The global short-term vacation rental products market was valued at USD 109.5 billion in 2021 and is projected to expand at a CAGR of 13.2% from 2022 to 2030. The growth of the market can be attributed to the increasing preference for short-term vacation rentals due to their cost-effectiveness, flexibility, and convenience. Moreover, the rising number of tourists and travelers is boosting the demand for vacation rentals.

The increasing demand for smart and connected homes is also driving the growth of the market. A smart home is equipped with various sensors and devices to improve the lifestyle and safety of occupants. Smart homes offer various features such as home automation, energy management, security, and entertainment. Furthermore, the introduction of voice control and automation systems, such as Amazon Alexa, Google Home, and Apple HomeKit, has further improved the comfort of users.

The rising number of millennials and their growing disposable incomes is increasing the demand for short-term vacation rentals. Moreover, the increasing number of travel websites and mobile applications is encouraging the growth of the market. For instance, Airbnb, TripAdvisor, and HomeAway are some of the leading online travel sites for short-term vacation rentals. Additionally, the growing trend of sharing economy is further propelling the growth of the market.

The increasing adoption of digital payment methods is providing a major boost to the market. The growing awareness of digital payments and the rising penetration of smartphones have led to the increasing adoption of digital payment platforms. Furthermore, the increasing number of collaborations between payment providers and digital travel platforms is expected to create lucrative opportunities in the market.

Furthermore, the growing demand for sustainable tourism is propelling the growth of the market. Sustainable tourism involves minimizing the negative impacts of tourism while maximizing its beneficial effects. Vacation rental homes are increasingly being used as an alternative to hotel stays. Moreover, the increasing demand for eco-friendly accommodations is further boosting the market growth.

The vacation rental segment held the largest share of the market in 2022. The growing trend of short-term rentals is the primary factor driving the segment’s growth. According to an article published by Forbes, in January 2020, the short-term rental market was valued at an estimated $100 billion in 2019 and is expected to reach $169 billion by 2021. The growth of the segment is attributed to the increasing demand for convenient and cost-effective rental solutions. Moreover, the emergence of various online rental services and the rise in the number of vacationers has also been driving the market growth.

The homestay segment is expected to register the highest CAGR of 8.3% over the forecast period. Increasing demand for homestay services from leisure travelers and the emergence of different homestay platforms such as Airbnb and Homestay.com are driving the segment’s growth. According to an article published by Forbes, in January 2020, homestay rentals accounted for more than 50% of the total rental revenue in the U.S. in 2019. Furthermore, the growing preference for home-like living experiences among travelers has been driving the segment’s growth.

The online distribution channel accounted for the major share of over 54.3% of the global short-term rental market in 2022. The growth of the segment is mainly driven by the rising popularity of online platforms such as Airbnb, HomeAway, and VRBO, which provide customers with an easy way to search for and book short-term rental properties. According to a study by Statista in 2020, the number of Airbnb users in the US has grown from 26 million in 2016 to 40 million in 2020.

Offline distribution channels, such as travel agencies, physical stores, and direct sales, accounted for over 45.7% of the market in 2022. Offline distribution channels enable customers to view and select rental properties in person, as well as receive assistance from the sales staff in deciding which property is best suited to their needs. These channels have been popular among customers who prefer direct contact and have difficulty with digital channels. In addition, travel agencies provide customers with a wide range of options to choose from and offer discounts to their customers.

The market is segmented by type into Hotel, Motel, Bed & Breakfast, and Other. The hotel segment accounted for the largest revenue share of 65.2% in the year 2022. The increasing trend of short-term vacation rental and the growing demand for hotel services are the two major drivers of the hotel segment. The wide availability of hotel services, the growing number of hotel chains, and the increasing number of budget-friendly hotels are some of the key factors driving the segment. Furthermore, the growing popularity of mobile applications and websites to book hotels is also expected to drive the segment.

The motel and bed & breakfast segment is estimated to expand at the highest CAGR of 10.5% over the forecast period. The increasing demand for comfortable and cost-effective accommodation options is expected to drive the segment. Furthermore, the growing trend of staycations and the increasing number of budget-friendly motel services are likely to fuel the growth of the segment. Additionally, the increasing number of online travel portals and mobile applications are expected to provide ample opportunities for the segment in the forecasted period.

Europe accounted for the largest revenue share of over 27.2% in 2022. This is mainly attributed to the increasing number of tourists visiting the region due to the presence of a large number of tourist destinations, such as Paris and Rome. Furthermore, the growing demand for short-term vacation rental services has led to the emergence of several startups in the region, such as Homestay, which offers a wide range of vacation rental services.

North America is expected to witness the fastest growth in the coming years on account of the growing demand for travel and leisure activities. The increasing number of travelers opting for short-term vacation rentals due to the rising cost of hotel stays is one of the major factors driving the growth of the market in the region. For instance, in August 2022, Airbnb Inc. acquired HotelTonight, a short-term vacation rental services provider, in order to expand its presence in the North American market.

In this section of the short-term vacation rental 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 the short-term vacation rental business. Usually, these projections are drafted for a 5-year period.

Revenue Assumptions

The main source of revenues for a short-term rental business comes from rental fees, cleaning fees, security deposits, and other fees associated with the rental. Here you will find a list with a description of each of these along with other possible sources of profits such as commissions from travel agents, service fees, and the sale of travel insurance.

Projecting Expenses

In this section, all the regular expenses related to keeping the short-term rental business running will be described. The list of operating expenses includes maintenance and repairs, utilities, insurance policies, advertising, credit card processing fees, and other overhead costs associated with running the business.

Some of the key companies operating in the short-term rental 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 February 2022, Airbnb launched its Experiences platform, allowing users to book unique experiences such as cooking classes and guided tours in select cities.

– In April 2022, HomeAway acquired the Vacation Rental By Owner (VRBO) website, further expanding its presence in the vacation rental market.

– In June 2022, Expedia Group launched its HomeAway rental platform, which offers travelers access to more than 2 million rental properties in more than 190 countries.

Some of the prominent players in the short-term vacation rental market include:

– Airbnb, Inc.
– HomeAway, Inc.
– Expedia Group
– Wyndham Destinations, Inc.
– Booking Holdings, Inc.
– Vacasa LLC
– TripAdvisor, Inc.
– RedAwning, Inc.
– Viator, Inc.
– FlipKey, Inc.

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 short-term vacation rental products market based on property type, distribution channel, and region:

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

– Hotels & Resorts
– Vacation Homes
– Vacation Apartments
– Guest Houses
– Others

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

– Online
– Offline

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

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

[Q]: What is the Potential of Short-term Vacation Rental Products?
[A]: Short-term vacation rental products are in high demand due to their affordability, convenience and flexibility. These products offer travelers the opportunity to experience luxury accommodations and amenities while staying in a home away from home. This market is expected to grow rapidly in the coming years as more people are looking for short-term accommodation options. Additionally, the increasing number of online travel booking platforms is providing customers with greater access to these products, which is further propelling the growth of the market.

[Q]: Who are the Key Players in the Short-term Vacation Rental Products Market?
[A]: Major players in the market include Airbnb, HomeAway, Tripadvisor, Booking.com, Expedia, InterContinental Hotels Group, Marriott International, Wyndham Hotels & Resorts, and Hilton Worldwide.

[Q]: Which Region Offers the Largest Opportunity for Sales of Short-term Vacation Rental Products?
[A]: Europe is expected to be the largest region in terms of revenue contribution, with a market share of over 40% in 2020. This is largely due to the high demand for short-term rental properties in the region.

[Q]: What are the factors driving the short-term vacation rental products market?
[A]: Key factors driving the market include the rising demand for short-term accommodation, growing number of online travel booking platforms, increasing availability of short-term rental properties, and rising disposable incomes.

[Q]: What are the key trends in the short-term vacation rental products market?
[A]: Key trends in the market include the increasing use of virtual reality, introduction of new technologies such as artificial intelligence and machine learning, and increasing focus on sustainability and green initiatives.