The global alternative accommodation products market is expected to reach USD 81.4 billion by 2027, registering a CAGR of 8.3% over the forecast period. Alternative accommodation products refers to services that offer accommodation through the internet or any other platform. This includes services such as vacation rentals, home stays, apartments, and other accommodations. The increasing inclination of travelers towards alternative accommodation products is expected to drive the growth of the market.

The increasing penetration of the internet and the growing popularity of smartphones are expected to boost the demand for alternative accommodation products. The surging popularity of social media and the growing number of online reviews are further fuelling the growth of the market. Consumers are increasingly relying on user reviews to make informed decisions about the quality of services offered. In addition, the increasing demand for online travel agencies is expected to provide further impetus to the market.

The expansive growth of the sharing economy is also expected to influence the market. The sharing economy is a business model that allows consumers to access goods and services from other consumers. This business model has significantly impacted the alternative accommodation products market as it facilitates the exchange of accommodation services between travelers. Moreover, the introduction of modern technologies such as blockchain and artificial intelligence is expected to further drive the growth of the market.

The increasing trend of eco-tourism is also expected to drive the growth of the market. Eco-tourism is a form of tourism that focuses on exploring and protecting the environment. Travelers are increasingly opting for eco-friendly accommodations, leading to the growth of the market. Furthermore, the growing popularity of low-cost airlines is expected to drive the market growth as travelers are increasingly opting for shorter trips, resulting in the need for alternative accommodation products.

In addition, the rising trend of experiential travel is further propelling the growth of the market. Experiential travel is a type of travel that focuses on authentic experiences and interactions with local cultures. It includes activities such as sightseeing, adventure activities, and cultural exploration. This is expected to drive the demand for alternative accommodation products as travelers seek out unique and interesting experiences.

The homestay segment held the largest market share of around 40.5% in 2022. Increasing demand for cost-efficient and comfortable alternative accommodation options, especially from digital-savvy millennials, is driving the growth of the homestay market. According to an article published by the Harvard Business Review in October 2018, millennials are more likely to book alternative accommodation such as homestays than traditional hotels. Furthermore, growing trends of personalized experiences and rising popularity of budget-traveling are boosting the demand for homestays across the globe.

The vacation rental segment is expected to expand at the fastest CAGR of 8.4% over the forecast period. Growing demand for vacation rentals from travelers looking for a comfortable, home-like experience is propelling the market growth. According to an article published by the Global Business Insights in 2019, vacation rentals offer more privacy and flexibility compared to hotels and motels, thus making them an attractive option for travelers. In addition, the increasing penetration of the internet and rising trends of digitalization are bolstering the growth of the market.

In 2022, the alternative accommodation products market is anticipated to be worth over USD 5.9 billion. The market is expected to grow at a CAGR of 5.8% over the forecast period. The growth of the market is mainly driven by the increasing number of tourists, who are preferring to stay in alternative accommodation instead of conventional hotels. The increasing trend of travelling has also helped in the growth of the market. The key distribution channels that are driving the market are online, offline, and direct sales.

The online segment is expected to dominate the market and is expected to grow at the highest CAGR of 11.5% over the forecast period. The growth of the online segment is mainly due to the increasing penetration of internet and smartphones in the global population. The growth of the online segment is also supported by the increasing trend of e-commerce, which is a major mode of purchase for the customers.

The offline segment is expected to grow at a slower rate and is expected to be worth over USD 2.6 billion by 2022. The growth of the offline segment is mainly due to the increasing preference of customers for offline channels. The key distribution channels that are supporting the growth of the offline segment are retail stores, direct sales, and partnerships.

The alternative accommodation products market is projected to grow at a CAGR of 7.5% from 2019 to 2024. The increasing demand for green and eco-friendly accommodation is fuelling the market growth. For instance, the growing popularity of Airbnb and HomeAway has created an opportunity for the alternative accommodation products market. Furthermore, the increasing trend of women working outside the home is contributing to the growth of the market. Moreover, increasing urbanization, rising disposable income, and growing interest of people in exploring new places and cultures are also supporting the growth of the market.

The traditional alternative accommodation product segment accounted for the largest share of the market in 2018. Traditional alternative accommodation products such as Airbnb, HomeAway, and FlipKey are gaining popularity due to their easy availability and low cost. Furthermore, the increasing trend of women working outside the home is driving the demand for traditional alternative accommodation products. Moreover, the growing popularity of Airbnb and HomeAway is also contributing to the growth of the market.

Europe dominated the market and accounted for the largest revenue share of over 37.2% in 2022. The presence of major players such as Airbnb and VRBO in the region and the increasing popularity of home-sharing services are some of the key factors driving the growth of the Alternation Accommodation market in the region. Over the past years, the sharing economy has grown significantly in the region, with major players such as Airbnb, HomeAway, and VRBO providing an array of alternative accommodation services.

Asia Pacific is expected to witness the fastest growth over the forecast period. Growing tourism in the region and increasing disposable income are some of the major factors driving the growth of the market in the region. Furthermore, the increasing trend of solo travelers and the presence of major players such as Airbnb and Oyo Rooms are expected to further fuel the growth of the market in the region. For instance, in November 2021, Airbnb launched a program called “Live Anywhere” in Asia Pacific to make it easier for people to live and work remotely in cities across the region.

In this part of the alternative accommodation products business plan we will provide a detailed breakdown of all income and expense categories of the business. These forecasts include cash flow projections and capital requirements for your alternative accommodation business. Usually, these projections are drafted for a 5-year period.

Revenue Assumptions

The main source of revenues for an alternative accommodation products business comes from bed and breakfast, vacation rentals, and home-sharing services. Here you will find a list with a description of each of them and other possible sources of profit such as membership fees, advertising, and other upsell services.

Projecting Expenses

In this section, all the regular expenses related to keeping the alternative accommodation products business running will be described. The list of operating expenses includes marketing, salaries, taxes, utilities, insurance, upgrades, maintenance and repairs, and others.

Some of the major companies operating in the alternative accommodation market are increasingly focusing on product launches and expansion of the distribution channel to gain prominent visibility among consumers. Some of the initiatives are:

– In June 2022, Airbnb announced the launch of its new product line, Airbnb Plus, which is a collection of high-end homes managed by professional hosts.

– In October 2022, Booking.com launched its own private accommodation collection to make it easier for travelers to find their ideal home away from home.

– In November 2022, Expedia Group launched its own alternative accommodation collection that offers a wide selection of unique and boutique-style homes.

Some of the prominent players in the alternative accommodation market include:

– Airbnb
– Booking.com
– Expedia Group
– HomeAway
– TripAdvisor
– Vrbo
– Hostelworld
– Oyo
– Travelocity
– Trip.com

This report forecasts growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global alternative accommodation products market based on product, distribution channel, type, and region:

1. Product Outlook (Revenue, USD Million, 2017 – 2030)

– Hotels
– Vacation Rentals
– Hostels
– Others

2. Distribution Channel Outlook (Revenue, USD Million, 2017 – 2030)

– Online
– Offline
– Others

3. Type Outlook (Revenue, USD Million, 2017 – 2030)

– Business
– Leisure

4. Regional Outlook (Revenue, USD Million, 2017 – 2030)

– North America
– Europe
– Asia Pacific
– Central & South America
– Middle East & Africa

[Q]: What are the Key Drivers of the Alternative Accommodation Products Market?
[A]: The alternative accommodation products market is driven by the increasing preference for short-term rental accommodations among travelers, the growth of online travel agencies, the increasing use of mobile applications, and the availability of extensive accommodation options. Additionally, the growing demand for budget-friendly and innovative alternative accommodation products is further driving the market.

[Q]: Who are the Key Players in the Alternative Accommodation Products Market?
[A]: Major players in the alternative accommodation products market include Airbnb, Inc., Booking Holdings Inc., HomeAway, Inc., Marriott International, Inc., Hyatt Hotels Corporation, and Expedia Group.

[Q]: What is the Potential for Growth in the Asia-Pacific Region?
[A]: The Asia-Pacific region is one of the fastest-growing regions for the alternative accommodation products market, due to the large population base, growing disposable income, and increasing number of travelers. The region is expected to offer lucrative growth opportunities in the upcoming years.

[Q]: What are the Key Trends in the Alternative Accommodation Products Market?
[A]: Some of the key trends in the alternative accommodation products market include the increasing focus on customer experience, the increasing use of technology and AI, and the rise of boutique hotels. Additionally, the adoption of virtual reality technology and the increasing demand for eco-friendly accommodations are expected to create favorable opportunities for market growth.

[Q]: What are the Challenges Faced by the Alternative Accommodation Products Market?
[A]: Some of the key challenges faced by the alternative accommodation products market include the lack of standardization and regulations, high commission rates, and the lack of trust from customers. Additionally, the increasing competition from OTAs and other players is expected to hinder the market’s growth.