The Short-term Vacation Rental Market is expected to experience substantial growth from 2025 to 2035, driven by increasing acceptance of home-like, flexible accommodations by the traveling public.In contrast to traditional hotels, these rentals are anything from a serviced city apartment to a rural retreat and all promise unique lodgings beyond comparison.
As more and more individuals opt for both pleasure and business locations overseas than ever before, and along with it developments in booking platforms and mobile technology, the market has been kept healthy.
The market is projected to surpass USD 4,00,911.98 Million by 2035, growing at a CAGR of 10.4% during the forecast period.
Key Market Metrics
| Metric | Value |
|---|---|
| Market Size in 2025 | USD 1,49,059.03 Million |
| Projected Market Size in 2035 | USD 4,00,911.98 Million |
| CAGR (2025 to 2035) | 10.4% |
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In the short-term rental market, North America is a mature and dynamic region with its supply and demand. With the United States leading the pack on both counts. Popular tourist destinations, remote work flexibility, and a surging interest in experiential travel mean that more bookings are coming out of natural-driven demand.
In addition, people are now combining work with pleasure in 'hybrid travel'. As a result they require more flexible accommodation options and longer stays. Urban areas face regulatory challenges, but suburban and rural areas are rapidly developing. This provides hosts with additional income opportunities.
Short-term holiday rentals are a highly attractive market not only in Europe's major cities; they also account for part of the key economic revenues of countries like France, Spain, Italy, and the UK. Here the region provides a rich tapestry of destinations, ranging from ancient city centers to beautiful beaches. Cultural curiosity and demand for genuine local experiences continue to drive bookings, more notably amongst international visitors.
Some platforms are changing tactics willingly besides. Despite the glare of regulatory oversight in major cities, partnerships and compliance strategies are now the order of the day. Sustainability is on the rise, both as an issue for the environment and also on the short-term rental market itself. Eco-friendly lets attract quality clients who care about their natural environment.
The short-term holiday rental market in Asia-Pacific is expected to be the fastest-growing of any region, on the back of increasing tourism, rising middle-class earnings and greater penetration by the internet. In China, Japan, India, Thailand and Australia, for instance, online platforms to book rental accommodation are already showing signs of rapid adaption.
Travelers in this region are more inclined to look for personally tailored service solutions offering good value for money. Central authorities support tourism; meanwhile local and global platforms are promoting market development.
Regulatory Uncertainty and Zoning Restrictions
In many cities local governments impose different regulations on short-term renters, or zoning laws restrict them to certain areas. Some homeowners also face restrictions that may prevent them from renting rooms out for short periods of time.
Competition with Traditional Hospitality
Shopping centers and hotels, take your pick it can also help to educate other tenants about illegal subletting (in order to avoid foreclosure). And lastly, if you are worried that one option might result in the landlord penalizing all tenants then choose your tactic very carefully
Rising Popularity of Alternative Accommodations
More and more tourists need houses with 'personality' that resemble their own homes rather than stark hotel rooms. This change in tourist demand promotes greater development of short-term vacation rentals, particularly in popular destinations popular with travellers and places located far from office centers or industrial zones.
Technology-Driven Market Growth
The more appropriate use of AI-powered pricing algorithms, digital concierge services instead of wage earners doing it for themselves and automated property management solutions will both help to further expand the market for short-term vacation rentals as well as make these more convenient or user-friendly for owners guests.
Between 2020 and 2024, COVID-19 had rock the market, short-term downturns followed by a strong U-shaped recovery driven by domestic travel, remote work and other trends. With the spread of rental model on the market flexible for customer demand, and an emphasis on hygiene and safety standards.
From 2025 to 2035, the market will continue to expand digitally world through grandeous efforts of growth in Wi-Fi nomadism, seamless reservation experiences and integration home automation tech. Sustainability initiatives such as those for eco-friendly rentals and carbon offset programs will also shape the future landscape.
Market Shifts: A Comparative Analysis 2020 to 2024 vs. 2025 to 2035
| Market Shift | 2020 to 2024 Trends |
|---|---|
| Regulatory Landscape | Emerging regulations due to market growth |
| Market Demand | Rebound post-pandemic with increasing domestic travel |
| Industry Adoption | Increased reliance on online platforms |
| Supply Chain and Sourcing | Dependence on individual property owners |
| Market Competition | Competition with hotels and traditional rentals |
| Market Growth Drivers | Shift to experience-based travel |
| Sustainability and Energy Efficiency | Initial adoption of green initiatives |
| Integration of Digital Innovations | Digital check-in and keyless entry |
| Advancements in Product Design | Focus on safety and cleanliness |
| Market Shift | 2025 to 2035 Projections |
|---|---|
| Regulatory Landscape | Stricter compliance measures and potential tax implementations |
| Market Demand | Continued rise in global travelers and work-from-anywhere culture |
| Industry Adoption | Greater use of AI, automation, and blockchain -based bookings |
| Supply Chain and Sourcing | Professional property management and branded rental networks |
| Market Competition | Expansion of hybrid models blending hotel services with rentals |
| Market Growth Drivers | Smart technology adoption, eco-tourism, and flexible booking policies |
| Sustainability and Energy Efficiency | Widespread implementation of sustainable and energy-efficient rentals |
| Integration of Digital Innovations | AI-powered customer service, blockchain payments, and metaverse integration |
| Advancements in Product Design | Customizable, smart-equipped, and eco-friendly vacation homes |
The United States Short-term Vacation Rental Market is expanding, with robust growth as more domestic and international tourists seek alternative, flexible accommodation options. Travel agencies have also recently been formed to serve guests abandoned by their hotel chain partners due in part to overbookings from digital platforms such as Airbnb and Vrbo.
There is also longer-term travel demand, reflecting an increasing taste for remote work and flexibility in where people work and reside.
| Country | CAGR (2025 to 2035) |
|---|---|
| United States | 10.5% |
The United Kingdom’s Short-term Vacation Rental Market is expanding as more tourists and domestic travellers seek alternative cheap flexible accommodation. Cities and country towns alike are seeing higher occupancy rates, driven by such digital innovations as Airbnb, Vrbo and regulatory support. Sustainable-focused rentals are also being increasingly sought after by the market.
| Country | CAGR (2025 to 2035) |
|---|---|
| United Kingdom | 10.3% |
The European Union Short-term vacation rental market is booming thanks to the continent's strong inbound tourism. The desired destinations are changed to cities such as Paris, Barcelona or Rome and rural or nature-based short-term rental options start seeing stitchtion. Balanced approaches to housing affordability through evolving regulatory frameworks are vital.
| Country | CAGR (2025 to 2035) |
|---|---|
| European Union | 10.4% |
South Korea Short-term Vacation Rental Market is expanding as the country's booming tourism industry witness’s increased digital adoption in both marketing and logistics. Market prospects are improving as the government works to promote tourism by regulating lodging quality management. Unique cultural experiences and themed rentals are also enhancing market demand.
| Country | CAGR (2025 to 2035) |
|---|---|
| South Korea | 10.6% |
| Accommodation Type | Market Share (2025) |
|---|---|
| Apartments | 42.5% |
The short-term vacation rental market is enjoying rapid development behind the demand for flexibility and affordability from tourists among accommodation options. Accommodations type wrap up the market, including houses, apartments, resorts and other places to stay.
Apartments will take the lead, with a market share of 42.5% forecast by the end of 2025. People love short-term rental apartments not only because of the sharing economy and digital nomad trend, the tourist's city center living and comfortable aloft lifestyle, more it's spielkasinos at home and privacy.
Compared with hotels, apartments provide both a greater sense of privacy and room to stay. People can cook, rather than relying only on restaurants, which makes them ideal for both leisure and business travel.
Furthermore, a wave of new remote work and work-anywhere policy trends are driving strong demand for rental apartments in big cities or popular tourist destinations. Major rental platforms such as AirBnB, Vrbo, are currently developing their listings of apartments, allowing customers to choose from a wider selection. Smart home integration, touchless check-in, AI-driven pricing optimization tools have all contributed to making apartment even more appealing within the short-term rental market.
| Booking Mode | Market Share (2025) |
|---|---|
| Online/Platform-based | 76.3% |
By booking method, the short-stay vacation rental market is divided into online/platform-based reservation or off-line bookings. Online booking could account for 76.3% by 2025, which means that the industry is changing in favour of digitalization and platform-based booking convenience.
This is primarily due to online booking, which provides user-friendly mobile applications, AI-driven recommendations and real-time pricing algorithms that greatly enhance user experience. More and more travellers are going for online booking because it is convenient to compare listings of the same house type and confirmation is instant. Platforms like Airbnb, Expedia, and Vrbo provide detailed property insights, guest reviews and flexible cancellation policies that serve to further enhance its place in the market.
Moreover, the popularity of digital reservations is underscored by loyalty plans, preferential pricing and tailor-made offers via online travel agents (OTAs) and direct reservation sites. It is anticipated that AI-driven Chabot’s, secure online payments, and block chain validation will further enhance trust and transparency in this sector of the tourism industry.
Though off-line bookings still linger in such rural areas as mountainous Yichun, Hengyang and Baoqing County, the niche luxury segment of the market, internet penetration for short-term vacation rental platforms will be continually expanded by mobile-first consumer behaviour.
Short-term vacation rentals account for the fastest growing portion of the market. The need to travel flexibly and in a more personalized manner has driven this trend. Digital booking platforms and the trend toward remote working also led to the increase in short-term rentals market share.
Market Share Analysis by Company
| Company Name | Estimated Market Share (%) |
|---|---|
| Airbnb Inc. | 30-35% |
| Booking Holdings Inc. | 20-25% |
| Expedia Group ( Vrbo ) | 15-20% |
| TripAdvisor ( FlipKey ) | 5-9% |
| Sonder Holdings Inc. | 3-7% |
| Other Companies (combined) | 15-25% |
| Company Name | Key Offerings/Activities |
|---|---|
| Airbnb Inc. | In March 2024, introduced AI-powered trip planning. In January 2025, expanded its premium rental service, Airbnb Luxe. |
| Booking Holdings Inc. | In April 2024, launched a dynamic pricing tool for hosts. In February 2025, enhanced its loyalty program for short-term rental guests. |
| Expedia Group ( Vrbo ) | In May 2024, expanded Vrbo’s global listings. In March 2025, introduced insurance coverage for hosts and travelers. |
| TripAdvisor ( FlipKey ) | In June 2024, integrated AI-driven guest review analytics. In February 2025, expanded into emerging travel destinations. |
| Sonder Holdings Inc. | In August 2024, introduced flexible long-term stay options. In March 2025, launched a contactless check-in and smart-home system. |
Key Company Insights
Airbnb Inc. (30-35%)
Airbnb dominates the market with its extensive global network of hosts and continuous innovation in personalized guest experiences.
Booking Holdings Inc. (20-25%)
Booking.com leads in short-term vacation rentals by leveraging data-driven pricing strategies and a strong loyalty program.
Expedia Group (Vrbo) (15-20%)
Vrbo specializes in family-friendly rentals and vacation homes, offering strong host protections and seamless booking experiences.
TripAdvisor (FlipKey) (5-9%)
FlipKey focuses on guest-driven recommendations and AI-powered analytics to refine the vacation rental experience.
Sonder Holdings Inc. (37-%)
Sonder blends hospitality with short-term rentals, emphasizing high-end, tech-enabled stays in major urban locations.
Other Key Players (15-25% Combined)
The overall market size for Short-term Vacation Rental market was USD 1,49,059.03 Million in 2025.
The Short-term Vacation Rental market is expected to reach USD 4,00,911.98 Million in 2035.
The short-term vacation rental market will grow due to rising travel demand, remote work flexibility, cost-effective lodging, and increasing preference for unique, home-like stays over traditional hotels, supported by digital booking platforms.
The top 5 countries which drives the development of Short-term Vacation Rental market are USA, European Union, Japan, South Korea and UK.
Apartments demand supplier to command significant share over the assessment period.
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Short-term Vacation Rental Market
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