The alternative accommodation market is anticipated to flourish at a steady CAGR of 14.7% between 2023 and 2033. The market is expected to hold a market share of USD 627.8 billion by 2033, while it is likely to reach a value of USD 159.3 billion in 2023.
The technological advancement in the traveling sector and increasing inclination towards exploring newer places and affordable flights play the most vital role in driving the market growth in the forecast period.
| Attributes | Details |
|---|---|
| Market CAGR (2023 to 2033) | 14.7% |
| Market Size (2023) | USD 159.3 billion |
| Market Size (2033) | USD 627.8 billion |
Alternative accommodation consists of all available types outside the formal or organized accommodation sector. Any form of accommodation differs from that generally accepted as tourist accommodation as an alternative.
Alternative accommodation is also considered sustainable because it does not need a concentration of resources or infrastructure and can have alternative uses if tourism does not continue to be a key activity.
Types of accommodation can be separated into two categories: catered and not. Catered accommodation provides the tourist with food. The food may or may not be included in the price of the hotel. Catering comes in different shapes, sizes, and in different amounts. There are different types of accommodation like hotels, apartments, hostels, guesthouses, villas, holiday homes, and resorts. This accommodation has a different budget, where one can choose the accommodation according to their choice and budget.
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Increasing the Spending Power of the Consumer to Boost the Growth of the Market
The tourism industry has created significant potential for the growth of the alternative accommodation market. People travel for different reasons like holidays, leisure, and business. Alternative accommodation can be selected based on choice, budget, and destination. This has created a huge demand for alternative accommodations.
Increasing use of the Internet and ease of booking provides lucrative opportunities for the growth of the market. Increasing awareness about travel management software among end-users is expected to propel the growth of the market. Increasing spending power and availability of budget travel options boost the growth of the market.
Travel agencies across the globe are launching quick, mobile-friendly websites that are simple to use on smartphones. These services provide peer evaluations and 360-degree videos of accommodation places with straightforward pricing comparisons. This helps tourists understand the travel location, benefits, and places they want to visit.
Also, the growing adoption of mobile devices in recent years and the rising adoption of end-to-end expense and travel management solutions help in online vacation planning, which augments the growth of the market.
Principal Consultant
Although the market has numerous end-uses, some obstacles likely pose a challenge to market growth during the forecasting period. Day by day, growing geopolitical tensions between the countries, increased waste, pollution, and emissions, coupled with constantly evolving consumer expectations regarding accommodation, are expected to impede the market's growth.
Fraud attacks on travel accommodation have increased with a continuous evolution in fraudulent techniques. Due to more convenience consumers using online payment getaways for booking, an increasing online banking fraud may hamper the market growth.
| Country | Revenue Share % (2022) |
|---|---|
| United States | 27.7% |
| Germany | 5.6% |
| Japan | 3.5% |
| Australia | 2.1% |
| North America | 33.6% |
| Europe | 21.5% |
| Country | CAGR % (2023 to 2033) |
|---|---|
| China | 17.8% |
| India | 18.4% |
| United Kingdom | 15.4% |
The Presence of Technologically Advanced Infrastructure in the Region Propels the Market Growth.
The North America alternative accommodation market is expected to accumulate a market share of 34.5% in 2021, and the trend is forecast to continue over the assessment period. On a geographic basis, North America is anticipated to be the leading market for alternative accommodation due to the increasing trend of accommodation across the region and rising expenditure on booking accommodation in homes and condominiums. Other factors boosting the growth of the market in the region are increasing expenditure, the high spending power of customers, increased popularity of outdoor designations, and technologically advanced infrastructure.
Furthermore, the presence of many market players in the region boosts the market's growth. The United States, Canada, and Mexico held a significant share in 2021 and are expected to maintain growth. For instance, in April 2022, Booking.com announced a new and improved flight-booking service in India, in time with the complete resumption of regular international flights in India. The in-house branded flight service may create a new way to book and experience air travel that’s convenient, intuitive, and ultimately more traveler-friendly.
The Presence of an Advanced Tourism System in the Region Provides Growth Avenues.
Europe is the second-leading contributor to the alternative accommodation industry, owing to technological advancements in cloud-based services in the region. In the forecasting period, Europe is expected to accumulate a significant market. Europe also offers potential growth opportunities in the alternative accommodation market due to various accommodations available such as lodging, including hotels, resorts, hostels, vacation rentals, and others.
Also, the presence of regional and international market players and massive investments in R&D across the country are expected to boost the market's growth in the region. The huge and technologically advanced tourism and hospitality industry has created significant potential for the growth of the travel accommodation market in Europe. Market players adopt strategies and offering schemes to expand the customer base.
For instance, easyJet has launched a new holiday business aimed at shaking up the sector with flexible, great-value holidays to handpicked hotels across Europe. The United Kingdom customers can book Europe's most loved hotels and any easyJet flight on one platform. This may help to reduce the seven hours holidaymakers spend on average searching for a holiday, according to research by the new holiday company.
Asia Pacific region is expected to show a higher market attractiveness index and is considered the most lucrative market. This region is expected to dominate the global alternative accommodation market in terms of revenue share and grow at a comparatively higher growth rate than other regions due to the increasing travel expenditure. Asia Pacific is expected to register the highest CAGR of 17.3% from 2022 to 2032.
Increasing government initiatives in countries like India, Indonesia, China, and Vietnam for growing tourism industry to generate income and new jobs. And increasing awareness about the availability of holiday rentals for tourists. The Asia Pacific is thus expected to witness strong growth in the future.
For instance, In June 2022-Agoda expanded its partnership with tourism authorities to feature 'Clean Certified Accommodations' in the Asia Pacific. This partnership may promote hygiene standards for all travelers.
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The Online/Platform-based Segment Accounts for a Substantial Market Share of the Alternative Accommodation Market
Based on booking mood, the market is segmented into online/platform based and offline. Among these, the online/platform-based segment is likely to account for the leading share of the global market during the forecast period.
The online segment dominated the market with a revenue share of over 84.5% in 2021 and is expected to register the highest CAGR from 2022 to 2032. The segment held a market share of 84.7 in 2022. The main factor driving the segment's growth is increasing mobile phone usage. Increasing Internet use has boosted hotel booking through online channels making it easy, simple, and convenient. Also, online channels provide features like easy payments, easy bookings, safer payment modes, and easy and free cancelation to attract more customers.
On the other hand, the offline segment accounts for a significant share of the alternative accommodation market. Many consumers still use offline booking mode due to the option of checking and reviewing the place before booking
Home Segment to Remain the Most Lucrative for Alternative Accommodation Market
FMI’s recent report on the alternative accommodation industry forecasts that the home segment held a leading market share of more than 28.8% in 2021 and is anticipated to witness significant growth during the forecast period. Homestays are in demand as they are cost-effective, efficient, easy, and safe. Also, due to the low cost and pet-friendly environment, travelers across the globe are inclined toward home-based vacation rentals may favor segmental growth.
While the apartment/ condominium segment accounts for a significant market share during the assessment period, and the segment is projected to register the highest CAGR of 16.8% from 2023 to 2033 As apartment/condominiums are among the most common and widely used alternative accommodations as millennials and business travelers across the globe are opting to stay in apartments or condominiums buildings due to the luxury amenities.
Manufacturers are adopting various marketing strategies such as new product launches, geographical expansion, mergers and acquisitions, partnerships, and collaboration to identify the interest of potential buyers and create a larger customer base. Some startup companies operating in alternative accommodation are Vacasa, Expedia, Orbitz, Travelocity, Priceline, Hotwire, book your own, holiday Me, and Oyo Rooms,
In September 2021- Microsoft Corp. and Oyo Hotels & Homes entered a multi-year strategic alliance to co-develop ‘next-generation’ travel and hospitality products and technologies. Oyo adopted Microsoft Azure as a ‘key enabler’ to drive cloud-based innovations, and the solutions were geared to benefit patrons who operate small and medium hotels and home storefronts.
Key players in the global alternative accommodation market are holidu.co.uk; Trivago; Airbnb, Inc.; Booking.com; VRBO (Expedia Group); MakeMyTrip Limited; Wyndham Destinations Inc.; HomeToGo; Peakah; Trip.com Group Limited; TripAdvisor, Inc among various others
Recent updates from the industry are:
In May 2022 - Online travel firm MakeMyTrip partnered with 15 banks, NBFCs, and fintech players, including HDFC Bank, IDFC Bank, Capital float, and Zest Money, for its 'book now pay later option while booking flights or hotels.
In October 2021 - MakeMyTrip Limited announced its partnership with Hopper to help travelers save money with personalized recommendations and flexible booking capabilities. Through this partnership, MakeMyTrip aims to enhance the flight booking experience by boosting its recently launched Price Lock feature. Moreover, Hopper's Price Freeze technology may power MakeMyTrip's Price Lock feature and enable customers to lock in flight fares for up to seven days while they are firming up their travel plans.
Key Players
The market is expected to flourish at a CAGR of 14.7% from 2023 to 2033.
The market is expected to reach a valuation of USD 59.3 million by 2023 end.
The market is estimated to reach a nearly USD 627.8 million valuation by 2033.
The rising tourism industry and the increased disposable income of consumers drive market growth.
China's market is expected to progress at a CAGR of 17.8% by 2033.
1. Executive Summary 2. Market Overview 3. Market Background 4. Global Market Analysis 2018 to 2022 and Forecast, 2023 to 2033 5. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Type 5.1. Homes 5.2. Apartments/Condominiums 5.3. Camping 5.4. Hostels 5.5. Others 6. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Booking Mode 6.1. Offline 6.2. Online/Platform-Based 7. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Region 7.1. North America 7.2. Latin America 7.3. Western Europe 7.4. Eastern Europe 7.5. South Asia and Pacific 7.6. East Asia 7.7. Middle East and Africa 8. North America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 9. Latin America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 10. Western Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 11. Eastern Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 12. South Asia and Pacific Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 13. East Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 14. Middle East and Africa Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 15. Key Countries Market Analysis 16. Market Structure Analysis 17. Competition Analysis 17.1. holidu.co.uk 17.2. Trivago 17.3. Airbnb, Inc. 17.4. Booking.com 17.5. VRBO (Expedia Group) 17.6. MakeMyTrip Limited 17.7. Wyndham Destinations Inc. 17.8. HomeToGo 17.9. Peakah 17.10. Trip.com Group Limited 17.11. TripAdvisor, Inc. 18. Assumptions & Acronyms Used 19. Research Methodology
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Alternative Accommodation Market
