Vacation Rentals Market Size, Share & Industry Analysis, By Accommodation Type (Home, Apartment, Resort/Condominium, and Others) By Booking Channel (Offline and Online), By Price Point (Economy, Mid-Range, and Luxury), and Regional Forecast, 2025-2032

The global vacation rentals market size was valued at USD 174.84 billion in 2024. The market is projected to grow from USD 195.45 billion in 2025 to USD 396.93 billion by 2032, exhibiting a CAGR of 10.65% during the forecast period. Europe dominated the vacation rentals market with a market share of 89.47% in 2024.

The global market is experiencing significant growth, driven by the growing international travel market and increasing traveler demand for personalized and flexible accommodations. For instance, according to the World Travel & Tourism Council (WTTO), in 2024, domestic visitor spending reached USD 5.3 trillion, growing by 5.4%. Meanwhile, international tourists increased by 11.6% annually, totaling USD 1.9 trillion compared to 2023. Platforms such as Airbnb and Vrbo have revolutionized the industry, making it easier for property owners to connect with global travelers.

Key players in the market include Airbnb, Vrbo, Booking.com, and Tripadvisor. These players strive for brand visibility by building strong websites and social media presence establishing partnership with property owners.

Post-pandemic travel resurgence and remote work trends have further fueled the interest in short-term rental properties. Travelers prefer vacation homes for their privacy, cost-effectiveness, and unique local experiences. Urban destinations and scenic getaways remain top choices. The user penetration rate in the markets is foreseen to increase, reflecting a broader adoption of vacation homes as a travel accommodation choice. However, the market faces regulatory challenges and rising competition. Technology, including dynamic pricing and contactless check-ins, continues to enhance guest experiences and streamline operations, making the vacation rentals industry a strong competitor to traditional hotels.

MARKET DYNAMICS

MARKET DRIVERS

Rising Remote Work Trend to Drive Market Growth

The rise of remote work has significantly fueled the growth of the market. As more professionals gain the flexibility to work from anywhere, demand for short-term rentals in scenic or culturally rich locations has surged. Travelers are now blending work and leisure, i.e., staying longer in destinations and choosing homes over hotels for comfort and productivity. The growing "work-from-anywhere" lifestyle has led to an increase in the number of short-term rentals.  This trend has led property owners to list their spaces on platforms, including Airbnb and Vrbo, thereby expanding short-term rental listings inventories globally. Moreover, destinations that once thrived solely on tourism are now attracting digital nomads, creating year-round demand. Remote work has thus reshaped travel habits, turning vacation rentals into long-term lifestyle choices and supplementing market growth.

MARKET RESTRAINTS

Traditional Hotels Competing with Vacation Rentals to Hinder Market Expansion

The excessive competition from traditional forms of stay during travel primarily limits the vacation rentals market growth. Established hotel brands offer consistent service standards, amenities, and security, which appeals to travelers seeking predictability. This brand assurance can deter some customers from choosing less-regulated holiday rental homes, which can vary widely in quality. Moreover, major hotel chains invest heavily in loyalty programs that reward repeat customers with points, upgrades, and discounts. These programs encourage customer retention and make it harder for holiday rentals to lure frequent travelers. In addition, hotels often occupy premium real estate in city centers, business districts, and tourist hotspots. Their strategic locations provide easy access to key attractions and transportation, giving them an edge over holiday rentals, which may be more dispersed.

MARKET OPPORTUNITIES

Growing Support from Governments to Promote Local Tourism to Generate Numerous Growth Opportunities

The holiday rental market’s growth is anticipated to be promising, as governments of several countries are undertaking tourism promotion projects. Many governments are launching campaigns, offering subsidies, and improving infrastructure to boost domestic travel. These initiatives encourage travelers to explore lesser-known destinations, increasing the demand for alternative accommodations such as retreat rentals. Additionally, policies supporting small and local businesses help hosts and property owners participate in the tourism economy. As local tourism gains momentum, vacation homes become an attractive option for travelers seeking affordable, flexible, and home-alike stays, thereby creating market growth opportunities for service providers and property managers.

VACATION RENTALS MARKET TRENDS

Rise of Experiential Stays and Themed Rentals

The growing demand for experiential stays and themed accommodations marks the major trend in the vacation rentals market. Travelers today seek more than just a place to sleep, an immersive experience that reflects local culture, nature, or unique themes such as treehouses, farm stays, or heritage homes. This shift is driven by millennials and GenZ who prioritize personalization and authenticity. Platforms and hosts are responding by curating bespoke experiences, from wellness retreats to local food tours. This trend is reshaping the vacation rentals industry, encouraging innovation and differentiation beyond traditional lodging standards.

Segmentation Analysis

By Accommodation Type

Luxurious-Experience and Amenities of Home Vacation Rentals Lead to Segment Growth

Based on accommodation type, the market is segmented into home, apartment, resort/condominium, and others.

The home or villa segment accounted for the largest vacation rentals market share in 2024 since these properties better serve as a cost-effective alternative to luxurious 5-star hotels. This accommodation type offers a budget-friendly option, particularly benefitting large groups of people. Hotel companies and property owners have strategically been entering this market segment, recognizing the growing demand for holiday homes. For instance, in September 2023, Hyatt expanded its offering with the launch of Homes & Hideaways. This short-term holiday rental platform includes thousands of professionally managed homes across the U.S. featuring cottages, beachfront escapes, mountainside chalets, townhouses, apartments, and penthouses.

The resort/condominium segment is expected to grow at an annual growth rate of 11.32%. The growth is attributed to travelers seeking amenities and luxury primarily associated with resorts, combined with privacy, space, and home-like comforts of condominiums. These properties often feature fitness centers, swimming pools, and concierge services, appealing to individuals who need a more hassle-free and upscale vacation experience.

By Booking Channel

Growing Preference for Digital Platforms Due to its Convenience Boosts Growth of Online Booking Channel

Based on booking channel, the market is segmented into offline and online.

The online booking channel segment is anticipated to expand at the fastest CAGR. The popularity of online platforms, including Airbnb, Vbro, HomeAway, and Booking.com, has significantly contributed to the segment’s growth. With the proliferation of online booking sites that offer a wide range of options globally, booking holiday homes online has become more convenient.

The offline segment contributed the highest revenue share in 2024 due to its extensive and well-established networks across the globe. Baby boomers and Gen X make up the majority share of tourists globally, and individuals in this generation are most likely to book their tours through offline channels such as travel agencies and others that offer convenience.

By Price Point

Digital Nomads and Remote Workers on a Budget to Drive Mid-Range Segment Growth

Based on price point, the market is segmented into economy, mid-range, and luxury.

The mid-range segment dominated the market in 2024. The growth is ascribed to the rising middle-class consumers’ preference for affordable accommodation, including basic amenities such as food service and clean & hygienic rooms. The segment remains popular, especially for families and budget-conscious travelers. As the middle-class population is expanding, travel has become more accessible than ever. Value-oriented travelers now have more disposable income and seek comfort without compromising on the experience.

The luxury price point segment is projected to expand at the fastest growth rate during the forecast period owing to changing travel preferences post-pandemic, seeking privacy, exclusivity, and comfort, which luxury rentals offer. Moreover, there is increased demand for experience-driven travel, where guests want curated stays with amenities such as private chefs, pools, and concierge services. Additionally, wealthier professionals and entrepreneurs working remotely are booking extended stays in upscale properties, consolidating the segment’s growth.

Vacation Rentals Market Regional Outlook

By geography, the market is categorized into North America, Europe, Asia Pacific, South America and the Middle East & Africa.

North America

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North America accounted for the second-largest share of the global market. The growth is primarily driven by a combination of factors, including personalized travel experiences, the shift toward a flexible accommodations option, and rising consumer preference for home-like amenities. Additionally, the growth of digital platforms such as Airbnb and Vrbo and the higher adoption of online channels for booking properties strengthened market growth in the region. 

The U.S. leads the market in North America as property managers are implementing technology integration and leveraging data analytics to optimize pricing, enhance occupancy rates, and tailor offerings to meet evolving traveler preferences, thereby driving revenue growth.

Europe

Europe accounted for the largest market share in 2024. The growth is attributed to modern travelers increasingly seeking accommodations that offer localized and unique stays, moving away from traditional hotel experiences. This trend is particularly strong among younger demographics, including millennials and Gen Z, who value authenticity and uniqueness in their travel experiences. Moreover, the blending of business and leisure travel, known as “bleisure” has gained popularity in the region lately, with the increase in remote and hybrid work models. Travelers are extending business trips for leisure purposes, favoring vacation homes that impart home-like amenities conducive to both work and relaxation, further fueling market expansion.

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Asia Pacific

Asia Pacific market is expected to expand at the fastest CAGR over the assessment period. The growing interest of individuals in exploring places, rising expenditure on travel and accommodations, and increasing disposable income drive the growth of the market in the region. A strong growing economy and high consumer confidence in emerging economies such as India have positively impacted the market, with travelers willing to spend more on accommodations that offer value and distinctive experiences. Also, there is a growing trend of families traveling together, seeking facilities that can cater to different age groups. Moreover, Asia Pacific, having the largest coastline of all the continents, helps generate higher average revenue, specifically during summer months. Further, major players operating in the region are taking up initiatives and widening the accommodation destinations by collaborating and partnering with property owners. Moreover, beachside towns, coastal areas, and areas with natural scenic attractions are becoming hot spots for holiday rental, leading to market growth.

South America and the Middle East & Africa

The market in the rest of the world, including South America and the Middle East & Africa, is projected to experience steady growth driven by increasing tourism, government initiatives to boost travel, and the rise of digital booking platforms such as Airbnb. In South America, growing interest in eco-tourism and cultural experiences attracts international visitors. Meanwhile, in the Middle East & Africa, luxury and heritage tourism, along with rising investments in travel infrastructure, play key roles. Changing traveler preferences for authentic, local stays also fuels demand. Additionally, rising internet and smartphone penetration enhances accessibility to holiday home options.

COMPETITIVE LANDSCAPE

Key Industry Players

Players Focus on Offering Themed Stays and Premium Amenities with Competitive Pricing to Gain Edge over Competitors

The global market is highly competitive, and the go-to-market strategies for key players include acquisition and partnerships with property owners and leveraging well-established platforms such as Airbnb, Vrbo, and Booking.com for visibility and bookings. Some of the players have developed branded websites to reduce reliance on third-party platforms and increase margins. SEO, social media, and influencer collaborations further help drive direct traffic for several brands.

Moreover, key companies in the market often collaborate with local businesses such as tour operators, restaurants, and activity organizers to create bundled offerings. These partnerships enhance the overall guest experience by providing added convenience and authentic local experiences, such as guided tours, cultural workshops, or exclusive dining deals. Strategic alliances with travel agencies or corporate travel planners also help attract a steady stream of bookings, especially in high-demand seasons or for business travel.  

LIST OF KEY VACATION RENTALS COMPANIES PROFILED

• Airbnb (U.S.)


• Vrbo (U.S.)


• Booking.com (Netherlands)


• Tripadvisor (U.S.)


• TUI Group (Germany)


• Sonder Holdings Inc. (U.S.)


• Vacasa, Inc. (U.S.)


• Blueground (U.S.)


• Plum Guide (U.K.)


• OYO Vacation Homes (Switzerland)

KEY INDUSTRY DEVELOPMENTS

• December 2024: Casago, a premier holiday rental property management company, announced that it entered into a definitive agreement with Vacasa, Inc., a leading rental vacation home management platform in North America. Both companies strive to offer unmatched rental vacation property management platforms by offering best-in-class home care and revenue for homeowners and providing superior hospitality for guests.


• September 2024: KEY.co, the leading platform for curated luxury holiday rental homes, acquired Experientials, a pioneer in brand activation and product integration. This acquisition aims at revolutionizing customer experience, blending premium products with high-end properties from the leading brands across the globe to create unique stays.


• June 2024: Holidu, one of Europe’s leading holiday home booking companies, entered into a strategic partnership with Toploc, a platform for nature holiday rental in France. This partnership is envisioned to support rental vacation homeowners with a platform that will enable them to grow their bookings and streamline renting out their vacation homes.


• August 2022: The parent company of OYO, Oravel Stays Private Limited, acquired Bornholmske Feriehuse, a Denmark-based operator of holiday rental homes, to expand its presence in Europe. The acquisition intended to grow Oyo's presence in Croatia, where it had over 7,000 houses on its Traum Ferienwohnungen platform. 


• May 2022: Travel and hospitality technology platform Oyo acquired Europe-based company 'Direct Booker' with the transaction valuing the latter at around USD 5.5 million. Direct Booker has serviced 20 lakh customers with more than 3,200 homes. This acquisition was aimed at strengthening Oyo's presence in Europe broadly and Croatia specifically where it already has nearly 1,800 vacation homes.

REPORT COVERAGE

The global vacation rentals market analysis provides market size & forecast by all the segments included in the report. It contains details on market trends and dynamics expected to lead the market in the forecast period. In addition, it provides information on key industry developments, new product launches, and details on partnerships, mergers & acquisitions. It covers a detailed competitive landscape with information on the market share and profiles of key players.

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Report Scope & Segmentation