners and larger property managers to capitalize on the vacation rental market. Some destinations actively promote vacation rentals as part of their tourism strategy, understanding the economic benefits of attracting tourists who prefer these accommodations.
- Vacation rentals are increasingly favored by younger generations, who appreciate the flexibility, affordability, and experiential nature these rentals offer. These travelers tend to gravitate towards lesser-known destinations, steering clear of conventional tourist hotspots. Additionally, social media significantly influences their travel choices, with a penchant for "Instagrammable" or distinctive properties.
- Despite enhancements in verification and review systems, guests still face trust issues when booking vacation rentals. Scams, fraudulent listings, and misleading property photos can deter potential guests from opting for vacation rentals.
- Economic downturns, including recessions and high inflation periods, often lead to reduced discretionary spending on travel. In these challenging times, travelers might scale back on vacations or choose more affordable accommodations, directly affecting the demand for vacation rentals. Furthermore, with travelers becoming increasingly eco-conscious, vacation rental owners face mounting pressure to offer environmentally friendly options. These include energy-efficient appliances, waste reduction initiatives, and sustainable amenities.
Vacation Rental Market Trends
Online Booking Mode to Hold Significant Market Share
- Online booking mode is expected to gain popularity in coming years owing to increased internet penetration and ease of access to booking platforms. Online platforms build trust between hosts and guests by providing transparent booking processes, secure payment systems, and dispute-resolution mechanisms. Features such as verified identification, host profiles, and guest reviews enhance security for both parties. Guests feel more confident booking with hosts who have positive reviews and verified identities, while hosts are more comfortable renting to guests with verified profiles.
- Online booking platforms have revolutionized how travelers book accommodations, offering hosts and guests unmatched convenience, transparency, and a wide selection of property options. With real-time booking, travelers can secure vacation rentals anytime, anywhere in the world. This advancement removes the necessity for phone calls or email exchanges with hosts, streamlining and expediting the booking process.
- As global internet access expands, it's driving the surge of online bookings in the vacation rental market. With more individuals gaining internet access, booking vacation rentals online has become easier and more convenient for a wider audience. This evolution is transforming travel planning and fueling the growing embrace of online booking platforms.
- Smartphones and mobile apps have transformed vacation rental bookings, making the process more convenient than ever. Major platforms like Airbnb and Vrbo provide mobile apps, enabling users to book properties from virtually anywhere whether at home, on the go, or while traveling. This constant accessibility has led to an increase in frequent bookings.
Asia Pacific is Expected to Witness a High Market Growth Rate
- Asia Pacific is expected to hold a significant CAGR during the forecast period. Countries such as China, India, Japan, and South Korea are witnessing a surge in domestic tourism fueled by expanding urban populations, a growing middle class, and heightened interest in local travel. The APAC region stands out as a pivotal center for international tourism, not only as a source of outbound travelers, notably Chinese and Indian tourists but also as a favored destination for foreign visitors. Nations, including Thailand, Japan, Australia, and Indonesia, are experiencing robust demand for vacation rentals, especially in major cities and tourist-centric areas.
- China has seen a notable uptick in domestic tourism, with a growing number of individuals choosing to vacation within the nation. This shift has heightened the appeal of vacation rentals, positioning them as a favored alternative to traditional hotels. As urbanization continues to reshape China's landscape, there's been a notable uptick in domestic travel, largely driven by rural residents migrating to urban centers.
- The ascent of online travel agencies and vacation rental platforms has been instrumental in propelling this market expansion. In the wake of Airbnb's exit from the Chinese market, a cadre of local platforms, including Tujia, Meituan, Muniao, Fliggy, and Xiaozhu, have rapidly established themselves as dominant players in the online travel and short-term rental arena.
- As internet infrastructure advances, especially in emerging markets like India, Indonesia, Thailand, China, and Japan online vacation rental platforms to gain traction in coming years. Consequently, travelers from these regions are able to explore and book vacation rentals in international markets, driving up the demand for short-term rentals.
Vacation Rental Industry Overview
The vacation rental market is highly fragmented, with global and local conglomerates and specialized players operating across various segments. While several large multinational companies dominate specific high-value segments, numerous regional and niche players contribute to the overall competition, making the market highly diverse. This fragmentation is driven by the demand for the vacation rental market across a wide range of end-user verticals, allowing both large and small companies to coexist and thrive in the market.
Leading companies in the vacation rental market include. These companies have established strong brand recognition and extensive global operations, enabling them to command significant market share. Their strengths lie in innovation, broad product portfolios, and strong distribution networks. These leaders often engage in strategic acquisitions and partnerships to maintain their competitive edge and expand their market reach.
Leading vacation rental platforms are actively expanding their reach into untapped regional and global markets. These companies are customizing their services and platforms to meet local preferences and regulatory requirements. Additionally, many platforms are utilizing artificial intelligence (AI) and machine learning to improve the user experience.
Vacation Rental Market Leaders
-
Airbnb Inc.
-
Booking Holdings, Inc.
-
Expedia Group, Inc.
-
Hotelplan Holding AG
-
MakeMyTrip Pvt. Ltd.
*Disclaimer: Major Players sorted in no particular order
Vacation Rental Market News
- October 2024: Airbnb has introduced a new service catering to time-strapped potential hosts. Dubbed the Co-Host Network, this feature enables property owners to effortlessly set up listings, manage bookings, and communicate with guests, all directly through the Airbnb app. The company reports over 10,000 co-hosts operating in 10 countries. Utilizing Airbnb's personalized ranking algorithm, hosts receive co-host recommendations tailored to factors like location, hosting experience, and home type.
- July 2024: MakeMyTrip partnered with budget airline Air India Express to launch 'Xpress Holidays', a platform that allows travelers to book complete holiday packages. This platform is available on the Air India Express website and mobile app, and MakeMyTrip also features these holiday packages on its website.
Vacation Rental Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers/Consumers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Impact of COVID-19 Aftereffects and Other Macroeconomic Factors on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Rise of Online Booking Platforms
5.1.2 Changing Travel Preferences and Demographics
5.2 Market Restraints
5.2.1 Safety and Security Concerns
6. MARKET SEGMENTATION
6.1 By Booking Type
6.1.1 Home
6.1.2 Apartments
6.1.3 Resort/Condominium
6.1.4 Others
6.2 By Booking Mode
6.2.1 Online
6.2.2 Offline
6.3 By Geography***
6.3.1 North America
6.3.2 Europe
6.3.3 Asia
6.3.4 Australia and New Zealand
6.3.5 Middle East and Africa
6.3.6 Latin America
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Airbnb Inc.
7.1.2 9flats.com Pte Ltd.
7.1.3 Wyndham Destinations Inc.
7.1.4 Expedia Group Inc.
7.1.5 MakeMyTrip Pvt. Ltd.
7.1.6 Oravel Stays Pvt. Ltd.
7.1.7 Booking Holdings Inc.
7.1.8 Hotelplan Holding AG
7.1.9 NOVASOL AS
7.1.10 TripAdvisor Inc.
7.1.11 Destination Club
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. FUTURE OUTLOOK OF THE MARKET
Vacation Rental Industry Segmentation
Vacation rentals are privately owned properties leased to travelers for short-term stays, primarily for leisure or vacation purposes. Typically fully furnished and equipped with traveler-centric amenities, these rentals present a viable alternative to conventional hotel accommodations.
The study tracks the revenue accrued through the sale of the vacation rental market by various players across the globe. The study also tracks the key market parameters, underlying growth influencers, and major vendors operating in the industry, which supports the market estimations and growth rates over the forecast period. The study further analyses the overall impact of COVID-19 aftereffects and other macroeconomic factors on the market. The report’s scope encompasses market sizing and forecasts for the various market segments.
The vacation rental market is segmented by booking type (home, apartments, resort/condominium, others), booking mode (online and offline), and geography (North America, Europe, Asia Pacific, Middle East & Africa, and Latin America). The market sizes and forecasts regarding value (USD) for all the above segments are provided.
| By Booking Type | |
| Home | |
| Apartments | |
| Resort/Condominium | |
| Others |
| By Booking Mode | |
| Online | |
| Offline |
| By Geography*** | |
| North America | |
| Europe | |
| Asia | |
| Australia and New Zealand | |
| Middle East and Africa | |
| Latin America |
Vacation Rental Market Research FAQs
How big is the Vacation Rental Market?
The Vacation Rental Market size is expected to reach USD 79.39 billion in 2024 and grow at a CAGR of 6.13% to reach USD 106.89 billion by 2029.
What is the current Vacation Rental Market size?
In 2024, the Vacation Rental Market size is expected to reach USD 79.39 billion.
Who are the key players in Vacation Rental Market?
Airbnb Inc., Booking Holdings, Inc., Expedia Group, Inc., Hotelplan Holding AG and MakeMyTrip Pvt. Ltd. are the major companies operating in the Vacation Rental Market.
Which is the fastest growing region in Vacation Rental Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Vacation Rental Market?
In 2024, the Asia Pacific accounts for the largest market share in Vacation Rental Market.
What years does this Vacation Rental Market cover, and what was the market size in 2023?
In 2023, the Vacation Rental Market size was estimated at USD 74.52 billion. The report covers the Vacation Rental Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Vacation Rental Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Vacation Rental Industry Report
Statistics for the 2024 Vacation Rental market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Vacation Rental analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
