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Vacation Rental Products Market Size, Share, & Trends Analysis Report (2023 – 2030)
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Report Overview
The global vacation rental products market was valued at USD 6.2 billion in 2022 and is projected to expand at a CAGR of 8.2% from 2023 to 2030. The increasing adoption of vacation rental products by tourists is expected to drive the market growth over the forecast period. Vacation rental products have revolutionized the travel and tourism industry, offering tourists a more affordable, flexible, and personalized experience. This has led to the growing popularity of vacation rental products. The rising number of online travel agencies, online booking platforms, and travel search engines is further supporting the growth of this market.
Furthermore, the increasing number of mobile applications for vacation rental products is expected to drive the market growth. Vacation rental companies are leveraging mobile applications as a platform to offer users an enhanced experience. For instance, in October 2021, Airbnb launched a new mobile application to provide a more personalized experience to its customers. It allows users to explore their vacation rental options in the form of 360-degree virtual tours and provides additional features such as the ability to chat with hosts and book a stay.
Moreover, the increasing number of millennial travelers is expected to drive the demand for vacation rental products. According to the World Tourism Organization, millennials accounted for 27% of global tourists in 2019. They are more inclined towards exploring new places, experiencing diverse cultures, and seeking adventure. Furthermore, the rising number of women travelers is anticipated to drive the growth of the market. According to the United Nations World Tourism Organization, the number of female international tourists rose by 8% in 2019.
In addition, the availability of cost-effective vacation rental products is driving the market growth. Moreover, the increasing number of collaborations between vacation rental companies and travel and tourism companies is expected to further fuel market growth. For instance, in February 2021, HomeAway, a vacation rental platform, and Expedia Group, a travel and tourism company, announced a strategic partnership to offer customers more options for their travel needs.
Furthermore, the increasing investment in advertising and promotional activities is expected to drive the growth of this market. Online platforms such as Google and Facebook are providing vacation rental companies with an opportunity to reach a wide range of customers. Companies are investing in advertising and promotional activities to target potential customers. Moreover, the increasing number of mergers and acquisitions by major companies to increase their market share is expected to further support the growth of the market.
Product Insights
The vacation rental market is segmented into apartments, villas, hotel apartments, and cabins. Apartments accounted for the largest share of the market in 2020. The growth of the segment is attributed to the increasing availability of luxury apartments and the surge in the number of travelers preferring apartments over other lodging options. Furthermore, the availability of modern amenities and the provision of easy access to various tourist destinations are other factors contributing to the growth of the segment.
Villas are expected to register the fastest CAGR during the forecast period. The growth of the segment is attributed to the increasing availability of villas in multiple destinations, as well as the rising demand for luxury villas. Villas offer a more private and comfortable stay for travelers, as well as more space than other lodging options. Furthermore, the growing demand for rental villas for hosting family reunions and wedding ceremonies is expected to boost the growth of the segment.
Distribution Channel Insights
The offline segment accounted for the largest share of the vacation rental products market in 2022, with more than 53.4% share of the market. The offline segment includes hotel/resorts, vacation homes, and other rental services. The offline segment accounted for the largest share in the market due to the convenience of booking vacation rental products through conventional methods, such as travel agencies, hotels, and resorts.
The online segment is expected to grow at the highest CAGR of 14.7% during the forecast period. The growth of the online segment is attributed to the increasing penetration of the internet, which has enabled customers to access vacation rental products online through various platforms such as Airbnb, HomeAway, and others. In addition, due to the outbreak of COVID-19, the online segment has witnessed rapid growth as customers prefer to book vacation rentals online due to the convenience and safety. Furthermore, the increasing number of players in the online segment has further boosted the market growth.
Type Insights
The hotels and resorts segment is anticipated to hold the largest revenue share of the global vacation rental market in the year 2022. The advent of modern technology, such as mobile applications and websites, has made it easier for customers to book hotels and resorts anytime, anywhere. This has led to a surge in demand for hotels and resorts, as they provide great convenience, comfort, and a wide range of facilities and services. Furthermore, the availability of discounts, offers, and special packages through online booking portals has also propelled the demand for hotels and resorts.
The private vacation rental segment is projected to expand at the highest CAGR of 10.9% over the forecast period. The increasing adoption of private vacation rentals for leisure and business trips is a major factor driving the growth of the segment. Private vacation rentals provide travelers with a more personalized experience than traditional hotel accommodations. Furthermore, the availability of well-equipped private vacation rentals at competitive prices is also boosting the market growth.
Regional Insights
Europe dominated the market and accounted for the largest market share in 2020. The presence of a large number of vacation rental sites in the region is a major factor driving the growth of the market. For instance, in August 2020, TripAdvisor announced the launch of its Vacation Rentals Booking service in the U.K. and Ireland, the first step in its move towards providing a comprehensive vacation rental experience.
North America is expected to witness the second-fastest growth in the coming years. The rise in the number of travelers and the high demand for vacation rental services are driving the growth in the region. In addition, an increase in the number of online booking services, such as AirBnb and HomeAway, is further expected to drive the growth of the market. For instance, in August 2020, HomeAway launched HomeAway Plus, a new collection of high-quality vacation rental homes in the U.S.
Financial Projections
In this part of the 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 your vacation rental. Usually, these projections are drafted for a 5-year period.
Revenue Assumptions
The main source of revenues for a vacation rental business comes from rental fees, cleaning fees, security deposits, service fees, and other fees. Here you will find a list of possible additional sources of income such as online booking fees, late check-in fees, and pet fees.
Projecting Expenses
In this section, all the regular expenses related to keeping the vacation rental business running will be described. The list of operating expenses includes property taxes, insurance policies, utilities, advertising and marketing, maintenance and repairs, cleaning and housekeeping, legal and professional fees, and others.
Key companies & market share insights
Some of the major companies operating in the vacation 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 August 2022, Airbnb launched a new feature called ‘Vacation Mode’ to ensure that renters can easily find the best vacation rentals.
– In October 2022, Expedia Group launched ‘Vacation Rental Marketplace’ to provide travelers with a comprehensive range of vacation rentals.
– In November 2022, TripAdvisor launched ‘Vacation Rentals Plus’ to provide travelers with a wide selection of vacation rental options.
Some of the prominent players in the vacation rental market include:
– Airbnb
– Expedia Group
– TripAdvisor
– HomeAway
– Booking.com
– Wyndham Destinations
– RedAwning
– Vacasa
– Interhome
– Stayz
Global Vacation Rental Market Segmentation
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 vacation rental products market based on accommodation type, booking type, and region:
1. Accommodation Type Outlook (Revenue, USD Million, 2017 – 2030)
– Hotels & Resorts
– Vacation Homes
– Campsites
– Hostels
– Others
2. Booking Type 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
Frequently Asked Questions
[Q]: What are the key factors driving the Vacation Rental market?
[A]: The key factors driving the Vacation Rental market include increasing disposable incomes, the emergence of digital platforms, rising popularity of short-term rentals, and the availability of a vast variety of options. The increasing disposable incomes have enabled people to spend more on leisure activities such as vacations, leading to an increase in the demand for vacation rental properties. The emergence of digital platforms such as Airbnb, HomeAway, and VRBO has made it easier for consumers to find and book vacation rental properties. The rising popularity of short-term rentals has further encouraged people to stay in vacation rental properties instead of hotels. The availability of a wide range of options such as villas, apartments, beach houses, and cabins has further augmented the demand for vacation rental properties.
[Q]: What are the key trends impacting the Vacation Rental market?
[A]: The key trends impacting the Vacation Rental market include the rise of the sharing economy, the growing demand for luxury rental properties, the increasing popularity of eco-friendly vacation rentals, and the emergence of new technologies and services. The rise of the sharing economy has enabled people to rent out their vacation homes to others, leading to an increase in the supply of vacation rental properties. The growing demand for luxury rental properties such as villas and beach houses has also driven the growth of the Vacation Rental market. The increasing popularity of eco-friendly vacation rentals has further contributed to the growth of the market. The emergence of new technologies and services such as virtual reality tours and online booking systems has further augmented the demand for vacation rental properties.
[Q]: Who are the leading players in the Vacation Rental market?
[A]: The leading players in the Vacation Rental market include Airbnb, HomeAway, Wyndham Vacation Rentals, Wyndham Destinations, Interval International, and Marriott Vacations Worldwide Corporation.
[Q]: What are the major regions contributing to the growth of the Vacation Rental market?
[A]: The major regions contributing to the growth of the Vacation Rental market include North America, Europe, Asia Pacific, Middle East & Africa, and Latin America. North America is expected to dominate the Vacation Rental market, owing to the presence of leading players such as Airbnb and HomeAway, coupled with the increasing disposable incomes of the population in this region. Europe is expected to be the second-largest Vacation Rental market, followed by Asia Pacific, Middle East & Africa, and Latin America.
Research Methodology
Impact Analytix employs a comprehensive and iterative research methodology focused on minimizing deviance in order to provide the most accurate estimates and forecasts possible. The company utilizes a combination of bottom-up and top-down approaches for segmenting and estimating quantitative aspects of the market. In Addition, a recurring theme prevalent across all our research reports is data triangulation which looks market from three different perspectives. Critical elements of the methodology employed for all our studies include:
Preliminary data mining
Raw market data is obtained and collated on a broad front. Data is continuously filtered to ensure that only validated and authenticated sources are considered. In addition, data is also mined from a host of reports in our repository, as well as a number of reputed paid databases. For a comprehensive understanding of the market, it is essential to understand the complete value chain and in order to facilitate this; we collect data from raw material suppliers, distributors as well as buyers.
Technical issues and trends are obtained from surveys, technical symposia, and trade journals. Technical data is also gathered from an intellectual property perspective, focusing on white space and freedom of movement. Industry dynamics with respect to drivers, restraints, and pricing trends are also gathered. As a result, the material developed contains a wide range of original data that is then further cross-validated and authenticated with published sources.
Statistical model
Our market estimates and forecasts are derived through simulation models. A unique model is created and customized for each study. Gathered information for market dynamics, technology landscape, application development, and pricing trends are fed into the model and analyzed simultaneously. These factors are studied on a comparative basis, and their impact over the forecast period is quantified with the help of correlation, regression, and time series analysis. Market forecasting is performed via a combination of economic tools, technological analysis, industry experience, and domain expertise.
Econometric models are generally used for short-term forecasting, while technological market models are used for long-term forecasting. These are based on an amalgamation of the technology landscape, regulatory frameworks, economic outlook, and business principles. A bottom-up approach to market estimation is preferred, with key regional markets analyzed as separate entities and integration of data to obtain global estimates. This is critical for a deep understanding of the industry as well as ensuring minimal errors. Some of the parameters considered for forecasting include:
Market drivers and restraints, along with their current and expected impact
Raw material scenario and supply v/s price trends
Regulatory scenario and expected developments
Current capacity and expected capacity additions up to 2030
We assign weights to these parameters and quantify their market impact using weighted average analysis, to derive an expected market growth rate.
Primary validation
This is the final step in estimating and forecasting our reports. Exhaustive primary interviews are conducted, face to face as well as over the phone to validate our findings and assumptions used to obtain them. Interviewees are approached from leading companies across the value chain including suppliers, technology providers, domain experts, and buyers so as to ensure a holistic and unbiased picture of the market. These interviews are conducted across the globe, with language barriers overcome with the aid of local staff and interpreters. Primary interviews not only help in data validation but also provide critical insights into the market, current business scenario, and future expectations and enhance the quality of our reports. All our estimates and forecast are verified through exhaustive primary research with Key Industry Participants (KIPs) which typically include:
Market-leading companies
Raw material suppliers
Product distributors
Buyers
The key objectives of primary research are as follows:
To validate our data in terms of accuracy and acceptability
To gain an insight into the current market and future expectations
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