The global vacation rental market was estimated at US$ 22.7 billion in 2020 and is expected to reach over US$ 111.2 billion by 2030, poised to grow at a CAGR of 17.3% from 2021 to 2030.
The rapid growth in the travel and tourism sector across the globe is a major contributor in the growth of the global vacation rental market. The expenditure of the consumers in tourism activities is growing rapidly. The demand for the vacation rentals among the travelers is rising rapidly owing to the conveniences and low costs associated with it. Moreover, the family with children tends to opt for vacation rentals owing to the comfort and affordability. The millennials are expected to drive the market growth in during the forecast period. As per Airbnb, by the year 2025, the younger generations and the millennials are expected to constitute around 75% of the traveler population. Furthermore, rising awareness regarding the alternatives to hotels and lodges during tourism is contributing towards the market growth. Tourists are increasingly adopting the private beach houses, private homes, villa, and apartments on rent especially during their short stays. The tourism activities are increasing rapidly owing to the various factors such as sports, wellness, and adventure activities undertaken by the consumers.
The outbreak of the COVID-19 pandemic severely harmed the tourism activities across the globe. The travelling restrictions across borders and nationwide lockdowns in almost every country on the globe has adversely impacted the vacation rental market as both the domestic and international tourism were halted. According to the World Tourism Organization, the tourism activities witnessed a fall of over 70% in 2020. However, the conditions are expected to get better and the market revenues are expected to ramp up from 2021. The vacation rental market is anticipated to grow owing to the anticipated growth in the revenge tourism activities. Furthermore, the improved connectivity and infrastructure such as roadways, air ways, and railways across the developing and underdeveloped markets are anticipated to significantly contribute towards the development of the market. Moreover, the social media and internet platforms are exponentially contributing in the promotions of the various tourist destinations, hotels, and restaurants among the millennials, which drives the growth of the global vacation rental market.
Scope of the Vacation Rental Market
|Market Size in 2020||US$ 22.7 billion|
|Revenue Projection by 2030||US$ 111.2 billion|
|Growth Rate||CAGR of 17.3% From 2021 to 2030|
|Fastest Growing Market||Asia Pacific|
|Forecast Period||2021 to 2030|
|Companies Mentioned||9flats, Airbnb, Booking.com, Expedia, Hotelplan Management AG, MAKEMYTRIP PVT. LTD., NOVASOL, OYO Hotels & Homes, TripAdvisor LLC, Wyndham Destinations, Trivago, Agoda Company Pte. Ltd., Yatra Online Private Limited, Hotwire, Inc., HotelsCombined, Hotels.com, BookingBuddy.com, Inc.|
Based on the accommodation, the homes segment accounted for around 48% of the market share in 2020. The comfort, convenience, safety, spacious, and access to amenities are the major features provided by the homes vacation rental that had resulted in the increased adoption among the travelers. Usually, the availability of homes on rent especially in the remote and rural destination at a cheap price is driving the segment’s growth.
On the other hand, the resorts segment is estimated to be the fastest-growing segment during the forecast period. The increasing preferences of the millennials to opt for premium and luxury services and hotels is expected to drive the growth of this segment. The resorts provide function rooms, club houses, swimming pools, and various premium services that attracts the attention of the millennials and the generation X.
Booking Mode Insights
Based on the booking mode, the offline segment accounted for over 70% of the market share in 2020. The baby boomers and the family travelers have increased preferences for the offline booking mode. Moreover, the wide spread penetration of the various offline ticket providers and travel planners have huge contributions in the growth of this segment.
On the other hand, the online is estimated to be the most opportunistic segment during the forecast period. The rapidly surging number of internet users coupled rising adoption of smartphones across the globe is a major factors that propels the growth of the online booking mode. The increasing popularity of the online ticket platforms are projected to play a crucial role in the market growth.
Based on region, Europe dominated the market by acquiring a market share of around 36% in 2020. Europe is characterized by the presence of top tourism operators. Moreover, increased tourism activities in Europe owing to its huge popularity of destinations among the tourists and the presence of developed infrastructure has exponentially contributed towards the market growth. Countries like Germany, UK, and Spain are expected to have significant market shares in the European market.
Asia Pacific is estimated to be the most opportunistic market during the forecast period. Asia Pacific is among the most popular destinations for the travelers. The growing dependency of several economies on tourism and the rising government investments on the development of sophisticated infrastructure for attracting tourists is a major driver of the market. Moreover, the government of countries such as India, Indonesia, China, Vietnam, Australia, and Thailand are focusing on developing tourism sector in order to generate revenues, employment, and to boost the overall development of the region through tourism. Furthermore, the increasing awareness among the travelers regarding the availability of the vacation rentals is fueling the demand. Hence, the Asia Pacific is anticipated to be the fastest-growing market.
Key Companies & Market Share Insights
The market is moderately fragmented with the presence of several local companies. These market players are striving to gain higher market share by adopting strategies, such as investments, partnerships, and acquisitions & mergers. Companies are also spending on the development of improved products. Moreover, they are also focusing on maintaining competitive pricing.
In April 2019, Marriott International introduced Homes & Villas that offers 2,000 luxury homes across North America, Europe, and Latin America.
The various developmental strategies like new product launches, acquisitions, and partnerships fosters market growth and offers lucrative growth opportunities to the market players.
Some of the prominent players in the global vacation rental market include:
Segments Covered in the Report
By Booking Mode
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