PUBLISHER: Fortune Business Insights Pvt. Ltd. | PRODUCT CODE: 1887033
PUBLISHER: Fortune Business Insights Pvt. Ltd. | PRODUCT CODE: 1887033
The global vacation rentals market has evolved into one of the fastest-growing segments of the travel and hospitality industry, shaped by shifting consumer preferences, digital platform expansion, and the global rise in leisure and business travel. According to the latest analysis, the vacation rentals market size stood at USD 174.84 billion in 2024, supported by strong recovery in travel post-pandemic and rising interest in unique accommodations. The market is expected to increase to USD 195.45 billion in 2025 and surge to USD 396.93 billion by 2032, recording a compelling CAGR of 10.65% during the forecast period.
Rapid urbanization, increased disposable income, and a renewed enthusiasm for global exploration have contributed to the growing popularity of vacation homes, apartments, villas, and resort condominiums. The rise of remote work and hybrid lifestyles has further transformed vacation rentals into long-term living choices for many travelers. Users increasingly prefer the comfort, flexibility, and privacy offered by these rentals over traditional hotel stays.
According to WTTC, domestic visitor spending reached USD 5.3 trillion in 2024, rising by 5.4%, while international visitor spending increased by 11.6% to USD 1.9 trillion, reflecting significant momentum in global travel demand. This directly supports the growth trajectory of vacation rentals, which are now a mainstream accommodation category worldwide.
Europe Dominates the Market with an 89.47% Share
Europe remained the global leader in 2024 with a commanding 89.47% market share, generating USD 92.38 billion in vacation rentals revenue. Europe's dominance stems from several factors:
Millennials and Gen Z travelers in Europe increasingly prefer curated, themed accommodations, reflecting a shift away from standardized hotel rooms. Additionally, remote work trends have motivated longer stays in rural and coastal destinations, boosting year-round occupancy for vacation rentals.
MARKET SIZE OVERVIEW (2024-2032)
Year Market Size
2024 USD 174.84 billion
2025 USD 195.45 billion
2032 USD 396.93 billion
The global market's growth is supported by lifestyle changes, tourism recovery, and rising adoption of online booking platforms.
MARKET DRIVERS
Remote work has fundamentally reshaped the travel landscape. As millions of professionals worldwide embrace flexible work arrangements, the demand for long-term rentals has skyrocketed. Digital nomads prefer scenic locations with strong Wi-Fi, home offices, and quiet surroundings. This "work-from-anywhere" lifestyle has turned vacation rentals into hybrid living spaces, often booked for weeks or months.
Property owners have adapted by offering:
This transition continues to push vacation rentals into new economic territory-blending leisure, productivity, and lifestyle under one roof.
Following the pandemic, travelers now prioritize:
Vacation rentals provide these benefits and allow families to cook, host, and enjoy private leisure moments, fueling increased adoption.
MARKET RESTRAINTS
Competition from Hotel Chains
Traditional hotels still present major challenges due to:
This consistency appeals to corporate travelers and older adults, limiting the adoption of vacation rentals among certain demographics.
MARKET OPPORTUNITIES
Government Tourism Initiatives
Countries worldwide, especially in Asia, Europe, and South America, are developing:
These encourage travelers to explore non-urban regions where vacation rentals often outperform hotels. Governments are also supporting small rental owners through simplified regulatory frameworks, improving market participation.
SEGMENTATION ANALYSIS
By Accommodation Type
By Booking Channel
Online Booking (Fastest Growing)
Platforms such as Airbnb, Vrbo, HomeAway, Booking.com, and Plum Guide dominate due to convenience and wide property selection.
Offline Booking
Still preferred by older travelers (Baby Boomers, Gen X) who rely on travel agents and packaged tours.
By Price Point
Mid-Range (Leading Segment)
Driven by global middle-class growth and preference for affordable yet comfortable accommodations.
Luxury (Fastest Growing)
High-net-worth travelers seek exclusive stays with:
REGIONAL OUTLOOK
North America
Second-largest market in 2024. The U.S. is a tech-driven vacation rental hub, with operators using:
Strong online booking adoption fuels regional growth.
Asia Pacific
Expected to grow at the fastest CAGR, driven by:
Countries like Japan, India, Thailand, Malaysia, and Indonesia are emerging as vacation rental hotspots.
South America & Middle East/Africa
Supported by:
COMPETITIVE LANDSCAPE
Key players include:
Airbnb, Vrbo, Booking.com, Tripadvisor, TUI Group, Sonder, Vacasa, Blueground, Plum Guide, OYO Vacation Homes
Companies compete through:
Recent examples include:
Segmentation By Accommodation Type
By Booking Channel
By Price Point
By Region