SAN FRANCISCO, May 21, 2020 /PRNewswire/ -- The global vacation rental market size is expected to reach USD 113.9 billion by 2027, according to a new report by Grand View Research, Inc., expanding at a CAGR of 3.4% over the forecast period. Travelers are more inclined towards vacation rental property and homes over hotels owing to the comfort, low cost, additional privacy, kids and pet friendly nature of accommodation. Rising expenditure on travel, vacations, and accommodation among millennials is driving the market. As per the report published by Airbnb, millennials and younger generations will account for 75% of all consumers and travelers by 2025.
Low cost compared to accommodation in hotels with all the similar amenities available in vacation rental homes is acting as a major factor for the growth of the market. As per the TurnKey Vacation Rentals survey, 65% of millennial travelers ranked cost as the most important factor in choosing a vacation rental. Moreover, consumers are more inclined towards preparing their own meal while on vacation and having children friendly stay. As per the report of iPropertyManagement, 71% of travelers with children preferred access to cooking their own meals.
Key suggestions from the report:
By accommodation type, home is expected to reach USD 55.02 billion by 2027
Online booking mode was valued at USD 25.06 billion in 2019
Asia Pacific is expected to register a revenue-based CAGR of 5.6% from 2020 to 2027
Increasing supply of properties is lowering the accommodation price and is driving consumers' inclination towards low cost vacation rental properties over hotels. 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.
In terms of accommodation type, the resort/condominium segment is estimated to be the fastest growing segment with a CAGR of 4.4% from 2020 to 2027. Rising popularity of tourism owing to increasing number of travelers seeking to unwind while enjoying luxury amenities is expected to fuel the growth of segment. 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. As per iPropertManagment, 12% of millennials plan to stay in a villa/estate in the next year vs. only 6% of Boomers and 9% of Gen Xers.
Europe dominated the market for vacation rental with a revenue-based share of 35.9% in 2019. The growth is majorly attributed to rising consumer expenditure on glamping and booking accommodation in resort and condominium. In 2018, Marriott International announced the launch of Homes & Villas by Marriott International via Tribute Portfolio Homes platform. In April 2018, the program was launched in partnership with U.K.-based property management group Hostmaker and debuted with an inaugural 200-plus homes in London. Later in October 2018, company expanded the Tribute Portfolio Homes portfolio, adding homes in Paris, Rome, and Lisbon.
Grand View Research has segmented the global vacation rental market on the basis of accommodation type, booking mode, and region:
Vacation Rental Accommodation Type Outlook (Revenue, USD Million, 2016 - 2027)
Glamping Market – Factors such as rise in eco-tourism and consumer inclination toward adventure travel are projected to drive the growth.
Residential Heat Pump Market – increasing importance of sustainable and cost-effective HVAC solutions, coupled with implementation of government initiatives aimed at reducing carbon emissions, is expected to promote the scope for residential heat pumps in the residential sector.
Glass Tableware Market – growing catering and hotel industry at the global level owing to increased popularity of dinner out among the working class individuals is projected to expand the scope for glass tableware with aesthetic appeal.
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About Grand View Research
Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.