Vacation Rental Market Size, Share, Trends, Growth and Forecast 2032

Vacation Rental Industry Prospective:

The global vacation rental market size was worth around USD 92.93 billion in 2023 and is predicted to grow to around USD 129.99 billion by 2032, with a compound annual growth rate (CAGR) of roughly 3.80% between 2024 and 2032.

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Vacation Rental Market: Overview

A vacation rental is a private property that has been rented to travelers for a temporary period. It consists of private accommodations that are used to gain monetary earnings. Generally, vacation rentals consist of fully furnished apartments, lodges, cottages, houses, and condos. The guests can access kitchen amenities and other facilities that are a part of the rental property, such as a swimming pool or garden area.

Traditionally, vacation rentals are considered efficient alternatives to traditional accommodation facilities used by travelers, such as hotels. Rentals promote more privacy and provide travelers with higher control over the amenities accessible for use. The vacation rental industry has undergone tremendous changes in the last few years driven by the emergence of online portals facilitating bookings and payments. For instance, some of the popular websites offering details on vacation rentals include Vrbo, Airbnb, and Booking.com.

In addition, the launch of several new applications and software programs assisting in managing vacation rental properties has eased the booking process for property providers as well. During the forecast period, the growing number of travelers worldwide is expected to drive the market demand rate. In addition, the development of innovative rental properties offering one-of-a-kind experiences may generate more expansion possibilities for the market players.

Key Insights:

• As per the analysis shared by our research analyst, the global vacation rental market is estimated to grow annually at a CAGR of around 3.80% over the forecast period (2024-2032)
• In terms of revenue, the global vacation rental market size was valued at around USD 92.93 billion in 2023 and is projected to reach USD 129.99 billion by 2032.
• The vacation rental market is projected to grow at a significant rate due to the rising number of travelers worldwide.
• Based on accommodation type, the apartment segment is growing at a high rate and will continue to dominate the global market, as per industry projections.
• Based on booking channel, the online segment is anticipated to command the largest market share.
• Based on region, Europe is projected to dominate the global market during the forecast period.

Vacation Rental Market: Growth Drivers

Rising number of travelers worldwide to drive market demand rate

The global vacation rental market is expected to grow due to the growing number of travelers across the globe. According to market research, short-term and long-term traveling has gained wider popularity among people of all ages, especially the younger generation. People are actively saving their earnings with future plans to visit on travel either domestically or across international locations. This trend is driven by multiple factors.

For instance, the general population is registering a drastic change in the way of living and concepts that drive life choices. Latest reports indicate that the general population has shown keen interest in exploring new cultures, diverse food, perspectives, and environments. The increased interest in global culture is also a result of social media influence. Platforms such as YouTube, Instagram, and others have opened new channels for general awareness, inciting interest among viewers to visit new locations whenever possible.

Furthermore, increased disposable income and improved transportation infrastructure have escalated the number of travelers worldwide. In 2024, Maldives, a popular tourist destination, registered an increase of nearly 9% in terms of tourists compared to 2022. Additionally, domestic tourism is on the rise too as international traveling continues to remain unaffordable for a large part of the general population.

Increasing adoption of technology in the industry to properly market growth trends

The travel & tourism industry has been heavily influenced by the growing adoption of technological solutions that ease several aspects of travel planning and bookings.

For instance, the introduction of websites and applications providing information about available rental properties in a particular location, along with price comparison with other venues, has helped the global vacation rental market thrive in the last few years.

In October 2024, Airbnb, one of the world’s leading vacation rental companies, announced the launch of a new feature called the Co-Host Network. It is designed to assist homeowners in easily managing their properties by connecting with other more seasoned co-hosts in the same region. Vacation rental services providers can create a larger consumer base by partnering with other stakeholders, such as traveling booking websites and holiday planning platforms.

Vacation Rental Market: Restraints

Competition from traditional forms of stay-during travel to limit the industry’s expansion rate

The global industry for vacation rental is expected to be restricted due to the excessive competition from traditional forms of stay during travel. Hotels continue to enjoy popularity among the general population and a large number of travelers due to the several advantages offered by the hotel industry.

In addition, there has been a significant increase in the development of affordable hotel chains worldwide, offering extensive facilities, further strengthening customer loyalty. Vacation rentals may not be functional or cost-effective for individual travelers, further limiting the industry’s overall revenue.

Vacation Rental Market: Opportunities

Increasing support from governments to promote local tourism will create expansion possibilities

The global vacation rental market is expected to generate growth opportunities due to the growing support from regional governments to promote local tourism. According to market analysis, the global travel & tourism industry is a leading promoter of economic growth, which has encouraged more national leaders to create channels for improved investments.

For instance, in December 2024, Malaysia announced the extension of its visa exemption policy for Indian nationals until December 2026. Similarly, according to the latest reports, Russia is expected to announce visa-free travel for Indian nations in 2025. Europe, on the other hand, is aiming to promote a sustainable and green tourism industry, which could attract more investments in the coming years. In a recent event, Intesa Sanpaolo, a leading Italian banking group, announced signing the Designing a New Sustainable Tourism agreement.

Through the deal, the banking group will allot EUR 10 billion of new credit to promote sustainable developments in the hospitality sector. The company aims to encourage small & medium enterprises to leverage the growth opportunities provided by ministerial initiatives and the National Recovery and Resilience Plan.

Vacation Rental Market: Challenges

Concerns over safety and property damage to challenge market expansion

The global vacation rental industry is expected to be challenged by concerns over the safety of the guests. Hotels, for instance, are safeguarded by tight security and surveillance.

However, vacation rentals do not enjoy the same level of security since the traveling group solely manages the property during the time of stay. In addition, property owners run the risk of property damage if they permit high-risk guests.

Vacation Rental Market: Report Scope

Vacation Rental Market: Segmentation

The global vacation rental market is segmented based on accommodation type, price range, booking channel, and region.

Based on accommodation type, the global market segments are resorts/condominiums, apartments, tents, villas, houses, boats, yurts, and others. In 2023, the highest growth was listed in the apartments segment. The growing demand for fully furnished apartments among travelers, especially in urban areas, is driving the segmental revenue. In addition, tents and villas have also gained higher popularity in the last few years, driven by increased demand for more private spaces when traveling. By September 2024, Airbnb had generated a revenue of more than USD 10 billion since October 2023.

Based on price range, the global vacation rental industry is divided into luxury, mid-range, and economical.

Based on booking channel, the global market segments are offline and online. In 2023, the highest demand was listed in the online segment. The growing emergence of several new online portals offering end-to-end traveling solutions is driving the segmental demand rate. Additionally, increased use of smartphones, mobile applications, and faster internet connectivity are further impacting the final revenue in the industry. Bookign.com has facilitated more than 4.4 billion guests since its inception in 2010.

Vacation Rental Market: Regional Analysis

Europe to continue registering higher growth rate during the forecast period

The global vacation rental market will be dominated by Europe during the forecast period. It is one of the prominent regions with high demand for vacation rentals. Countries such as Spain, Portugal, Germany, France, the UK, and Italy are some of the leading contributors to the regional market. The growing rate of international tourism across European nations has created more demand for vacation rentals, especially in the form of apartments and houses.

In addition to this, Europe is witnessing an increased influx of business-related travel, which further promotes the use of rental properties as they are more cost-effective and offer excellent amenities, especially in case of longer stays. However, in recent times, European nations have started protesting against growing rent and lack of sufficient houses for permanent stay since a large portion of residential properties are made available as vacation rentals.

Asia-Pacific is one of the fastest-growing markets, with India, Japan, the Philippines, and others dominating the regional landscape. The growing adoption of technology-based solutions promoting travel and stay will aid growth in Asia-Pacific. Japan has recently gained extreme global attention, with millions of tourists visiting the scenically beautiful country every year to enjoy the nation’s rich culture and heritage.

Vacation Rental Market: Competitive Analysis

The global vacation rental market is led by players like:

• Agoda
• Airbnb
• TurnKey Vacation Rentals
• Luxury Retreats
• Vrbo (Vacation Rentals by Owner)
• HomeAway
• Booking.com
• Cottage Rentals
• TripAdvisor Rentals
• Plum Guide
• Expedia
• Vacasa
• OneFineStay
• Sonder
• Tripping.com

The global vacation rental market is segmented as follows:

By Accommodation Type

• Resorts/Condominiums
• Apartments
• Tents
• Villas
• Houses
• Boats
• Yurts
• Others

By Price Range

• Luxury
• Mid-Range
• Economical

By Booking Channel

• Offline
• Online

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa