Vacation Rental Market Anticipated to Grow to $137.88 Billion by 2034, CAGR at 3.85%
- ajinkya98
- Oct 17
- 3 min read
Market Overview
Global vacation rental market size and share is currently valued at USD 95.07 billion in 2024 and is anticipated to generate an estimated revenue of USD 137.88 billion by 2034, according to the latest study by Polaris Market Research. Besides, the report notes that the market exhibits a robust 3.85% Compound Annual Growth Rate (CAGR) over the forecasted timeframe, 2025 - 2034
The global vacation rental market is experiencing strong growth as travelers increasingly seek flexible, private, and home-like accommodations over traditional hotels. Vacation rentals include short-term rental properties such as apartments, villas, cottages, and vacation homes, catering to tourists, business travelers, and remote workers. Factors such as rising disposable income, the popularity of experiential travel, and the growth of online booking platforms are driving demand for diverse lodging options worldwide.
The market has also benefited from technological innovations that simplify property management, enhance guest experiences, and streamline booking processes. Mobile apps, AI-based recommendation engines, and property management software allow travelers to access personalized services while enabling hosts to optimize occupancy rates. Additionally, the growing trend of remote work and “workcations” has expanded the market, encouraging longer stays and property diversification across urban, coastal, and rural destinations.
Key Market Growth Drivers
Rising demand for flexible accommodations: Travelers prefer home-like spaces offering privacy, convenience, and cost-effectiveness.
Growth of online booking platforms: Platforms such as Airbnb and Vrbo facilitate global access to vacation rentals.
Remote work trends: The rise of work-from-anywhere lifestyles encourages longer stays and diverse property options.
Increasing disposable income and travel spending: Expanding middle-class populations in emerging economies boost tourism demand.
Key Market Dynamics
Personalized guest experiences: Hosts and platforms are offering customized services, including curated local experiences and smart home amenities.
Integration with technology: Mobile apps, AI-based pricing, and property management systems enhance convenience and efficiency.
Dynamic pricing models: Revenue management software allows hosts to optimize rental rates based on demand, seasonality, and location.
Strategic partnerships: Collaboration between property owners, tourism boards, and hospitality platforms drives market growth.
𝐌𝐚𝐣𝐨𝐫 𝐊𝐞𝐲 𝐏𝐥𝐚𝐲𝐞𝐫𝐬:
Airbnb
Booking Holdings
Expedia Group
Hotelplan Holding
MakeMyTrip
NOVASOL
Oravel Stays
TripAdvisor
Wyndham Destinations.
𝐄𝐱𝐩𝐥𝐨𝐫𝐞 𝐓𝐡𝐞 𝐂𝐨𝐦𝐩𝐥𝐞𝐭𝐞 𝐂𝐨𝐦𝐩𝐫𝐞𝐡𝐞𝐧𝐬𝐢𝐯𝐞 𝐑𝐞𝐩𝐨𝐫𝐭 𝐇𝐞𝐫𝐞: https://www.polarismarketresearch.com/industry-analysis/vacation-rental-market
Market Challenges and Opportunities
Challenges:
Regulatory restrictions on short-term rentals in certain cities can limit market expansion.
Seasonal demand fluctuations may impact occupancy and revenue consistency.
Safety, privacy, and quality concerns affect customer trust and satisfaction.
Opportunities:
Expanding vacation rental offerings in emerging markets with growing tourism infrastructure.
Adoption of contactless check-in, smart home devices, and IoT solutions to improve guest experiences.
Growth of niche markets such as eco-friendly, pet-friendly, and luxury vacation rentals.
Increasing use of AI and data analytics to enhance booking, marketing, and property management efficiency.
Country-Wise Market Trends
United States: The U.S. dominates the vacation rental market with widespread adoption of short-term rental platforms and high domestic and international travel demand. Popular destinations and coastal cities remain key growth hubs.
France: France’s rich cultural heritage, rural destinations, and coastal resorts support strong vacation rental demand, particularly in regions like Provence and the French Riviera.
Spain: Spain benefits from robust tourism, with cities like Barcelona and Madrid, as well as coastal resorts, driving vacation rental occupancy.
China: China’s growing domestic travel market and rising middle class are fueling demand for vacation rentals in urban and scenic regions.
India: India’s expanding tourism infrastructure and rise in domestic travel support the growth of vacation rental services, particularly in hill stations, beaches, and heritage sites.
Italy: Italy continues to see high demand for vacation rentals in historical cities, coastal towns, and countryside villas, driven by international tourism and cultural attractions.
Future Outlook
The future of the vacation rental market is poised for continued expansion, driven by the increasing desire for flexible, personalized, and technology-enabled travel experiences. The integration of AI-based booking tools, smart property management systems, and contactless technologies will enhance operational efficiency and guest satisfaction.
As global travel continues to recover and digital nomadism grows, the market will witness longer stays, diversified property types, and greater penetration into emerging economies. Sustainability initiatives, including eco-friendly rentals and energy-efficient properties, will further shape market trends. Overall, vacation rentals are set to remain a vital component of the hospitality sector, offering flexibility, comfort, and convenience in the evolving landscape of global travel.
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