The vacation rentals market is the subject of a new report by Allied Market Research which analyzed accommodation types, price points, booking types, locations, and end-user generations.
The analysis estimates that the global vacation rental market earned $91.2 billion in 2021 and would create $315.0 billion by 2031, with a compound annual growth rate (CAGR) of 12.4 per cent from 2022 to 2031. Key points from the report:
Primary factors influencing growth.
The global vacation rental market is expanding due to factors such as:
- The expansion of the travel industry
- Changes in consumer spending habits
- Travelers desire to explore and learn new things or take a break from their busy schedules
- Hyper-personalized hotel rooms
- Smart rooms
- Reality in-room experiences using artificial intelligence
Due to their enhanced convenience and flexibility, consumers today use digital channels for making online reservations, which will open up new prospects in the years to come. However, terrorist attacks and political upheaval will limit market expansion.
The impact of Covid-19.
Due to the stringent travel restrictions put in place by governments in many different countries, the Covid-19 pandemic harmed the global market for vacation rentals.
Compared to the global economic crisis in 2009, the tourism business faced losses from the pandemic in 2020 that was 11 times worse.
The residential segment will continue to lead during the forecast period.
Regarding lodging, the home segment accounted for more than half of the global market for vacation rentals in 2021. It is anticipated that it will continue to hold the top spot throughout the forecast period.
Large homes are frequently available in rural locations, which can be fantastic for families looking to escape the daily grind. In addition, several vacation rentals allow guests to bring their dogs. These elements drive the segment.
However, the sector for villas is anticipated to experience the highest CAGR of 14.4 per cent between 2022 and 2031. Private villas offer guests high levels of privacy, luxury, and security, and their increased control over their surroundings increases the segment.
The mid-range category will continue to hold the top position throughout the predicted period.
According to price point, the mid-range category accounted for more than two-fifths of the global market for vacation rentals in 2021. It is anticipated that it will continue to hold the top spot throughout the projection period.
Mid-range lodgings are an excellent choice for tourists who want to reduce their lodging expenses while still having a comfortable stay with facilities. Additionally, as the middle class has expanded, so has the demand for accommodations in this price range.
The luxury segment, however, is anticipated to see the highest CAGR of 13.1 per cent from 2022 to 2031 because of standard-of-life changes and increased tourism.
Additionally, the establishment of luxury villas on palm-tree fringed beaches has recently gained popularity. Influencers on social media have further accelerated the trend of staying in luxury hotels.
The Gen Z sector to maintain its dominating position during the predicted period.
Based on end-user generation, the Gen Z segment accounted for the largest share in 2021, contributing to around half of the global vacation rental market. It is projected to maintain its lead position during the forecast period.
A significant portion of online purchases are made by Gen Z, who are believed to have a $44 billion annual buying power. Keeping this generation in mind while developing websites offers the opportunity to increase sales and gives a business more credibility and exposure.
However, from 2022 to 2031, the Gen X category is anticipated to exhibit the highest CAGR of 14.4 per cent. Most of the places this generation travels to are domestic.
By 2031, Europe will continue to dominate.
Regarding revenue, Europe accounted for over one-third of the global market for vacation rentals in 2021. Moreover, it is expected to dominate the market throughout the forecast period.
Travel and tourism had strong growth in European nations due to improved air connectivity, more intraregional travel, an increase in accessible, affordable travel options, and increased use of digital platforms.
The fastest CAGR is anticipated in the Asia-Pacific area from 2022 to 2031, at 13.4 per cent. As a result, locations like the Indonesian islands, Mission Hills Volcanic Mineral Springs & Spa, and Yunnan’s Himalayan foothills are gaining huge potential.
This region’s expansion of mid-range lodgings is fueled by the rising middle-class population and the swift construction of road and rail infrastructure.
Leading Market Participants:
- MakeMyTrip Pvt. Ltd.
- Airbnb Inc.
- TripAdvisor Inc.
- Extra Holidays
- Expedia, Inc.
- Vrbo, Booking.com
- Hotels Combined
- Hotwire, Inc.
- Yatra Online Private Limited
Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises and medium and small businesses with unmatched quality “Market Research Reports” and “Business Intelligence Solutions.”
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