Short-term Vacation Rental Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Short-term Vacation Rental Market is projected to expand from USD 139.35 Billion in 2025 to USD 229.60 Billion by 2031, exhibiting a CAGR of 8.68%. This sector encompasses furnished residential units, including private homes and apartments, offered to travelers for brief stays as a substitute for conventional hotels. Key factors fueling this growth include a rising consumer demand for immersive, local travel experiences and the ease of accessing properties via sophisticated digital booking systems. Furthermore, the prospect of substantial income continues to motivate property owners to join the market; indeed, the Vacation Rental Management Association noted in 2024 that short-term rental supply grew by roughly 4% year-over-year, underscoring this ongoing economic incentive.

Conversely, the industry confronts significant hurdles due to increasingly strict regulatory frameworks in major global tourist destinations. Local governments are frequently enacting restrictive zoning ordinances, limits on licenses, and mandatory registration protocols to mitigate housing shortages and community issues. This intricate web of compliance obligations generates operational obstacles and legal instability for hosts, which threatens to severely hamper the expansion of inventory and restrict the overall scalability of the global market.

Market Drivers

The extensive utilization of digital booking and distribution platforms acts as a major engine for the growth of the short-term vacation rental industry. These online marketplaces have reduced entry barriers for property owners and simplified the reservation experience for guests, leading to higher transaction volumes worldwide. The ease of instant confirmations, combined with the transparency of user feedback, bolsters consumer trust and adoption rates throughout the sector. Illustrating this engagement, Airbnb reported in its Q3 2024 Shareholder Letter that Nights and Experiences Booked rose by 8% year-over-year. Similarly, Booking Holdings Inc. revealed that room nights booked for alternative accommodations increased by 12% year-over-year in the second quarter of 2024, emphasizing the scalability enabled by digital channels.

Additionally, the surge in remote work and "bleisure" travel has significantly transformed demand, creating a preference for residential-style lodgings over standard hotels. As flexible work arrangements permit professionals to merge their jobs with leisure, there is a growing need for rentals featuring dedicated workspaces, robust internet connectivity, and kitchen amenities for longer stays. This trend has dampened rental seasonality and generated new revenue opportunities for managers targeting digital nomads and families. As evidence of this shift, Airbnb’s Q1 2024 Shareholder Letter noted that long-term stays accounted for 17% of total nights booked, highlighting the enduring demand for accommodations that facilitate a hybrid lifestyle.

Market Challenges

The escalation of rigorous regulatory environments creates a major barrier to the growth of the global short-term vacation rental market. In key tourist centers, local authorities are frequently enacting restrictive policies, such as strict zoning bans, caps on the number of licenses, and complicated safety codes, to manage housing supply issues. These compliance mandates place significant financial and administrative strains on hosts, often making small-scale ventures economically unsustainable. As a result, the market sees a decline in active listings as operators remove their properties or convert them to long-term leases, effectively halting the growth of inventory.

Furthermore, this tightening of regulations fosters an unstable business environment that deters investment and restricts the sector's capacity to scale effectively. The operational impact of these rules is both significant and measurable; for instance, the Association of Scotland's Self-Caterers reported in 2024 that 77% of businesses experienced negative operational consequences following the introduction of new short-term let licensing rules. Such trends of increased oversight inevitably constrain market supply and suppress the revenue potential for the industry at large.

Market Trends

The broad implementation of AI-powered dynamic pricing is transforming revenue management approaches within the short-term vacation rental sector. Operators are progressively abandoning static seasonal pricing in favor of automated algorithms that evaluate real-time market demand, competitor actions, and booking windows to adjust daily rates. This integration of technology enables hosts to boost occupancy during slower periods and secure maximum yields during high-demand events, thereby improving overall profitability by responding immediately to shifts in traveler interest. According to a May 2024 report by Hostaway, the adoption of artificial intelligence tools by property managers rose by 63% over six months, with 41% of users specifically applying these solutions for dynamic pricing.

Concurrently, the normalization of eco-friendly and sustainable rentals has become a vital competitive factor influenced by changing consumer values. Travelers are increasingly seeking accommodations that exhibit environmental stewardship, urging property owners to adopt green measures like energy-efficient systems, waste reduction strategies, and locally sourced supplies. This trend has elevated sustainability from a niche marketing feature to an essential operational requirement for attracting environmentally conscious guests. Reinforcing this shift, Booking.com’s 'Sustainable Travel Report 2024' indicated that 75% of global travelers plan to travel more sustainably in the coming year, underscoring the pressure on hosts to match their offerings with these eco-friendly preferences.

Key Players Profiled in the Short-term Vacation Rental Market

• 9flats PTE. Limited
• Airbnb, Inc.
• Booking Holdings Inc.
• Expedia Group, Inc.
• MTCH AG
• MakeMyTrip (India) Private Limited
• Awaze A/S
• Oravel Stays Limited
• Tripadvisor LLC
• Wyndham Destinations Inc.

Report Scope

In this report, the Global Short-term Vacation Rental Market has been segmented into the following categories:

Short-term Vacation Rental Market, by Accommodation Type:

• Home
• Apartments
• Resort/Condominium
• Others

Short-term Vacation Rental Market, by Booking Mode:

• Online
• Offline

Short-term Vacation Rental Market, by Location:

• Urban
• Rural
• Beach
• Mountain
• Others

Short-term Vacation Rental Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Short-term Vacation Rental Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

This product will be delivered within 1-3 business days.