Vacation rentals provide travelers an alternative to traditional hotels, allowing them to experience a local area through the comfort of a home, apartment, or other unique property. This provides them the ability to cook their own meals and live as a local resident would during their stay. The benefits over hotels include more space and amenities at a lower cost.
The global vacation rental market is estimated to be valued at US$ 72588.74 Mn in 2023 and is expected to exhibit a CAGR of 9.5% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Rising demand for unique experiences: The demand for unique experiences while traveling has been steadily increasing among global travelers. Vacation rentals provide a sense of living as a local during travel by offering private homes, villas or apartments for stays. Travelers are looking to engage more with local culture, communities and customs rather than just sightseeing. Vacation rentals help fulfill this rising demand for immersive local experiences, thereby propelling growth of the vacation rental market.
SWOT Analysis
Strength: Vacation rentals offer various amenities like entire homes, apartments, condos, villas or cabins allowing guests to have more space and flexibility than hotels. They also allow guests to feel like locals by staying in residential areas.
Weakness: Quality control and standardization is difficult for vacation rentals compared to hotels. Issues like cleanliness and maintenance can impact guest experience.
Opportunity: Growth of experiential travel is increasing demand for vacation rentals that allow guests unique local experience. Staying in residential areas allows guests to immerse in local culture.
Threats: Some locations have implemented new regulations limiting vacation rentals due to issues like rising rents and disrupting locals. Natural calamities can impact bookings and revenues if located in hazard prone regions.
Key Takeaways
The global Vacation Rental Market size is estimated to be valued at US$ 72588.74 Mn in 2023 and is expected to exhibit a CAGR of 9.5% over the forecast period 2023 to 2030.
The global vacation rental market is expected to witness high growth over the forecast period supported by rising experiences driven travel trend among millennials and generation Z. The Asia Pacific region is projected to grow at fastest pace during the forecast period backed by rapid tourism development in countries like Indonesia, Thailand and India. Growing middle class, inexpensive travel experiences and cultural attractions are fueling demand.
North America currently dominates the market led by United States. The country accounts for over 45% share of global vacation rental revenues supported by large travel and tourism industry, customer awareness about alternate accommodation options and Airbnb proliferation. Europe is second largest regional market supported by developed travel industry in countries like Spain, Italy and France where customers are more comfortable with concept of vacation rentals.
Key players operating in the vacation rental market are Airbnb, Expedia Group, Booking Holdings, TripAdvisor and Trip.com Group. Airbnb is currently the global market leader with over 7 million listed homes globally supported by wide network effect through growing host community. The company is focused on expanding into international markets through local partnerships and investments.
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