According to Fortune Business Insights, the global vacation rentals market was valued at USD 174.84 billion in 2024 and is projected to reach USD 396.93 billion by 2032, expanding at a CAGR of 10.65% during 2025–2032. In 2025 alone, the market is expected to reach USD 195.45 billion. Growth is driven by the global rise in travel, changing consumer accommodation preferences, and the rise of digital platforms like Airbnb, Vrbo, Booking.com, and Tripadvisor.
Vacation rentals have become a preferred alternative to traditional hotels, offering travelers personalized, cost-effective, and flexible lodging. The rise of remote work and lifestyle travel further strengthens the demand for vacation homes, villas, and short-term rentals. With increasing user penetration and digital convenience, vacation rentals are quickly becoming mainstream for global travelers.
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KEY MARKET TRENDS
- Experiential & Themed Stays on the Rise: Travelers increasingly seek accommodations that offer more than just a place to sleep. Properties that deliver unique experiences—such as heritage homes, nature retreats, and locally curated activities—are gaining traction.
- Luxury Rentals Surge Post-Pandemic: High-income travelers are gravitating toward private, amenity-rich spaces that offer exclusivity and wellness-focused experiences.
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)
MARKET DYNAMICS
Market Drivers
- Remote Work & Digital Nomadism: With more professionals working remotely, extended stays in vacation homes have surged, especially in scenic and culturally rich destinations.
- Tech-Driven Convenience: Platforms now offer dynamic pricing, digital check-ins, and property management tools, making vacation rentals more competitive with hotels.
- Traveler Preferences: Increasing demand for privacy, larger spaces, and immersive local experiences drive market momentum, particularly among millennial and Gen Z travelers.
Market Restraints
- Competition from Traditional Hotels: Hotels offer standardized services, loyalty programs, and central locations, which still appeal to many business and luxury travelers.
- Quality and Regulation Issues: Variation in property standards and inconsistent regulations across countries can hinder consumer trust and limit growth in certain markets.
Market Opportunities
- Government Tourism Campaigns: Initiatives promoting local tourism and supporting small property owners open up new opportunities, especially in emerging economies.
- Themed and Experiential Stays: Growth in demand for cultural, eco-friendly, and themed accommodations (treehouses, farm stays, etc.) provides differentiation and premium pricing options.
SEGMENTATION ANALYSIS
By Accommodation Type
- Home/Villa Rentals dominated the market in 2024, offering privacy, space, and affordability, especially for families and groups.
- Resorts/Condominiums are projected to grow at a CAGR of 11.32%, driven by demand for upscale amenities paired with home-like comfort.
By Booking Channel
- Online Booking platforms lead growth, with travelers preferring platforms like Airbnb and Vrbo for their convenience, global reach, and user-friendly interfaces.
- Offline Channels still contribute significantly, particularly among baby boomers and Gen X travelers booking via traditional travel agencies.
By Price Point
- Mid-Range Rentals were the most popular in 2024 due to their balance between affordability and comfort. This segment caters to budget-conscious families and middle-income travelers.
- Luxury Rentals are expected to grow fastest as affluent travelers seek premium, curated experiences with amenities like private pools, chefs, and concierge services.
REGIONAL OUTLOOK
Europe
- Dominated the global market with an 89.47% share in 2024.
- The region’s growth is supported by a preference for localized and authentic stays, especially among younger travelers embracing “bleisure” (business + leisure) travel.
- Countries like Germany, France, and the U.K. are key contributors.
North America
- The U.S. leads regional growth with high platform usage, digital integration, and a surge in work-from-anywhere culture.
- Tech-enabled property management and flexible stay models strengthen market performance.
Asia Pacific
- Expected to register the fastest CAGR from 2025–2032.
- Growth is fueled by rising disposable incomes, domestic travel trends, and increased adoption of digital booking in countries like India, China, and Southeast Asia.
- Coastal areas and nature-centric destinations are driving up revenue during peak travel seasons.
South America and Middle East & Africa
- Emerging growth regions benefiting from cultural tourism, eco-tourism, and increasing government investment in travel infrastructure.
- Countries like Brazil and South Africa are attracting tourists through unique natural and cultural experiences, while UAE and Saudi Arabia support luxury vacation rental growth.
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COMPETITIVE LANDSCAPE
Leading players such as Airbnb, Vrbo, Booking.com, and Tripadvisor dominate the vacation rentals market. Key strategies include:
- Strengthening brand visibility through SEO, social media, and influencer marketing.
- Partnering with local hosts and businesses to enhance guest experiences.
- Offering curated, themed stays to stand out in a competitive landscape.
- Launching proprietary platforms (e.g., Hyatt’s Homes & Hideaways) to reduce reliance on third-party sites and control guest experience.
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: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.
The global vacation rentals market is undergoing rapid transformation, driven by changing traveler behavior, technology advancements, and growing demand for authentic and flexible accommodation experiences. With remote work becoming a norm and travelers seeking more personalized options, vacation rentals are positioned to rival traditional hotel offerings, offering immense growth potential across both mature and emerging markets.