The vacation rental market is estimated to be valued at USD 79.34 Bn in 2025 and is expected to reach USD 117.03 Bn by 2032, growing at a compound annual growth rate (CAGR) of 5.7% from 2025 to 2032.
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This industry is driven by the increased preference of travelers towards experiential travels and immersive vacation experiences. As people are willing to spend more on customized and personalized vacations, they are opting for full-home or private-room vacation rentals rather than traditional hotels. Properties managed by rental managers and independent hosts have increased exponentially to meet the rising demand. Furthermore, the continued popularity of practices like workcations and remote working is boosting reservations for mid-long term stays. Rapid advancements in technologies used for listing, booking, payments, and managing rentals have also improved service quality and driven efficiency in operations.
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In terms of booking mode, online segment is expected to contributes the 65.2% share of the market in 2025. The proliferation of smartphones and the rise of intuitive travel apps have made it easier than ever for travelers to browse, compare, and reserve accommodations from anywhere in the world.
Airbnb, Vrbo, and Booking.com are examples of platforms that make it easy for users to find what they need, see real-time availability, see clear prices, and read reviews from other users. This digital convenience has reshaped consumer behavior, with most travelers now preferring to book online rather than through traditional offline channels. People of all ages, but especially tech-savvy millennials and Gen Z, keep using these platforms because they are reliable and adaptable.
For instance, in July 2025, an engineer from Hyderabad has created a travel app with no fees that aims to digitize India's homestay market. The platform wants to get 40% of the country's homestays online. It does this by giving hosts easy-to-use tools and cutting out middlemen. This moves fits with the trend of a growing number of people renting vacation homes online, and it makes it easier for both travelers and property owners to use.
In terms of accommodation type, home segment is projected to contributes the 38% share of the market in 2025 as its appeal as a home away from home. Travelers have more room and amenities when they stay in a house than when they stay in a hotel or resort. It makes them feel at home as they have full kitchens, living areas, and often extra beds. This is a good option for families or large groups who want to stay somewhere comfortable and cook their own meals for a low price. The way the houses are set up also makes them great for longer vacations, when guests can really relax in a familiar, domestic setting.
Many property owners have enhanced their rental homes with welcoming furnishings and high-quality finishes to further replicate the warm, cozy feel of a personal residence.
For instance, in July 2025, OYO and DanCenter are working together to add 250 high-end vacation homes across India by FY26.
In terms of price point, mid-range segment is projected to contributes the highest share of the market owing 46.3% in 2025 due to its attractive balance of value and flexibility. The economic segment is very cost-focused but offers limited amenities. Luxury options cost a lot and might not be good for all budgets or trip purposes. Mid-range venues address these issues by providing decently-appointed accommodations at reasonable rates. Their prices are appealing to a wide range of travelers, from couples to families, who want to get the most out of their vacation budgets.
Mid-range properties also tend to have more payment plan options, flexible cancellation policies, and options for upgrading features to meet different needs. This adaptability keeps customers satisfied without breaking the bank, making the segment a sweet spot for many vacationers.
For instance, in September 2023, Hyatt started a new vacation rental site called "Homes & Hideaways by World of Hyatt." It features hand-picked private stays like villas, chalets, and townhouses in popular U.S. vacation spots. The program combines the high standards of hotels with the freedom of home rentals, which is appealing to mid-range and high-end travelers looking for unique, vetted places to stay with loyalty program benefits.
In terms of location type, the resort area segment is expected to lead with the largest share of the market in 2025. These places have a great mix of natural beauty, fun things to do, and planned activities that are sure to appeal to a lot of different types of travelers. Resort areas are a great way to get away from the city and relax in beautiful settings, whether they are beachfront villas, mountain lodges, or lakeside cabins.
Adventure sports, wellness retreats, and cultural excursions are some of the bundled packages that make these places even more appealing. They are great for both short trips and long vacations. As more and more people travel for fun, resorts are still the best places for people who want to have fun and memorable experiences.
For instance, in November 2025, WelcomHeritage opened the Arka Resort & Spa in Rishikesh, which has 25 luxury chalets in the foothills of the Himalayas. The resort is perfect for nature-filled getaways that focus on health, sustainability, and beautiful views. This launch makes the vacation rental market in the resort area stronger, catering to travelers searching for high-end experiences in peaceful, spiritually significant locations.
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North America is expected to dominate the vacation rental market with 36.2% share in 2025, due to increasing numbers of individuals want flexible, home-like places to stay. Travelers of all kinds want personalized stays, places where they can work from home, and beautiful getaways. The region's strong digital infrastructure and preference for online booking platforms help growth even more. This makes vacation rentals a better choice than staying in a hotel.
For instance, in November 2025, by acquiring Vacasa's operations in some U.S. regions and launching a full digital overhaul, Casago solidified its place in the vacation rental market. The move enhances Casago’s property management capabilities and guest experience through improved technology, signaling a strategic push to expand its footprint and modernize services in the competitive short-term rental space.
Asia Pacific is anticipated to be the fastest growing region, due to numerous individuals are traveling within and between countries, and more people are using technology. Travelers want cheap, flexible places to stay in places with a lot of culture, and platforms are expanding into new markets. The area's many different landscapes and activities make it a popular place for both leisure and experiential tourism.
For instance, in August 2025, Elivaas, a vacation rental platform based in India, raised $10 million to grow its business and improve its digital infrastructure. The funding will help it grow by managing more high-end vacation homes and making guests' stays better. Elivaas wants to strengthen its position in the changing short-term rental market by expanding both at home and abroad.
In 2025, the vacation rental market in the U.S. is booming as travelers want stays that are tailored to their needs and are flexible. People want private homes, remote work setups, and immersive local experiences, which drives demand. Digital platforms make it easy to book, and more and more travelers are choosing rentals over hotels since they offer more space, privacy, and unique places to stay.
For instance, in August 2025, Adventure released a new all-in-one booking platform that makes it easier for users to plan their trips by combining vacation rentals, hotels, and activities. The U.S.-based service wants to change the way travelers find and book accommodations and activities by focusing on making things easier and more personal. It offers a smooth alternative to the many different booking tools that are currently available in the tourism industry.
In 2025, China's vacation rental market is booming due to numerous individuals are traveling within the country, more people are using technology, and the middle class is growing. People who travel want to stay in cities, on the coast, and in the countryside for a short time at a low cost. Platforms benefit from tech-savvy customers and a desire for experiences that are culturally rich, leading to why vacation rentals are a popular choice over traditional hotels.
For instance, in October 2025, Hyatt Studios has entered the Chinese market through a 50-hotel franchise agreement with Homeinns Hotel Group. This is the company's first time in the country's extended-stay market. The new properties will have studio-style rooms with kitchenettes and workspaces. They will be great for business and leisure travelers who want a flexible, home-like stay in major and secondary Chinese cities.
| Report Coverage | Details | ||
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| Base Year: | 2024 | Market Size in 2025: | USD 79.34 Bn |
| Historical Data for: | 2020 To 2024 | Forecast Period: | 2025 To 2032 |
| Forecast Period 2025 to 2032 CAGR: | 5.7% | 2032 Value Projection: | USD 117.03 Bn |
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| Companies covered: |
9flats, Booking.com, Hotelplan Management AG, MakeMyTrip Pvt. Ltd., OYO Hotels & Homes, Trivago, Agoda Company Pte. Ltd., Yatra Online Private Limited, Hotwire, Inc., HotelsCombined, Hotels.com, BookingBuddy.com, Inc., Priceline.com LLC, KAYAK, Google, Airbnb Inc., Booking Holdings Inc., Hotelplan Holding AG, MakeMyTrip Pvt. Ltd., Expedia Group Inc., NOVASOL AS, Oravel Stays Pvt. Ltd., Wyndham Destinations Inc., and TripAdvisor Inc. |
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The rise of the sharing economy and peer-to-peer rental platforms has provided travelers with an affordable accommodation alternative to hotels. Vacation rentals, such as entire homes, condominiums, cottages, beach houses, and chalets, listed on services such as Airbnb offer visitors increased living space and amenities at a lower price point compared to hotels. This disruptive distribution model allows homeowners to generate additional income from their unused or second properties by listing them online, while also benefiting guests seeking more value for money during their holidays. The ability to stay in an entire property rather than a single hotel room, often in desirable tourist destinations, makes vacation rentals compelling for budget-conscious travelers and families looking for spacious accommodations. Their growing popularity can be attributed to the cost savings they provide over traditional lodging such as hotels, resorts, motels, and bed & breakfasts in many popular tourist regions.
An emerging travel trend driving growth in the vacation rental sector is the rising demand for more authentic, local experiences among travelers as opposed to generic accommodation. Many visitors today are seeking meaning, cultural immersion, and authenticity during their trips rather than just sightseeing.
Travelers that stay in a vacation rental in a residential area instead of a hotel can feel more connected to the local community and culture, talk to locals, and really live like locals while they're there. They can cook their own meals like the locals do, go to places which are not as well known, and get a feel for the daily life of a place.
Vacation rentals provide a home base for travelers to embark on their own personalized exploration of places rather than just packaged tourist activities. Their growing appeal lies in satisfying the new generation of more experience-seeking travelers who want to escape from generic tours and interact with the destinations on a deeper level through living like residents.
As tourism continues to grow globally, the vacation rental market forecast indicates a significant rise in demand for accommodation alternatives like vacation rentals. Millennials especially favor unique, whole-home rentals over traditional hotels. New property management tools are also making it easier for owners to operate multiple listings remotely.
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The vacation rental market is expanding quickly since travelers' tastes are changing and more people are working from home and being flexible.
Digital channels are becoming more popular, and by 2030, online bookings are expected to bring in 79% of revenue. However, offline bookings still make up a large part of reservations. Europe is the leader in the market, but Asia-Pacific has a lot of room to grow as more individuals are using digital technology and the middle class is growing.
There are risks from regulatory scrutiny, supply growth, and operational problems like managing turnover and optimizing prices. To get more people to stay longer, hosts, platforms, and institutional players need flexible strategies to optimize pricing and improve guest experiences.
Overall, the market has a lot of potential, but success depends on being able to adapt to changing consumer behavior, digital trends, and rules.
Definition: The vacation rental market provides an alternative accommodation option for travelers looking to rent fully-furnished homes, apartments or condominium units for short-term stays. This growing market offers properties that are often more spacious and equipped with amenities like kitchens, washer/dryers compared to traditional hotels. Vacation rental platforms and sites allow homeowners to list their properties and tourists to search for and book accommodations in different destinations worldwide.
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About Author
Ankur Rai is a Research Consultant with over 5 years of experience in handling consulting and syndicated reports across diverse sectors. He manages consulting and market research projects centered on go-to-market strategy, opportunity analysis, competitive landscape, and market size estimation and forecasting. He also advises clients on identifying and targeting absolute opportunities to penetrate untapped markets.
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