FMI says that surging family and group travel is providing opportunities for leading players
A new study by analysis firm Future Market Insights has unveiled that short-term vacation rental market is expected to expand at a CAGR of 10.8 pc globally through 2034.
Denoting stable growth in the industry, FMI report adds that its market value is projected to increase from USD 135.26 billion in 2024 to USD 377.19 billion by 2034. The short-term vacation rental industry share was valued at USD 121.42 billion in 2023.
Among emerging trends in the global short-term vacation rental market, the hospitality industry is seen transforming as online platforms add to the increasing popularity of vacation rentals. Distinct accommodations, from apartments to villas, are offering personalised experiences and raising competition for traditional hotels, says the study.
FMI adds that surging family and group travel is providing opportunities for leading players. Digital nomads and millennials demonstrate a strong appeal for these accommodations due to immersive travel experiences.
According to country-wise insights, the report says that in the United States, the short-term vacation rental market is set to register a CAGR of 5.90 pc through 2034. The top contributors to market growth is a growing number of travellers, particularly millennials, who are seeking new ways to explore new places and acquire distinct experiences. Notably, an emerging trend of glamping is also favouring the demand for short-term vacation rentals.
When accounting for the growing trend of short-term vacation rentals among millennials and digital nomads in India, the report says that this segment is expected to experience a CAGR of 15.7 pc through 2034. The report says that one of the leading factors in the industry’s growth in India is that travellers are increasingly requesting personalised options while planning their vacation trips. This is anticipated to positively influence the short-term vacation rental industry.
The report adds that millennials and digital nomads find these accommodations highly appealing. This is because short-term vacation rentals offer flexible and indulgent experiences suited to their requirements. Further, property owners are leveraging their unused space and properties by putting them up for rentals. These rentals allow owners to generate passive income.
According to the study, one of the top strategies of leading companies operating in the short-term vacation rental market is aiming for a higher volume of customers by adopting various strategies like expansion into new verticals. Additionally, players are also focusing on diversification of their services to expand their market share.
The report says that market leaders are reaching new markets by listing their properties in new countries, cities and regions. This strategy is being propelled by the rising popularity of short-term vacation rentals as an alternative to conventional hotels.
In terms of new developments and trends shaping the short-term vacation rental market, software company Evolve has showcased a seasonal analysis of the latest trends in the vacation rental sector during the winter of 2022-23. The statement adds that insights and metrics offered by software company Evolve are valuable for owners of short-term rentals who want to maximise their property’s performance.
The report adds that Zumper, a privately owned rental marketplace, advertised the launch of ‘Vacations by Zumper’ in March 2023. It is a focused site with vacation rental listings as part of its broader focus on the short-term rental market. More and more companies are committing to expanding their presence in the short-term rental sector.
