About Vacation Rental
A vacation rental is an alternative lodging option, which involves the short-term rental of myriad properties, such as apartments, farm stays, private homes, cabins, beach houses, villas, cottages, or chalets to travelers and tourists. These dwelling units are offered on a nightly, weekly, or a monthly basis although the dominant practice in the market is renting it out weekly. They are also commonly referred to as holiday lettings, tourist rentals, bed and breakfast, homestays, and gites, among others. An essential attribute attached to a vacation rental is that it provides an authentic travel experience as they are commonly located within the community and provide the opportunity to take in the local flair and culture. The patterns and trends in the market have changed over time, and vacation rentals are increasingly becoming a part of the global temporary accommodation market.
Technavio’s analysts forecast the global vacation rental market to grow at a CAGR of 7.07% during the period 2017-2021.
Covered in this report
The report covers the present scenario and the growth prospects of the global vacation rental market for 2017-2021. To calculate the market size, the report considers the revenue generated from vacation rentals.
The market is divided into the following segments based on geography:
Technavio Announces the Publication of its Research Report – Global Vacation Rental Market 2017-2021
Technavio recognizes the following companies as the key players in the global vacation rental market: Airbnb, HomeAway, TripAdvisor, Wimdu, 9flats, Wyndham Worldwide, and World Travel Holdings
Other Prominent Vendors in the market are: At Home Abroad, OnlineVacationRentals.com, priceline.com, Rentalo, Roomorama, and Villas International
Commenting on the report, an analyst from Technavio’s team said: “Instant bookings are a new norm in the market - a result of the developing need for instant gratification among consumers worldwide. Online vacation rental sites are upgrading their technology to enable customers to book properties in real time, without having to wait for confirmation. This value addition will improve the convenience of booking a vacation rental and improve customer satisfaction. Instant bookings have become a key differentiator among major vacation rental players. One of the major reasons for the major vacation rental player, Airbnb, to introduce instant bookings was the effort to combat discrimination while booking on its online platform. Instant bookings made it more difficult for the hosts to discriminate the guests based on gender identity, race, sex, disability, sexual orientation, religion, national origin, or age. This policy was in direct response to issues and incidents of discrimination that were reported on the online platform.”
According to the report, vacation rentals offer saving opportunities in terms of rent and cheaper food as most vacation rentals are equipped with a full kitchen. The average cost of a vacation rental is $1,500/week or $200/night for a 3BHK. In addition, they also provide more value in terms of space and privacy. Also, certain vacation rental businesses allow customers to leverage their business relationships with shops, activity providers, restaurants, and tour companies and benefit from the upgrades and coupons. The fact that hotel room rates are rising (in the US, hotel room tariffs recorded a growth of 5% in 2014, over 2013) has pushed the adoption of vacation rentals further, particularly among affluent travelers.
Further, the report states that the global vacation rental market is largely fragmented. It deals with diverse customers set across different geographies and thus, has to cater to various seasons and preferences. In addition, as the suppliers of vacation rentals are also equally diverse, there is a possibility of a high level of inconsistency in quality and service. The discrepancy in pictures and the actual vacation rental home, disregard for basic standards of living, and inefficient services are common complaints among vacation rental users. This not also puts vacation rental companies at risk, it can also result in a negative consumer confidence for vacation rentals. While companies, such as Airbnb, do have a system set up to fix such cases, it ruins the vacation experience of the guests and can affect the company's revenues in the future. Therefore, its competitive advantage over hotels is largely reduced. Owners must work on streamlining their operations while abiding by a set of standard rules. There is a need for more regulation and professionalism to create a satisfactory customer experience.
Airbnb, HomeAway, TripAdvisor, Wimdu, 9flats, Wyndham Worldwide, World Travel Holdings, At Home Abroad, OnlineVacationRentals.com, priceline.com, Rentalo, Roomorama, Villas International.