by The vacation rental market provides travelers with an alternative lodging option compared to conventional hotels. Vacation rentals such as privately-owned apartments, holiday homes, villas and cabins offer travelers home-like comforts and amenities during their vacations. They come fully furnished with kitchens, living areas, and multiple bedrooms accommodating larger groups and families. This provides vacationers with increased flexibility, freedom and savings compared to hotels. The global vacation rental market enables travelers to experience a destination like a local would.
The global Vacation Rental Market is estimated to be valued at US$ 72588.74 Mn in 2023 and is expected to exhibit a CAGR of 9.5% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends driving growth in the vacation rental market size is the increased popularity of last-minute bookings. More travelers are opting for spontaneous vacations and last-minute deals. This has encouraged property owners and property managers to be more flexible with booking windows and cancellation policies. Vacation rental platforms have also strengthened their instant booking features to cater to this growing preference. The ease and instant gratification of last-minute vacation rentals has boosted its appeal, especially among millennials and families.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the vacation rental market is moderate. Startup costs associated with vacation rental property are relatively high. However, access to sites like Airbnb have lowered the entry barriers.
Bargaining power of buyers: The bargaining power of buyers is high due to the availability of several booking options. Buyers can negotiate for better prices and deals during off-peak seasons.
Bargaining power of suppliers: Property owners have moderate bargaining power in the market. However, platforms like Airbnb help connect property owners with global travelers, increasing their influence.
Threat of new substitutes: Substitutes include hotels, resorts, homestays, and hostels. However, the unique experience offered by vacation rentals makes them less vulnerable to new substitutes.
Competitive rivalry: The competition in the market is high owing to the presence of several global and regional players. Companies compete based on location, amenities, and prices to attract more customers.
Key Takeaways
The global vacation rental market is expected to witness high growth over the forecast period supported by rising tourism and income levels. The global Vacation Rental Market is estimated to be valued at US$ 72588.74 Mn in 2023 and is expected to exhibit a CAGR of 9.5% over the forecast period 2023 to 2030.
North America currently dominates the market owing to a large number of listings and high tourism. Changing travel patterns along with growing popularity of experiential travel are backing the region’s lead.
Europe follows North America in terms of market share. Countries like Spain, Italy, and Greece are major contributors to the European vacation rental market. Presence of rich culture and heritage coupled with well-developed rental infrastructure have boosted the European market.
Key players operating in the vacation rental market are A2 Milk Company, PROVILAC, Vedaaz Organics Pvt. Ltd., Vinamilk, and Freedom Foods Group. Companies are expanding their property listings, focusing on unique properties, and leveraging technology to enhance consumer service and experience. Upgrades in amenities and facilities along with strategic pricing are some of the key strategies adopted.
