July 23, 2024
Vacation Rental Market

Rising Demand for Vacation Rentals to Drive the Growth of the Global Vacation Rental Market

The global Vacation Rental Market is estimated to be valued at USD 65,465.4 million in 2021 and is expected to exhibit a CAGR of 5.3% over the forecast period 2022-2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
The vacation rental market refers to the temporary renting of fully furnished apartments, houses, or resorts to travelers on a short-term basis. These accommodations offer numerous advantages over traditional hotel stays, including cost-effectiveness, privacy, and access to amenities. The increasing preference for unique travel experiences and the rising demand for vacation rentals among millennials and families are the key factors driving the growth of this market. Additionally, the growing popularity of online platforms and the ease of booking vacation rentals through mobile applications are further propelling market growth.

Market Key Trends:
One key trend in the vacation rental market is the integration of technology to enhance the guest experience and streamline operations. Vacation rental platforms are increasingly incorporating automated check-ins, digital concierge services, and smart home features to cater to the evolving needs of travelers. These technological advancements not only improve the convenience and security of guests but also enable property owners to manage their rentals more efficiently. For instance, keyless entry systems, voice-controlled devices, and personalized recommendations based on guest preferences are becoming common in vacation rental properties. This trend is expected to continue driving the growth of the global vacation rental market in the forecast period.

Segment Analysis:

The vacation rental market can be segmented based on type, location, and booking platform. Based on type, the market can be classified into fully furnished and serviced vacation rentals. Fully furnished vacation rentals dominate the market due to the convenience they offer to travelers. These rentals come with all the necessary amenities such as furniture, appliances, and utilities, providing a home-like experience for the guests. Serviced vacation rentals, on the other hand, offer additional services such as housekeeping and concierge, catering to the needs of luxury travelers.

In terms of location, the vacation rental market can be segmented into urban and rural areas. Urban vacation rentals are more prevalent and dominate the market, mainly due to the higher demand from business travelers, tourists, and locals seeking short-term accommodation in cities. These rentals are strategically located near popular attractions, business districts, and transportation hubs, providing easy accessibility for travelers. Rural vacation rentals, although less dominant, are gaining popularity among travelers seeking a peaceful and secluded stay away from the bustling cities.

The market can also be segmented based on the booking platform used by travelers. Online travel agencies (OTAs) and vacation rental platforms are the two main booking platforms in the market. OTAs, such as Expedia and Booking.com, dominate the market due to their extensive network and marketing capabilities. These platforms offer a wide range of vacation rentals and provide travelers with convenient booking options. Vacation rental platforms, such as Airbnb, have gained significant traction in recent years, allowing homeowners to directly list and rent out their properties to travelers. These platforms provide a unique and personalized experience for both hosts and guests.

Key Takeaways:

Global Vacation Rental Market Demand is expected to witness high growth, exhibiting a CAGR of 5.3% over the forecast period. The market is being driven by the increasing acceptance of vacation rentals as a cost-effective and flexible accommodation option. Travelers are increasingly opting for vacation rentals due to the amenities and privacy they offer compared to traditional hotels. Additionally, the rise of online booking platforms has made it more convenient for travelers to search and book vacation rentals.

In terms of regional analysis, North America is the fastest-growing and dominating region in the vacation rental market. The region has a strong presence of key players such as Airbnb and Booking.com, along with a large number of vacation rental properties. The increasing popularity of domestic travel and the preference for unique travel experiences are driving the growth of the vacation rental market in North America. Europe also holds a significant market share due to the presence of established vacation rental players like NOVASOL and a strong tourism industry.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it