Vacation Rental Market size to grow by USD 56.98 billion from 2024 to 2028, Accommodation industry to boost market growth, Technavio

NEW YORK, March 21, 2024 /PRNewswire/ -- The Vacation Rental Market is estimated to grow by USD 56.98 billion from 2023 to 2028, growing at a CAGR of 5.12%. The accommodation industry, fueled by platforms like Airbnb, is growing due to tourism expansion and the popularity of short-term rentals. Governments' tourism strategies attract more tourists, especially millennials seeking budget-friendly quality accommodations. The demand for diverse rental properties, offering higher returns, is rising, making short-term vacation rentals a lucrative investment choice, driving market growth. The vacation rental market is fragmented owing to the presence of many global and regional companies. A few prominent companies that offer vacation rental market are 9flats.com PTE Ltd., Accor SA, Agoda Co. Pte. Ltd., Airbnb Inc., AltexSoft Inc., Bennington Properties LLC, Bluefish Vacation Rentals, BoutiqueHomes, Clickstay Ltd., Elite Destination Homes, Elite LLC, Holidu GmbH, Hotelplan Management AG, MakeMyTrip Ltd., NOVASOL AS, Oravel Stays Ltd., TripAdvisor Inc., VIVI HOLIDAY HOMES S.L., World Travel Holdings, Wyndham Hotels and Resorts Inc., and Expedia Group Inc..

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Company Offering:

• Accor SA: The company offers villa vacation rentals through different properties such as LA VERANDA OCEAN VILLA 1 Double Bed, Overwater Pool Villa Ocean, 3 Bedrooms Pool Villa, Standard 2 Bedroom Villa 2 King Beds, etc.

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By Geography, the market is classified as Europe, North America, APAC, Middle East and Africa, and South America. Europe will have the largest share of the market.

Europe is poised to contribute 35% to global market growth. Analysts detail regional trends, highlighting Europe's significant market role. Increasing travel desire, supported by tourism industry growth, drives market demand. Rising customer awareness of vacation rentals, established players like Hotelplan Holding AG, and an aging population increasing leisure time fuel regional market growth.

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The accommodation industry, including platforms like Airbnb, experiences significant growth due to expanding tourism. Global tourism drives market expansion, supported by government strategies. Millennials favor budget-friendly options, boosting demand for short-term rentals. Various rental properties offer higher returns, driving rapid growth in short-term vacation rentals. Growing tourism industry and increasing popularity of short-term vacation rental properties

• The rising availability of instant booking features is the primary trend shaping market growth. 
• Risks associated with fraudulent houses, apartments, and homestays is a challenge that affects market growth. 

Market Segmentation

By Management, the market is classified into

• Managed by owners
• Professionally managed

The managed by owners segment contributes the largest share of the market. The managed by owners segment, comprising properties managed by owners, is poised for significant growth. Small private hotels and resort landlords dominate this segment. Increased personal interaction and premium property demand drive growth. However, property owners seeking reduced expenses may opt for self-management, potentially impacting segment growth.

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Analyst Review:

The vacation rental market, encompassing short-term rentals, holiday homes, and rental properties, has witnessed exponential growth, driven by platforms like Airbnb, VRBO, HomeAway, and Booking.com. These platforms, along with vacation rental management software, have transformed the industry, offering travelers unique accommodation options worldwide.

In the U.S. market, companies like TurnKey Vacation Rentals and iProperty Management cater to diverse traveler needs, while startups and third-party booking companies provide innovative solutions. Millennials, leveraging social media and the internet, are key drivers of this growth, seeking authentic experiences in destinations like Beijing, Shanghai, Seoul, and Rome.

Accommodation types range from homes and apartments to resorts/condominiums, with amenities such as barbeque pits, swimming pools, and tennis courts enhancing the appeal. Online booking modes are popular among Millennials and Gen X, while Baby Boomers prefer offline methods.

In Europe, destinations like Croatia offer diverse vacation rental options, including glamping sites and properties near attractions like the Great Barrier Reef and Whitsundays. Companies like Oravel Stays Private Limited and Oyo are expanding their presence in this market.

Despite challenges such as regulatory compliance and supply-demand dynamics, the vacation rental market continues to grow, offering travelers unique experiences and investment opportunities worldwide.

Market Overview:

The Vacation Rental Market thrives on the popularity of short-term rentals facilitated by platforms like Airbnb, VRBO, and Booking.com. With the rise of vacation rental management software and platforms, property owners can efficiently manage bookings, maintenance, and amenities. Investment in vacation rentals continues to grow, driven by the promise of high returns and a diverse range of destinations. However, market dynamics include challenges such as regulatory compliance and increasing competition. Innovations in technology and data analytics offer opportunities for growth and improved guest experiences. As travelers seek unique accommodations, the vacation rental market adapts to meet demand, offering diverse options from cozy homes to luxurious resorts, catering to a wide range of preferences and budgets.

Related Reports:

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 Europe vacation rental market size is projected to reach a value of USD 60.18 billion with a CAGR of 12.73% between 2022 and 2027.

TOC:

1 Executive Summary

2 Market Landscape

3 Market Sizing

4 Historic Market Size

5 Five Forces Analysis

6 Market Segmentation by 

7 Market Segmentation by 

8 Customer Landscape

9 Geographic Landscape

10 Drivers, Challenges, and Trends

11 Vendor Landscape

12 Vendor Analysis

13 Appendix

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