The global vacation rental market is predicted to witness substantial growth in coming years attributed to growth of the tourism sector across the globe. Vacation rentals are alternate lodging options, including chalets, short-term rental apartments, cabins, beach houses, villas, farm stays, private homes, and cottages. Visitors consider factors, such as budget and convenience, while choosing them.
Increasing number of travel companies offering customized offers to consumers is anticipated to propel market growth. Growing need for mid-year vacation among working population due to busy work schedules can stimulate market growth. Rising number of domestic and international travelers can increase the demand for rental properties. Corporate employees travelling abroad generally extend their stay and convert their business trips into vacation trips. This can increase the number of bookings, thereby positively influencing market growth in the coming years. Supportive initiatives by the government across the globe to promote tourism can spur market growth.
Rising competition due to increasing number of service providers can hamper market growth. Travel companies are offering heavy discounts to gain traction among consumers. Such discounts can have a negative impact on market revenue and growth in coming years.
Growing awareness among consumers to consider security and convenience above discounts on rent can drive the market in coming years. Regular updates on online vacation websites to make booking easy for consumers can impel market growth. For instance, Airbnb introduced real-time booking to prevent discrimination by hosts against their guests. Instant bookings leave hosts no time to discriminate their guests based on race, gender identity, national origin, and age. Such developments can improve user experience and create opportunities for the new entrants.
The market can be segmented on the basis of rental type and application. Based on rental type, the market can be categorized into monthly, weekly, and nightly. In terms of application, the market can be classified into private and commerce.
North America is estimated to witness fast growth in coming years owing to presence of major market players, such as Airbnb, TripAdvisor, and Expedia. These companies have their headquarters in United States, which, in turn, can augment regional market growth in coming years. For instance, Airbnb is likely to open its first South Bay office in downtown San Jose. In addition, the company will soon start designing their own houses for consumers. They would hire engineers, architects, industrial designers, and roboticists to execute their plan.
Europe is likely to emerge as one of the promising regions in the market owing to increasing number of tourists. Countries, such as Spain, Italy, United Kingdom, and France, are the top tourist destinations in the region. Growth of the tourism sector in the region can increase the demand for vacation rentals. Spain is likely to make maximum contribution to market revenue in coming years owing to increase in the demand for rental properties in the country. For instance, TripAdvisor awarded Spain to have best beaches in Europe. La Concha in northern Spain topped the list.
Asia Pacific is likely to emerge highly lucrative in coming years owing to growth of the tourism sector in developing countries, such as China, India, and Japan. India has many aesthetic tourist destinations and rental properties offering modern facilities to consumers. This, in turn, can gain traction among tourists across the globe, thereby boosting market revenue in coming years. Most travel companies are likely to add popular hotel chains in their list of rental properties. Companies do acknowledge popular hotel chains for their excellence in terms of hospitality and other factors. For instance, TripAdvisor announced three Indian hotel chains as the “Most Excellent” hotel chains across the globe. The list includes the Indian Hotels Company and Shangri-La Group.
Some of the leading companies operating in the vacation rental market are Airbnb, TripAdvisor, 9flats, Booking Holdings, and Expedia.
Research Support Specialist, USA