Vacation Rental Market to Hit $107.14 Billion by 2028 Driven by Rapid Digitization and Increased Focus on Convenience and Affordability
The global Vacation Rental Market is valued at USD 74.64 Billion in 2021 and is projected to reach a market size of USD 107.14 Billion by 2028 at a CAGR of 32.04% during the forecast period, 2022-2028.
Westford, USA, July 28 2022 (GLOBE NEWSWIRE) — As the economy continues to grow, more and more people are looking for ways to save money while on vacation. One option is to visit vacation rental properties. In recent years, this industry has seen incredible growth as more and more people seek to stay in accommodations that are both convenient and affordable.
There are several reasons why the vacation rental market grows so rapidly. First, there is a growing demand for unique vacation destinations that are not available domestically. This is especially true for those who want to experience the local culture while on vacation. Additionally, there is a growing trend of people wanting to stay closer to major metropolitan areas, rather than traveling out of town to find a vacation rental.
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Post Pandemic Revenge Travel Drives Vacation Rental Market Growth
Even before the pandemic hit, vacation rentals saw immense growth due to people wanting to get away from the hustle and bustle of everyday life. Shortly after the start of the Covid pandemic, demand for vacation rentals took off. During the Covid pandemic pick period, the vacation rental market has seen occupancy fall to less than 10% and many have had to halt operations due to limited cash flow and circumstances invisible.
However, the scenario changes significantly in 2021 as people were looking for an escape, and despite the harsh conditions in some parts of the world, many have found the availability of rentals allows for a trip that suits their needs.
The pandemic has only reinforced this trend of revenge travel. People are looking for ways to relax and get away from the constantly busy lifestyle that comes with living in modern society. This is also true for businesses and corporations that want to provide employees with the opportunity to take a break and rejuvenate.
Many rental properties are now taking advantage of the pandemic by offering special deals or discounts on rates. Some landlords even allow people to rent out their properties even if they are not currently using them themselves. This offers people who cannot normally take vacations the opportunity to discover another part of the world where they can relax and rejuvenate.
There is no doubt that the pandemic has changed the way people travel. For many of us, the idea of getting on a crowded plane or staying in a crowded hotel no longer appeals to us. This is why vacation rentals have become so popular in recent months. They provide a sense of privacy and seclusion that people just can’t get in a traditional hotel.
And it looks like people are already planning their post-pandemic revenge journey. A recent survey revealed that nearly 50% of all travelers plan to take a trip specifically to get away from the stresses of the past year. And what better way to do that than to rent your own private vacation home? In fact, the global vacation rental market has seen around 280% growth in traveler footfall compared to 2020.
Current investment trends in the vacation rental market
There is no doubt that the vacation rental industry is booming! According to market analysis by SkyQuest Technology, the global vacation rental market was valued at $74.64 billion in 2021. This represents a 32.04% increase from 2020, and is expected to grow further in over the next two years. And while there are many reasons for this growth, one of the main reasons is that people are more comfortable visiting different destinations outside of their home city or country.
This has led to an increase in demand for vacation rentals in remote areas, which has created new opportunities for entrepreneurs in the sector. Some of the new trends benefiting the industry include short-term rentals (which can be rented for as little as a few hours), VRBO (vacation rentals by owners), and home-sharing platforms like Airbnb.
Investments and recent developments in the vacation rental market
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In July 2022, Dallas Cowboys owner Jerry Jones invested an undisclosed amount in a software company specializing in hospitality and vacation rentals.
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In July 2022, Here, a US-based company, began raising financing starting at $100 to own a vacation rental property. So far, the company has secured over $5 million in funding through a seed round
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In July 2022, Planet, an integrated global payment software and services technology, acquired Avantio, a vacation rental management software and services company and expanded its reach into the hospitality industry market.
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Andes STR, a proptech start-up, will invest $25 million to buy family homes and put them up for short-term vacation rentals. On top of that, Andes STR and WEG Capital plan to add another 80 properties to their portfolio by 2026
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Players in the vacation rental market face challenges in responding to tougher regulations, changing consumer behavior and oversupply
The vacation rental industry is poised for rapid growth as the popularity of short-term rentals increases. However, with this growth comes challenges and trends that you should be aware of if you plan to participate in the market. Here are four key challenges to watch out for:
Increased regulation: Municipalities are increasingly beginning to regulate short-term rentals in an effort to control the number and type of properties on their streets. This has created challenges for companies operating in this space as they have to comply with complex regulations.
Growing Pains: Many companies in the global vacation rental industry have only launched in the past few years and hold minimal market share, and as such are still learning to navigate this new market. This can lead to mistakes and roadblocks as they grow, which could damage their reputation and disrupt their business model.
Competition from Airbnb: Airbnb has become one of the most popular ways for people to find vacation rentals. Therefore, companies that don’t offer Airbnb rentals may find it difficult to compete. In fact, most travelers are more likely to avoid new platforms due to a lack of knowledge about security, services, and trust.
Changing customer behavior: As people become more comfortable renting homes through platforms like Airbnb and VRBO, they are changing their expectations of vacation rentals. This means that companies that want to take advantage of this trend have to spend a lot of money to continue providing the products and services that your customers want.
Oversupply: In major cities such as New York, San Francisco and London, there is an oversupply of properties for short-term rentals that are not being used for vacation rentals. This tends to drive up prices and makes it difficult for companies offering vacation rental brands to increase revenue.
Analysis of the vacation rental market by SkyQuest Technology. Know how this report would help you to make informed business decisions
The future of the vacation rental industry looks very bright. With the growth of technology and the internet, people can book vacations much more easily than ever before. This has led to an increase in luxury vacation rentals available for rent all over the world. Additionally, Airbnb has made it easy for anyone with a property to list their rental on their site, which has certainly contributed to this growth. With so many options available now for those looking for a vacation rental, there’s no reason the industry shouldn’t continue to grow at a rapid pace in the years to come.
A recent report published by SkyQuest Technology on the vacation rental market can help players by providing information on what is happening in the market and how best to position themselves. Additionally, the report can help a company understand how consumers are using its product, which features are selling well, and how changes in the market may affect its own business. This information is invaluable as it would help players identify trends and understand how their competitors are doing. It also allows them to make informed decisions about their own business, which is crucial for any market player.
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