Vacation Rental Market size was valued at USD 94.3 billion in 2024 and is projected to reach USD 147.4 billion by the end of 2037, rising at a CAGR of 3.5% during the forecast period, i.e., 2025-2037. In 2025, the industry size of vacation rental will be valued at USD 97.6 billion.
The global market is expected to rise owing to an increasing consumer shift towards customized experiences that feel like home while traveling. This is also where the concept of vacation rentals started gaining traction among travelers interested in unique and tailored stays. Companies in the market are observing increased demand from the regions that are promoting sustainable tourism. In August 2022, Bornholmske Feriehuse was acquired by Oravel Stays Private Limited. The acquisition has been aimed at expanding Oyo's presence within Europe to meet the rising demand for vacation rentals in Denmark. This development underlines the growing consolidation within the industry.
Governments are also increasingly supporting the vacation rental sector by introducing policies to enhance tourism infrastructure and diversify accommodation options. A notable development is England's announcement of new regulations for short-term rentals, set to take effect in the summer of 2024. These regulations will require property owners to obtain permission from local councils before converting their properties into short-term rentals and will establish a mandatory national registration scheme.
Growth Drivers
Challenges
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
3.5% |
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Base Year Market Size (2024) |
USD 94.3 billion |
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Forecast Year Market Size (2037) |
USD 147.4 billion |
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Regional Scope |
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Accommodation (Apartments, Homes, Resorts, and Others)
Homes segment is projected to hold over 49.5% vacation rental market share by the end of 2037. Homes offer flexibility and comfort to vacationers with much privacy, which is highly desirable compared to other modes of vacation rentals, especially for families and large groups. In March 2023, Zumper introduced Vacations by Zumper, which shows how companies invest in services to make managing home rentals easier. Moreover, extended stays and work-from-anywhere have the potential to continue boosting the demand for homes for leisure and work purposes.
Booking Mode (Offline and Online)
By the end of 2037, offline segment is expected to hold over 72% vacation rental market share. The offline mode continues to play an important role in regions with limited internet facilities or when travelers may want to opt for the traditional ways of making bookings. In May 2023, MakeMyTrip Pvt. Ltd. partnered with Microsoft to provide voice-assisted booking in various Indian languages, entailing the deep interaction of digital with offline services to make the booking processes reach a wide demography of consumers.
Our in-depth analysis of the vacation rental market includes the following segments:
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Accommodation |
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Booking Mode |
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Europe Market Analysis
Europe in vacation rental market is projected to account for around 42% revenue share by 2037. High focus on sustainable tourism and cultural heritage in Europe are some of the major drivers behind this dominance. On the other hand, the rise in the number of eco-conscious travelers has motivated more property owners towards green practices, thereby further fueling the vacation rental market growth. Additionally, several historical sites, cultural diversity, and an authenticity-seeking mindset among travelers make Europe a desirable destination. This strong appeal is likely to continue to keep Europe at the forefront of the global vacation rental industry.
Germany benefits from a robust infrastructure and cultural tourism appeal. In April 2023, Evolve introduced a seasonal analysis of vacation rental trends that would inform and support property owners through changing demands and make vacation rentals in Germany even more appealing to those coming for cultural experiences. These insights also provide property hosts with opportunities to shape their offerings and meet the growing number of travelers showing interest in local festivals and historical hotspots. Its strong infrastructure for public transportation further allows anyone who wishes to gain easy access to any region, thus turning vacation rentals into an attractive option when touring the country.
The vacation rental market in France is supported by its vast cultural attractions and evolving traveler preferences. France is turning into a popular vacation rental market due to its art, food, and landmarks for which it is well-known, and continues to receive millions of visitors every year. This factor helps companies diversify the different types of accommodations available to visitors and further cement their position within the vacation rental sector. In addition, promoting lesser-known regions, such as the countryside and small towns of France, helps extend the supply of vacation rentals beyond more traditionally popular destinations. Such strategic growth is key to keeping competition healthy in the vacation rental market.
North America Market Analysis
By 2037, North America vacation rental market is anticipated to account for around 28.5% share. North America is a prominent market, with major players like Airbnb and newcomers. In addition, favorable government policies encourage domestic tourism, which is likely to boost industry growth. The demand is further driven by the emphasis on experiences such as cabin stays, beach houses, and other alternative types of accommodations. Another catalyst in driving a positive outlook for the North America vacation rental sector is the trend for combining work with leisure travel.
The U.S. remains a significant vacation rental market, driven by an increasingly higher interest in unique and flexible accommodation options among domestic travelers. In January 2023, The Interhome Group partnered with Sol og Strand to extend the companies' service offerings into Denmark. Such a development illustrates how international collaborations are anticipated to drive growth in the U.S. market. Also, vacation rentals are flexible, serving the needs of families and digital nomads for more personalized experiences in trips. Regular investment in property management technology is further improving the customer experience, making the U.S. market more appealing to both renters and owners.
Canada vacation rental market is bolstered by a surge in outdoor and nature-based tourism, with many travelers opting for secluded cabins and homes to enjoy the vast natural landscapes of the country. In September 2022, Arrived Homes extended its platform through investments in short-term vacation rentals, developing unique properties, and contributing to the growth of the vacation rental sector in Canada. The popularity of national parks and lakeside communities remains a strong appeal to tourists who want to get away from the metropolis. Also, Canada focuses on sustainable tourism, for which more eco-friendly vacation rental properties are being developed, which in turn is one of the major reasons for vacation rental market growth.
The vacation rental market is highly competitive, comprising several well-established players and a plethora of emerging companies that compete for market shares. Leading companies like Airbnb, Booking.com, OYO Hotels & Homes, and Expedia have established companies in the sector that offer dynamic features. Each of these businesses brings a different value proposition to the table, from offering more property listings to value-added services that are digitally accessible in an attempt to make consumer experiences more enjoyable. Competition like this fuels only improvement, ensuring that for the traveler better services, wider accommodation choices, and enhanced booking flexibility are fostered.
The entry of new platforms offering different slices of experiences, such as eco-friendly stays or heritage homes, increases the level of competition in the market. In May 2024, Munich-based vacation rental firm Holidu acquired Clubrural in a move that furthered its reach into rural Spain and Portugal. With this strategic acquisition, the competition in the market further heats up, proving that strategic expansion is very important in gaining a competitive advantage. This is anticipated to place the company in a position to tap into increasing interest in rural tourism and authentic local experiences that grow in popularity among travelers. Acquisitions of this kind reflect the growth strategy by companies to meet the diverse preferences of a wide range of travelers and broader geographic reach.
Here are some leading players in the vacation rental market:
Author Credits: Parul Atri
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