The vacation rental industry is a rapidly growing sector of the travel industry. With the rise of home-sharing platforms like Airbnb, VRBO, and HomeAway, more and more travelers are opting for vacation rentals over traditional hotels.
But just how much is this industry worth? Let’s take a closer look.
Defining the Vacation Rental Industry
First, it’s important to define exactly what we mean by the “vacation rental industry.” This includes any type of accommodation that is rented out to travelers for short-term stays. This can include:
- Whole homes or apartments
- Condos or townhouses
- Bed and breakfasts
- Villas or cottages
- Cabins or chalets
The Size of the Vacation Rental Industry
According to a report by Grand View Research, the global vacation rental market size was valued at $87.09 billion in 2019 and is expected to reach $113.9 billion by 2027, growing at a CAGR (compound annual growth rate) of 3.4% from 2020 to 2027.
The Growth of Home-Sharing Platforms
One major factor driving the growth of the vacation rental industry is the rise of home-sharing platforms like Airbnb. These platforms allow property owners to rent out their homes or spare rooms to travelers, often at a lower cost than traditional hotels.
In fact, according to Airbnb’s IPO prospectus filed in November 2020, the company had over 7 million listings worldwide as of September 30th, 2020. Additionally, Airbnb reported $4.8 billion in revenue for the first nine months of 2020.
The Impact of COVID-19 on the Vacation Rental Industry
While the vacation rental industry was experiencing steady growth prior to the COVID-19 pandemic, the industry has faced significant challenges in the wake of travel restrictions and lockdowns.
However, some experts predict that vacation rentals may actually see a surge in demand as travelers seek out socially distanced accommodations and more private spaces. In fact, according to a survey by Airbnb, 62% of respondents said they would prefer to stay in a vacation rental because it feels safer than a hotel.
Conclusion
All in all, the vacation rental industry is a major player in the travel industry and is continuing to grow year over year. With home-sharing platforms like Airbnb leading the way, it’s clear that travelers are increasingly turning to vacation rentals as their preferred form of accommodation. While COVID-19 has presented challenges for the industry, there is reason to believe that demand for vacation rentals will only continue to increase in the years to come.