Short-term Vacation Rental Market to Grow with a CAGR of 8.4% through 2029

Rising disposable incomes and changing travel preferences, with a shift towards unique and personalized experiences are factors driving the global Short-term Vacation Rental market in the forecast period.

According to TechSci Research report, “Short-term Vacation Rental Market - Global Industry Size, Share, Trends, Competition Forecast & Opportunities, 2029F”, the Global Short-term Vacation Rental Market stood at USD 110.2 Billion in 2023 and is anticipated to grow with a CAGR of 8.4% in the forecast period. 

The short-term vacation rental market has witnessed an unprecedented surge, largely fueled by technological advancements and the proliferation of online platforms. The advent of user-friendly websites and mobile applications has revolutionized the way travelers search for and book accommodations. Platforms like Airbnb, Booking.com, and Vrbo have become household names, providing property owners with easy-to-use interfaces to list their spaces and travelers with a wide array of options. The seamless integration of booking systems, secure payment gateways, and real-time availability updates has significantly contributed to the market's growth. The user-friendly interfaces and efficient communication channels have eliminated many traditional barriers, making it easier for property owners to enter the market and for travelers to find and book vacation rentals.

Shifting consumer preferences have played a pivotal role in the expansion of the short-term vacation rental market. Modern travelers increasingly seek unique, personalized, and immersive experiences, moving away from traditional hotel accommodations. Short-term vacation rentals offer a diverse range of options, from quaint cottages to luxurious villas, allowing travelers to tailor their stay according to their preferences and group size. Additionally, the desire for authentic and local experiences has driven travelers to opt for vacation rentals located in residential neighborhoods, providing a more genuine feel of the destination. This change in consumer behavior has led to a growing demand for short-term vacation rentals, fostering the market's continuous growth.

One of the primary challenges confronting the short-term vacation rental market is the dynamic and often uncertain regulatory landscape. Many cities and regions grapple with how to regulate and manage short-term rentals, leading to a lack of consistency in rules and restrictions. Local governments are increasingly implementing or amending regulations to address concerns related to zoning, safety, taxation, and neighborhood disturbances caused by short-term rentals. Property owners and rental platforms face the challenge of navigating complex and evolving regulatory environments, leading to compliance issues that can result in legal consequences, fines, or even the prohibition of short-term rentals in certain areas.

The inconsistency in regulations across different jurisdictions further complicates matters for property owners who may have properties in multiple locations. Compliance with varying rules and regulations becomes a time-consuming and resource-intensive task, hindering the seamless operation of short-term vacation rentals. Striking a balance between the interests of the local community, property owners, and travelers remains a significant challenge in the face of regulatory uncertainty.

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The global Short-term Vacation Rental market is segmented into accommodation type, booking mode, location and region.

Based on booking mode, the online segment is the fastest-growing segment in the global short-term vacation rental market, driven by the increasing use of digital platforms for booking accommodations. Platforms like Airbnb, Vrbo, and Booking.com have revolutionized the way travelers discover and book vacation rentals, offering extensive property listings, user-friendly interfaces, and convenient booking processes. The rise of these online platforms has made it easier for consumers to find, compare, and secure short-term rentals globally, contributing to a significant surge in market growth. Additionally, the online segment benefits from enhanced visibility, customer reviews, and competitive pricing, which attract both property owners and travelers. The convenience of online booking, combined with the ability to access a wide range of options and real-time availability, has solidified the dominance of the online segment in the short-term vacation rental market, reflecting its growing importance and appeal to modern travelers.

Major companies operating in global Short-term Vacation Rental market are:

• 9flats PTE. Limited
• Airbnb, Inc.
• Booking Holdings Inc.
• Expedia Group, Inc.
• MTCH AG (Hotelplan Group)
• MakeMyTrip (India) Private Limited
• Awaze A/S (NOVASOL)
• Oravel Stays Limited
• Tripadvisor LLC
• Wyndham Destinations Inc.

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“The short-term vacation rental market is witnessing a significant trend toward the integration of advanced technologies that enhance both the guest experience and operational efficiency for property owners. Technologies such as artificial intelligence (AI), machine learning, and data analytics are being utilized to personalize search results for travelers, improving the matching of properties with guest preferences. Chatbots and virtual assistants are becoming more prevalent, facilitating seamless communication between hosts and guests, providing instant responses to inquiries, and enhancing overall customer service. Smart home technologies are also playing a crucial role in the market's evolution. Property owners are increasingly incorporating features such as smart locks, thermostats, and security systems, offering guests enhanced security and control over their living environment. Additionally, the integration of contactless check-in/out processes and keyless entry systems has become a prominent trend, aligning with changing traveler preferences for a more streamlined and secure experience. Data-driven insights are empowering property owners and managers to make informed decisions regarding pricing, marketing strategies, and property management. The utilization of technology is not only enhancing the operational efficiency of short-term rentals but also contributing to a more personalized and convenient experience for guests.” said Mr. Karan Chechi, Research Director of TechSci Research, a research-based management consulting firm.

“Short-term Vacation Rental Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Accommodation Type (Home, Apartments, Resort/Condominium, Others), By Booking Mode (Online, Offline), By Location (Urban, Rural, Beach, Mountain, Others), By Region & Competition 2019-2029F", has evaluated the future growth potential of global Short-term Vacation Rental market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the global Short-term Vacation Rental market.

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