Vacation Rental Market to Grow by $84.41 Billion thru 2027

The vacation rental market size is estimated to grow at a CAGR of 8.54%, and the size of the market is forecast to increase by USD 84.41 billion between 2022 and 2027. The market is fragmented due to the presence of diversified international and regional vendors. The increasing popularity of short-term rental properties and the growing tourism industry are notably driving market growth. 

The rapid increase in the tourism industry globally is significantly contributing to a country's GDP. This growth is due to the implementation of strategies from multiple governments worldwide. Furthermore, the high demand for vacation rental properties is increasing due to the increasing number of tourists.  Baby boomers are also another factor in the growth of the tourism sector, as compared to long-term rental properties.

Short-term rental properties bring increased returns if they are marketed properly. The advantages, such as increased comfort and affordability, attract consumers to such spaces. Hence, these factors are expected to drive the growth of the market during the forecast period. The report offers an up-to-date analysis regarding the current market scenario, the latest trends and drivers, and the overall market environment.

Vacation Rental Market 2023-2027: Vendor Analysis

The market is fragmented, and the degree of fragmentation will accelerate during the forecast period. Competitors must focus on differentiating their product offerings with unique value propositions to strengthen their foothold in the market. Market vendors also must leverage the existing growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments. 9flats.com PTE Ltd., Accor SA, Agoda Co. Pte. Ltd., Airbnb Inc., Bennington Properties LLC, Bluefish Vacation Rentals, BoutiqueHomes, Clickstay Ltd., Elite Destination Homes, Elite LLC, Expedia Group Inc., Holidu GmbH, Hotelplan Management AG, MakeMyTrip Ltd., NOVASOL AS, Oravel Stays Ltd., Places4stay SL, TripAdvisor LLC, World Travel Holdings, and Wyndham Hotels and Resorts Inc. are among some of the major market participants.

Vendor Offering

• 9flats.com PTE Ltd. - The company offers vacation rental services through hotels such as The Capitol Kempinski Hotel Singapore, Somerset Bencoolen Singapore, Carlton City Hotel Singapore, etc.
• Bennington Properties LLC - The company offers Sunriver vacation rentals through different properties such as Gannet 15, Grizzly 6, Rogue Lane 3, Big Sky 8, Bridge Drive 52980, etc.
• BoutiqueHomes - The company offers vacation rental services through different properties such as CASA DONA OLAVA, CASA FANTINI, VILLA ALTA VISTA, JONKMANSHOF 30, etc.

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Vacation Rental Market 2023-2027: Market Dynamics

Major Trends

The adoption of effective promotional strategies is the major trend shaping the vacation rental market growth. The primary factor is the market advertising strategies that various vendors adopt along with celebrity endorsements. As a result, it helps them to expand their customer base. Discounts, seasonal offers, and contests are being offered by vendors on various services. The increased internet usage is the primary factor for the increased potential of major vendors in the market. Most of the vendors have a significant online presence, that helps them to target various customers with online strategies such as social media campaigns and promotional strategies. The popularity of social networking has contributed to increased investments in these strategies. Hence, the above-mentioned factors are expected to significantly change customer perception in the vacation rental market.

Significant Challenges

Risks associated with fraudulent vacation rental houses, apartments, and homestays are the significant challenge restricting the market growth. The various misconducts such as Scams, fraudulent reviews, and unethical dealings are primary factors restricting the market. Due to this, customers mistrust some vendors. Airbnb Inc and HomeAway provide user reviews and ratings for the customers to help them find the best service. The increased percentage of risks can lead to customers changing their opinion about the service and shifting to alternative forms of lodging, such as hotels. Hence, these factors are expected to restrain the growth of the market during the forecast period.