Short-term Vacation Rental Market

Short-term Vacation Rental Market Outlook for 2024 to 2034

The short-term vacation rental market is expected to expand at a CAGR of 10.80% through 2034. The market value is projected to increase from USD 1,35,258.3 million in 2024 to USD 3,77,191.2 million by 2034. The short-term vacation rental industry share was valued at USD 1,21,416.8 million in 2023.

Attribute	Detail
Short-term Vacation Rental Market Size, 2023	USD 1,21,416.8 million
Estimated Market Size, 2024	USD 1,35,258.3 million
Projected Market Size, 2034	USD 3,77,191.2 million
Value-based CAGR, 2024 to 2034	10.80%

The travel and tourism sector is undergoing a massive shift as consumers show an increased appetite for adventure, travel, and exploration activities.

The emerging pattern is contributing to the popularity of rental property for short stays, which permits travelers to book local stays for workcation, vacation, or even to experience digital nomad life. Increasing competition in the market is anticipated to boost innovation and lead to the growth of short-term vacation rentals.

Emerging Trends in Short-term Vacation Rental Market

• The hospitality industry is transforming as online platforms are contributing to the increasing popularity of vacation rentals. Distinct accommodations, from apartments to villas, are offering personalized experiences and raising competition for traditional hotels.
• Surging family and group travel is providing opportunities for leading players. Digital nomads and millennials demonstrate a strong appeal for these accommodations due to immersive travel experiences.
• Increasing concerns on the safety and security of these rental accommodation is impacting the service adoption rate. Hosts of these rentals are required to deal with regulatory issues and adhere to legal frameworks to ensure guests’ safety and security. For customer satisfaction, hosts are effectively monitoring quality standards to attract customers on-site.
• Key players are investing their resources in effective communication between guests and hosts. Constant follow-ups ensure customers repeat these services or recommend them to their knowns.

Historical Analysis of the Short-term Vacation Rental Market and Future Outlook

Attributes	Details
Historical Market Value (2019)	USD 83,840.20 million
Short-term Vacation Rental Market Value (2023)	USD 1,21,416.8 million
Historical CAGR (2019 to 2023)	9.70%

The short-term vacation rental market registered a CAGR of 9.70% from 2019 to 2023. The market reached USD 1,21,416.8 million in 2023 from USD 83,840.20 million in 2019. The expanding millennial demographic, along with the growing trend of vacation, travel, and lodging expenditure, is fueling market growth. Other key factors contributing to market growth are as follows:

• Availability of short-term vacation rentals at a comparatively lower price than hotels is contributing to its increased demand.
• Growing consumer knowledge about these services and offerings is also invigorating market growth.

Increasing safety concerns for travelers, especially females, is resulting in dedicated services by leading players to capture this market segment. For instance, in 2020, Golightly came into being. This platform provides holiday rentals and home-shares in a vetted community. The platform is run and offered only to female guests.

The market is expected to inflate from USD 1,35,258.3 million in 2024 to USD 3,77,191.2 million by 2034. The market is anticipated to expand at an impressive CAGR of 10.80% through the forecast period.

Historical CAGR (2019 to 2023)	9.70%
Forecasted CAGR (2024 to 2034)	10.80%

Country-wise Insights

Countries	CAGR (2024 to 2034)
United States	5.90%
Germany	9.20%
China	14.60%
India	15.70%
Australia	9.70%

Growing Demand for Distinct Vacation Options in the United States

In the United States, the short-term vacation rental market is set to register a CAGR of 5.90% through 2034. The top contributors to market growth are as follows:

• A growing number of travelers, particularly millennials, are seeking new ways to explore new places and acquire distinct experiences.
• Emerging trend of glamping is favoring the demand for short-term vacation rentals.

These trends, along with the rising discretionary incomes of these travelers, are propelling market growth.

Short-term Vacation Rentals Trending in Germany

The German short-term vacation rental market is anticipated to register a CAGR of 9.20% through 2034. Top factors propelling the demand for this type of accommodation are as follows:

• Growing popularity of short-term vacation rentals in the sharing economy. This is because customers are now demonstrating demand for affordable and immersive travel experiences.
• Cultural immersion and local experiences made possible by vacation rentals are boosting its attractiveness among potential customers.

Thriving Tourism Sector Driving Sales of Short-term Vacation Rentals in China

The short-term vacation rental market in China is anticipated to record a robust CAGR of 14.60% through 2034. The following factors complement the market’s growth:

• Booming tourism sector in the country is favoring the demand for short-term vacation rentals.
• Several consumers are spending a part of their income on travel and accommodations. Moreover, rising expenditure levels on leisure activities are fueling market expansion.

Growing Trend of Short-term Vacation Rentals Among Millennials and Digital Nomads in India

The demand for short-term vacation rentals in India is expected to experience a CAGR of 15.70% through 2034. The leading factors for the industry’s growth are as follows:

• Consumers are increasingly requesting personalized options while planning their vacation trips. This is anticipated to positively influence the short-term vacation rental industry.
• Millennials and digital nomads find these accommodations highly appealing. This is because short-term vacation rentals offer flexible and indulging experiences, suited to their requirements.
• Property owners are leveraging their unused space and properties by putting them up on rentals. These rentals allow owners to generate passive income.
• Availability of property management and rental services is also relieving property owners from engaging in hosting activities. This is making the process of providing rentals easy and convenient.

All these factors play a crucial role in helping the market in India advance. The market is expected to rise exponentially, with sufficient investments in the Indian economy.

Owners in Australia Monetizing their Property by Providing Short-term Vacation Rental Services

Short-term vacation rentals in Australia is significantly contributing to its tourism sector. Going forward, the country is anticipated to account for a CAGR of 9.70% through 2034. Top factors pushing the market’s growth are given below:

• Availability of these rentals at competitive pricing, with the provision of desirable amenities for a striking guest experience, is enhancing market share.
• Synergy of property owners and travelers, resulting in an affordable, flexible, and authentic vacation experience.

Category-wise Insights

Resorts Account for an Enormous Market Share

Top Accommodation Type	Resorts
Market Share (2024)	40.40%

As per the latest market projections, the resort segment is anticipated to acquire a market share of 40.40% in 2024. The growing appeal of mini vacations is increasing the attractiveness of rental resorts among travelers. Various advantages and convenient services offered by resorts attract a significant population for this type of accommodation. A few of the benefits include safer tourist spots, favorable social interactions, and planned activities and adventures.

Online Booking Acquires a Considerable Share in Short-term Vacation Rental Market

Top Booking Mode	Online
Market Share (2024)	59.40%

Online booking mode is anticipated to represent a dominant market share of 59.40% in 2024. The segment is expected to expand at a rapid pace, too, raising the market share by 2034. Consumers are opting for online channels to ease the process of booking rental properties.

Companies are optimizing their sites by using advanced technologies to provide a user-friendly experience. Technology enables streamlined booking and automation for maximum efficiency. As a result, property owners opt for online mediums to get bookings.

Top Strategies of Leading Companies Operating in the Short-term Vacation Rental Market

Key players in the market are aiming for a higher volume of customers by adopting various strategies like expansion into new verticals. Additionally, players are focusing on diversification of their services to expand their market share.

Market leaders are reaching new markets by listing their properties in new countries, cities, and regions. This strategy is being propelled by the rising popularity of short-term vacation rentals as an alternative to conventional hotels.

Industry participants are further acquiring smaller platforms, thus allowing them access to the latest properties and more customers. Acquisition strategy also helps expand the technological capabilities of companies.

Market players are also collaborating with hotels to provide their services to a wider customer base. Additionally, companies are investing in the latest technologies to enhance the booking experience of their customers. This consists of enhancing booking functionality, developing new mobile apps, and providing personalized recommendations.

Industry participants are curating experiences and packages to provide enhanced experiences to their customers. By doing so, they can enjoy a competitive advantage over other players.

New Developments Shaping the Short-term Vacation Rental Market

• In April 2023, Evolve showcased a seasonal analysis of the latest trends in vacation the rental sector during the winter of 2022-23. Insights and metrics offered by Evolve are valuable for owners of short-term rentals who want to maximize their property's performance.
• Zumper, a privately owned rental marketplace, in March 2023, advertised the launch of Vacations by Zumper. It is a focused site with vacation rental listings as part of its broader focus on the short-term rental market. This development showcases Zumper’s commitment to expand its presence in the short-term rental sector.
• In September 2022, Arrived Homes, which is a real-estate crowdfunded investment platform, announced that it is expanding into short-term vacation rentals. The platform is expected to facilitate investors to buy shares of single-family homes.

Leading Companies in the Short-term Vacation Rental Market

• 9flats.com PTE Ltd.
• Airbnb, Inc.
• Booking Holdings Inc.
• Expedia Group, Inc.
• Hotelplan Management AG
• MakeMyTrip Pvt. Ltd.
• NOVASOL A/S
• Oravel Stays Private Limited
• Tripadvisor, Inc.
• Wyndham Destinations, Inc.
• Others

Key Market Segments Covered in Short-term Vacation Rental Market Research

By Accommodation Type:

• Home
• Apartments
• Resorts
• Others

By Booking Mode:

• Online/Platform-based
• Offline

By Region:

• North America
• Latin America
• East Asia
• South Asia and the Pacific
• Western Europe
• Eastern Europe
• Middle East and Africa

Frequently Asked Questions

How Big is the Short-term Vacation Rental Market in 2024?

The short-term vacation rental market is estimated to be valued at USD 1,35,258.3 million in 2024.

What is the Growth Potential of Short-term Vacation Rentals over the Forecast Period?

The market is predicted to expand at a CAGR of 10.8% through 2034.

What is the Future Outlook of the Short-term Vacation Rental Market?

The short-term vacation rental market is anticipated to reach USD 3,77,191.2 million by 2034.

Which Country Offers High Growth Prospects for Short-term Vacation Rentals?

The market in India is predicted to provide high growth opportunities.

Which Accommodation Type Significantly Contributes to Market Growth?

The resorts segment acquires a leading share of the market.