Short-Term Rental Market size is estimated at USD 124.6 billion in 2024 and is expected to cross USD 477.9 billion by the end of 2037, expanding at more than 10.9% CAGR during the forecast period i.e., between 2025-2037. In 2025, the industry size of short-term rental is evaluated at USD 138.1 billion.
The primary growth driver of the short-term rental market is the increasing demand for diverse and personalized travel experiences. Travelers increasingly seek unique, home-like accommodations and local experiences that traditional hotels often cannot provide. Moreover, the proliferation of online booking platforms has made it easier for travelers to find and book short-term rentals and for hosts to list their properties. There is a growing preference for lodging away from home driving the short-term rental market. Short-term rentals offer a diverse array of property types from city apartments and suburban homes to unique stays. Travelers can immerse themselves in local neighborhoods and cultures, enhancing their overall experience.
The Consumer Price Index (CPI) which measures changes in the average prices paid by consumers for goods and services over time is a key indicator of inflation and can influence the short-term rental market. For instance, according to the U.S. Bureau of Labor Statistics, relative importance (percent of the CPI weight) was 1.338 as of December 2023 and the CPI for the current year is 189.209 (as of August 2024). Investors in short-term rentals may monitor CPI to gauge economic health and potential returns. A stable or low CPI might signal a favourable economic environment for investing in or managing short-term rentals.
Growth Drivers
Challenges
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
10.9% |
|
Base Year Market Size (2024) |
USD 124.6 billion |
|
Forecast Year Market Size (2037) |
USD 477.9 billion |
|
Regional Scope |
|
Booking Mode (Online/Platform-based, Offline)
Online/platform-based segment is projected to hold short-term rental market share of more than 65.5% by 2037. Online short-term rental platforms offer a variety of options from budget-friendly to premium stays aiding customers to make informed decisions in real time. The integration of AI and other digital technologies is also expected to drive the adoption of advanced online short-term rental booking platforms.
Nowadays, several online booking platforms offer a secure payment gateway, which increases their reliability and goodwill in the short-term rental market. In March 2020, the European Commission signed an agreement with Booking, Expedia Group, Airbnb, and Tripadvisor, four major online collaborative economy platforms, allowing Eurostat to compare guest nights spent in short-stay accommodations offered via online platforms starting in 2018. In 2023, 719 million guest nights were spent in accommodation booked via the four online platforms, compared to 597 million in 2022 and 364 million in 2021.
Accommodation Type (Home, Apartments, Resorts/Condominium)
In short-term rental market, home segment is anticipated to account for revenue share of around 46.5% by 2037. Convenience, comfort, security, and privacy are major factors promoting the demand for short-term rental homes. The increasing number of family travelers is expected to push the demand for short-term rental homes in the coming years. Short-term rental homes come with kitchens that further help save on dining expenses, leading to their high adoption rates.
Our in-depth analysis of the global market includes the following segments:
|
Accommodation Type |
|
|
Booking Mode |
|
North America Market Forecast
North America in short-term rental market is anticipated to hold more than 40.5% revenue share by 2037, owing to a rise in the number of travelers in the region. The emergence of start-up companies and the existence of established competitors are benefitting the market growth. For instance, PriceLabs is one of the popular cloud-based software solutions for vacation and short-term rentals.
The U.S. short-term rental market is estimated to be valued at USD 36.17 billion in 2025 and is expected to increase at a CAGR of 11.5% through 2037. The rise in social media influencers and travel bloggers in the U.S. is promoting short-term rental adoption. Experiences shared by these communities’ aid customers to make informed decisions and also promote the businesses of service providers owing to their positive reviews.
In Canada, particularly Vancouver, Toronto, and Montreal are major tourism hubs attracting visitors for leisure and business purposes, leading to high demand for short-term rental accommodations in the coming years. As per the analysis by Statistics Canada, short-term rentals play a vital role in driving the accommodation services subsector's growth in the country, the share revenues increased from 7% in 2017 to 15.2% by 2021.
APAC Market Statistics
By the end of 2037, Asia Pacific short-term rental market is likely to account for more than 30.5% share, owing to rising tourism activities in the region. India, China, Japan, South Korea, and Australia are some of the most profitable marketplaces in the region. The Australian Bureau of Statistics revealed that till July 2024, around 6, 58,970 short-term visitors arrived in the country, a rise of 5.4% compared to the past year.
In India, the demand for vacation rentals is foreseen to increase at a CAGR of 4.5% and reach USD 2.5 billion in 2025. The advancements in digital platforms and online booking systems are making traveling and renting easy for tourists in India. India’s rich cultural heritage, diverse landscapes, and popular tourist destinations such as Goa, Jaipur, and Kerala are attracting both domestic and international travelers, fuelling the use of online short-term rental platforms. For instance, the vacation rental user penetration rate is estimated to rise from 3.8% in 2024 to 5.4% by 2029 in India.
Key players in the short-term rental market are adopting strategies such as digital marketing, advanced software tools, partnerships, and flexible booking policies to attract a wider consumer base and stay competitive in the market. Leading companies are building a strong online presence through social media, targeted advertisements, and engaging content. They are also collaborating with local businesses for cross-promotions and offering discounts and exclusive experiences to attract more bookings.
Some of the key players include:
Author Credits: Abhishek Verma
Copyright © 2024 Research Nester. All Rights Reserved
FREE Sample Copy includes market overview, growth trends, statistical charts & tables, forecast estimates, and much more.
Have questions before ordering this report?