The vacation rental market Growth Accelerated by Demand For Flexible Accomodation Options
Vacation rentals provide temporary housing accommodations for tourists and business travelers as an alternative to hotels. They offer fully furnished apartments, villas, cottages, beach houses, cabins, and other unique properties for short-term stays. The rising global tourism has increased the demand for unique and experiential accommodation options. Vacation rentals allow travelers to live and feel like a local in their chosen destination. The global vacation rental market provides a variety of accommodation options ranging from luxury villas to budget-friendly apartments to suit all travel budgets and needs.
The global Vacation Rental Market is estimated to be valued at US$ 72588.74 Mn in 2023 and is expected to exhibit a CAGR of 9.5% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
Rising global tourism presents a huge market opportunity for the vacation rental market. According to the United Nations World Tourism Organization (UNWTO), international tourist arrivals reached 1.4 billion globally in 2021, a 4% increase compared to 2020 despite the ongoing challenges of the COVID-19 pandemic. Further recovery is forecasted with a 60-80% return to pre-pandemic arrivals projected by 2023. This rising tourism presents substantial opportunity for vacation rental properties to cater to the accommodation needs of this growing tourism sector. The unique, local experience offered through vacation rentals can appeal more to experience-seeking modern travelers compared to standardized hotel rooms. If vacation rental hosts effectively market and position their properties, they can leverage the tailwinds of resurgent global tourism to witness increased bookings and revenue over the forecast period.
Porter's Analysis
Threat of new entrants: The vacation rental market size has moderate threat of new entrants due to high financial and infrastructural requirements. However, new ventures can enter the market by partnering with property owners.
Bargaining power of buyers: Buyers have moderate bargaining power in the vacation rental market due to availability of multiple listing sites for price comparison. Switching costs for buyers are also low.
Bargaining power of suppliers: Property owners who provide their homes and land as vacation rentals have low bargaining power in the market due to dependence on intermediaries for rental management and bookings.
Threat of new substitutes: Substitutes like standard hotel rooms pose low threat as vacation rentals provide distinct experience of staying in residential neighborhoods.
Competitive rivalry: The market is highly competitive with global listing sites competing on customer experience and property listings.
SWOT Analysis
Strength: Availability of various accommodation types and sizes. Personalized services. unique local experience.
Weakness: Dependency on property owners. Seasonal demand fluctuations. Higher operating and maintenance costs than hotels.
Opportunity: Increased preferences for customized and home-like stays. Growth of leisure tourism and digital nomads.
Threats: Stricter regulations. Rising property prices limiting rental supply.
Key Takeaways
The vacation rental market provides significant accommodation option for travelers looking for home-like experiences away from standard hotels. The global Vacation Rental Market is estimated to be valued at US$ 72588.74 Mn in 2023 and is expected to exhibit a CAGR of 9.5% over the forecast period 2023 to 2030.
The Asia Pacific region is projected to witness highest growth led by countries like India and China where domestic tourism is booming. Regional cultural experiences and natural attractions are driving demand for vacation rentals.
Key players operating in the vacation rental market are Airbnb, Expedia Group, Booking Holdings, TripAdvisor and Agoda. Airbnb dominates the global market with the largest supply of vacation rental listings worldwide. It has shifted consumer preferences towards experiences over possessions with its unique home rental concept.
Get more insights on this topic: https://creativenewsalert.blogspot.com/2023/12/the-vacation-rental-market-growth.html
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