Vacation rentals are alternate lodging options comprising short-term rental apartments, farm stays, private homes, cabins, beach houses, villas, cottages, and chalets. With the significant growth of tourism and hospitality market across the globe, the global vacation rental industry is evolving at a rapid pace. The immense popularity of vacation rentals is also being propelled by the rising prominence of smartphones, Internet, and other digital technologies as vacation rentals are increasingly booked online or through mobile apps. Technavio’s recent vacation rental industry analysis expects the revenue generated from vacation rental reservations to reach a new high over the next few years.
Why Are Vacation Rentals Gaining Huge Popularity?
Vacation rentals offer substantial saving opportunities to individuals in terms of rent and cheaper food as most vacation rentals are equipped with a fully functional kitchen. In addition, they also provide more value in terms of space and privacy. Since tariffs for hotel rooms are rising, it has pushed the adoption of vacation rentals further, particularly among affluent travellers. Moreover, vacation rentals offer other benefits including personalized entertainment, better dining options, and more space, which is leading to more people opting for vacation rentals.
Global Vacation Rental Industry Growth Rate Overview
Using vacation rentals is often cheaper, more convenient, and flexible when compared to booking with hotels or long-term renting. These benefits are resulting in the vacation rental industry gaining immense traction and being embraced especially by millennials and Gen Z. According to the latest report from Technavio, the global vacation rental industry size is expected to grow USD 57.1 billion from 2018-2022, accelerating at a CAGR of nearly 7% during the forecast period.
The growth of the tourism industry and the increasing popularity of short-term rental properties is one of the major factors that will drive the market’s growth prospects during the next few years. It has been observed that countries in several regions including the EU, North America, APAC, and the Middle East and North Africa have witnessed a considerable increase in the number of international tourist arrivals in recent years. With the increasing attempts to boost their country’s GDP, several economies are expanding their tourism industry. Governments across the globe have started focusing on implementing strategies favouring the growth of the global tourism industry. The growth of the tourism industry will subsequently drive the need for vacation rental properties, fuelling market growth over the next five years.
Some of the world’s leading vacation rental companies include Airbnb, HomeAway, 9Flats, TripAdvisor, Wimdu, World Travel Holdings, and Wyndham Worldwide. This market is moderately fragmented with large- and small-sized players with high competition prominent among these players. However, as international players increase their footprint in the market with their huge infrastructure and reach, regional vendors find it increasingly tough to compete in terms of quality and technology.
One of the top vacation rental industry trends is that the number of vacation rentals booked online and trough mobile app have progressed immensely over the last few years, creating greater opportunities for market growth. Currently, Europe is the largest revenue contributing region in the vacation rentals market, accounting for 53% of the overall market share. The promotion of renting out a vacation rental home on social and digital platforms is expected to play a key role in attracting these new customers in the region.
Check Technavio’s Global Vacation Rental Market Report 2018-2022
Check Technavio’s Global Vacation Rental Market Report 2018-2022 for more market insights related to the global vacation rental market growth. This market research report provides the latest market size and market development for major market segments in terms of product types and regional market landscape. The report contains detailed market trends, market drivers, market challenges and key opportunities. In-depth market analysis such as Porter’s five force model, and comprehensive competitive landscape including detailed profiles of top companies are also included in the report.