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2022

Vacation Rentals Market

Vacation Rentals Market Size, Share, Competitive Landscape and Trend Analysis Report by Accommodation, by Price Point, by Booking Type, by Location Type, by End User Generation : Global Opportunity Analysis and Industry Forecast, 2021-2031

CG : Travel & Luxury Travel

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Author's: Samriddhi Chauhan | Roshan Deshmukh
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Vacation Rentals Market Research, 2031

The global Vacation Rentals Market Size was valued at $91.2 billion in 2021, and is projected to reach $315 billion by 2031, growing at a CAGR of 12.4% from 2022 to 2031. Vacation rental refers to transient public lodging property let out on rent to tourists as an alternative to hotels. Typically, vacation rentals stays are shorter than 30 days. They consist of furnished apartments and professionally managed resorts or houses. Some popular vacation rentals worldwide include Airbnb, Expedia, HomeAway, VRBO, and others.

 

Vacation Rentals Market, Vacation Rentals Industry, Vacation Rentals Market Size, Vacation Rentals Market Share, Vacation Rentals Market Trends

The vacation rentals market is segmented into Accommodation, Price Point, Booking Type, Location Type and End User Generation.

According to Airbnb, more than 1.6 billion people on the planet are at least 50 years old. Additionally, travel is a top goal for a significant number of Baby Boomers in North America. 99% of Baby Boomers anticipate taking leisure travels in the upcoming year, with an average of 5 excursions planned, according to an AARP Research survey from 2017. During their holidays, this enormous market of customers will definitely look for vacation rentals, and, according to Tripping.com, Boomers are anticipated to drive the largest share of rental growth, with a 17% estimated increase in those who plan to rent this year. Already, Airbnb's new agreement with Over 60, an online network for seniors, will support and boost the use of Airbnb within the senior community in Australia and New Zealand.

The Baby Boomer group is predicted to use home-sharing websites to book their travel accommodations for a number of different reasons. One of them has to do with the Boomers' emphasis on relationships and spending time with family. The desire to spend time with loved ones is a major driving force for travel for Baby Boomers. Rentals that encourage family or multigenerational activities are therefore particularly alluring. According to a Tripping.com survey, multigenerational travel is one of the most popular travel trends right now, with grandparents, parents, and kids going on trips together throughout the globe. Platforms for renting out homes are well known for offering lodgings with more space and family-friendly facilities. It's not a shock that Baby Boomers are beginning to use these platforms to plan their family holidays.

Similar to the millennial age, Baby Boomers are starting to be drawn to authentic travel experiences. A sizeable chunk of this older demographic says they would prefer to dine or go on a tour with locals when they are travelling. 18% of people are now interested in staying with locals when it comes to lodging. Once again, because they are known for offering distinctive and genuine vacation experiences, house sharing websites like Airbnb are in a prime position inside the market.

It's definitely worth getting in on the ground floor with the rise in Baby Boomers travelling across the world. Baby Boomers are a great customer base and great visitors. Retirement travellers and snowbirds frequently plan longer holidays and book longer stays, according to VRBO. In addition, according to AARP research, Baby Boomers tend to have more disposable income and are less concerned about setting aside money for personal travel. There is a global network of vacationers who often stay longer and spend more money. Aftermath of terror attacks in the country has resulted in cancelling of bookings to Sri Lanka by various tour operators. A similar catastrophic effect has been endured by the tourism industry of France after the Paris attacks, resulting in a loss of more than $787 million.

In the face of troubling scientific certitude and stands around the unsustainable state of environment, an increased number of engaged stakeholders in the industry have saunter toward sustainability over the past few years. Leading stakeholders in the industry are spending significant time and resources to create eco-friendly accommodation even in the face of high short-term development costs and murky return on investments (ROI). Front runners in the tourism industry are successfully finding new opportunities in social and environmental issues to create new business models, corporate strategies, and collaborative partnerships.

This changing landscape is backed by changing consumer behaviour. Almost three-fourth of the travels prefer sustainable stay and almost 80% of the travellers are intending to stay at least once in an eco-friendly or green accommodation; however, travellers often face common barriers such as extra expenditure, and lack of information to name a few. Taking long-term view, mutually beneficial partnership between travel agency and engaged stakeholders is expected to play a crucial role to provide seamless consumer experience in the upcoming years.

Political unrest and terrorism have affected the overall volume of foreign trips and choice of destination. Terrorism risk tends to profoundly intimidate the tourist affecting tourist perceptions of destinations and travel behaviour. A mismanaged disaster results in tarnishing the destination’s image, thereby impacting the revenues negatively in local tourism industry. For instance, Sri Lanka endured a long tourist slump in wake of the recent terror attacks in past couple of years.

The global vacation rental market is segmented into accommodation, price point, booking, location type, end user generation and region. The accommodation segment home, condos, hometown and villas. On the basis of price point, the market is categorized into economy, mid-range, and luxury. Depending on mode of booking, it is segregated into online travel agency, hotel website, and others. The location type covered in the study include resort area, rural area, small towns and others. Based on end user generation the market is classified as Gen Z, Millennials, Gen X, and Boomers. Region wise, it is studied across North America (U.S., Canada, and Mexico), Europe (Germany, Spain, UK, Italy, France, Switzerland, and rest of Europe), Asia-Pacific (India, China, Japan, Australia, and rest of Asia-Pacific), and LAMEA (Latin America, Middle East, and Africa).

Vacation Rentals Market by Accommodation

By accommodation, the home segment was the highest contributor to the market, in 2021, and is estimated to grow at a CAGR of 12.4% during the forecast period. This is attributed to homes tend to have 2-5 bedrooms and bathrooms. They also regularly come with fold-out beds, making it much more viable for a larger group to stay there comfortably for the duration of their vacation. However, the villas segment is expected to witness higher Vacation Rentals Market Growth rate during the forecast.

Vacation Rentals Market by Price Point

Depending on vacation rental market forecast by price point, the mid-range segment led the market in 2021, and is estimated to grow at a CAGR of 12.3% during the forecast period. This is attributed to value-for-money and comfortable rooms. Mid-range segment generally feature bigger rooms as compared to budget accommodations. The amenities and facilities provided by mid-range accommodations are slightly higher as compared to economy accommodations. The prices charged by them are also higher. However, the luxury segment dominated the global market owing to rise in disposable income.

Vacation Rentals Market by Booking Type

On the basis of vacation rental market analysis by booking, the direct booking segment exhibited the highest growth in 2021, and is estimated to register a CAGR of 12.3% during the forecast period. This is attributed to ease in booking through personal approach or via the official website. Travelers prefer booking accommodations on the spot for various reasons, such as uncertainty, unplanned travel, emergencies, or sometimes even out of choice. They also share their experience and feedback on social media platforms, which makes it easier for new audience to get an impression beforehand. In this manner, travellers can make appropriate stay decisions by themselves. However, the luxury segment is expected to witness a high growth rate of 13.1% during the forecast period.

Vacation Rentals Market by Location Type

On the basis of vacation rental market analysis by location type, the resort area segment exhibited the highest growth in 2021, and is estimated to register a CAGR of 12.7% during the forecast period. This is attributed to comforting accommodation that offer relaxation, privacy and recreation to its guests and are usually situated near scenic surroundings. They are also known to offer a variety of recreational activities and facilities, namely spa, gym, and pools. Resorts are relatively built on a larger spread of land and offer activities depending on the location. Therefore, leads to high Vacation Rentals Market Demand among travellers. However, the others segment is expected to witness a high growth rate of 14.1% during the Vacation Rentals Market Forecast period.

Vacation Rentals Market by End User Generation

On the basis of vacation rental market analysis by end user generation, the Gen Z segment exhibited the highest growth in 2021, and is estimated to register a CAGR of 12.7% during the forecast period. However, the Gen X segment is expected to witness a high growth rate of 14.4% during the forecast period.

Vacation Rentals Market by Region

Region wise, Europe has the highstest Vacation Rentals Market Share in 2021, and is estimated to grow at a CAGR of 11.9% during the forecast period. Increase in air connectivity, growth in intraregional travel, surge in affordable travel options, and rise in implementation of digital platforms have led to robust travel and tourism growth in the European countries. In addition, the European commission released a new framework called “Europe, the world’s No. 1 tourist destination,” to stimulate competitiveness and promote development of sustainable tourism. Therefore, growth in the travel tourism industry is expected to positively impact the travel accommodation market. Consumer spend preferences have shifted in favour of experiences, such as holidays. However, Asia-Pacific region is expected to witness high growth rate during the forecast period. The major factor that attracts the travellers in Asia-Pacific region is its niche destinations. The latest trend of exploring untapped locations, soul-searching trips, yoga retreats, and spread of health and wellness has created popularity across several countries including India, China, Australia, Indonesia, and Japan. Locations such as Himalayan foothills of Yunnan, Mission Hills Volcanic Mineral Springs & Spa, and Indonesian islands are gaining huge potential. The expanding middle-class households and rapid development of road and rail networks fuel the development of mid-range accommodations in this region; thereby, boosting the Vacation Rentals Industry growth.is another major trend that fuels the growth of the market.

They key players included in the vacation rental market analysis are MakeMyTrip Pvt. Ltd., Airbnb Inc., Tripping.com, TripAdvisor Inc., Extra Holidays, novasol as, HomeToGo, 9flats.com, Expedia, Inc., Vrbo, Booking.com, Hotels.com, HotelsCombined, Hotwire, Inc., Yatra Online Private Limited, Homestay.com, and atraveo gmbh.

Key Benefits For Stakeholders

  • This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the vacation rentals market analysis from 2021 to 2031 to identify the prevailing vacation rentals market opportunities.
  • The market research is offered along with information related to key drivers, restraints, and opportunities.
  • Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
  • In-depth analysis of the vacation rentals market segmentation assists to determine the prevailing market opportunities.
  • Major countries in each region are mapped according to their revenue contribution to the global market.
  • Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
  • The report includes the analysis of the regional as well as global vacation rentals market trends, key players, market segments, application areas, and market growth strategies.

Vacation Rentals Market Report Highlights

Aspects Details
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By Accommodation
  • Home
  • Condos
  • Hometown
  • Villas
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By Price Point
  • Economic
  • Mid Range
  • Luxury
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By Booking Type
  • Online Travel Agency
  • Direct Booking
  • Others
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By Location Type
  • Resort Area
  • Rural Area
  • Small Town
  • Others
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By End User Generation
  • Gen Z
  • Millennials
  • Gen X
  • Boomers
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Key Market Players

Hotwire, Inc., Expedia, Inc., TripAdvisor Inc., Vrbo, Homestay.com, Booking.com, novasol as, Yatra Online Private Limited, Airbnb Inc., Extra Holidays, HomeToGo, Tripping.com, 9flats.com, Hotels.com, MakeMyTrip Pvt. Ltd., HotelsCombined, atraveo gmbh

Analyst Review

Rapid boom in the tourism industry, shift of consumer spending from product to experience, upsurge in professional/business travel, and rise in number of people travelling for leisure propel the growth of the global vacation rental market. In addition, exploring niche tourist destinations has become a new trend among travellers, and hence, has generated remunerative opportunity for market expansion in countries such as Indonesia, Greece, and Africa, and others.

The operating industry players assert that the major factors which contribute toward expansion of the vacation rental include the flourishing tourism industry, especially in remote and niche markets. The trend of exploring untapped regions and carrying out recreational activities has gained the attention of travellers and shaped vacation rental in the recent past. The vacation rental giants majorly adopted business expansion by means of investment and acquisition as their key developmental strategy to sustain the stiff competition in the vacation rental sector. By acquiring existing accommodation chains, the key players aim to create a strong market presence and expand their global footprint. However, rise in online scams and fraudulence such as fake calls, credit card scams, and fake online travel agencies, are the major challenges faced by vacation rental companies, which hamper the growth of the global market.

The world economy witnessed a standstill after the 2009 economic crisis in Europe and the economic crisis in China. The crisis was transmitted primarily by trade and financial flows forcing millions back to poverty. Almost all the countries in the world were affected by this economic crisis. However, strong recovery from the crisis results in strong economic growth, especially in the developing economies. Economists generally attribute much of China’s rapid economic growth to two main factors, which include large scale capital investment and rapid productivity growth. The rise in economy of the countries helped different sectors to recover faster. Europe and Asia-Pacific witnessed high economic growth, which resulted in the growth of the revenue of the vacation rental market.

Author Name(s) : Samriddhi Chauhan | Roshan Deshmukh
Frequently Asked Questions?

The trend of solo travelers has risen significantly over the past few years. It is driven by the desire of the travelers to explore and learn new things or take a break from busy schedules.

The global vacation rentals market was valued at $91.2 billion in 2021, and is projected to reach $315.0 billion by 2031, registering a CAGR of 12.4%.

From 2022-2031 would be forecast period in the vacation rental market report

2021 is base year calculated in the vacation rental market report

MakeMyTrip Pvt. Ltd., Airbnb Inc., Tripping.com, TripAdvisor Inc., Extra Holidays, novasol as, HomeToGo, 9flats.com are the top companies hold the market share in sports training market

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Vacation Rentals Market

Global Opportunity Analysis and Industry Forecast, 2021-2031