Short-term Vacation Rental Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Accommodation Type (Home, Apartments, Resort/Condominium, Others), By Booking Mode (Online, Offline), By Location (Urban, Rural, Beach, Mountain, Others), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 139.35 Billion
CAGR (2026-2031)	8.68%
Fastest Growing Segment	Online
Largest Market	North America
Market Size (2031)	USD 229.60 Billion

Market Overview

The Global Short-term Vacation Rental Market will grow from USD 139.35 Billion in 2025 to USD 229.60 Billion by 2031 at a 8.68% CAGR. The Global Short-term Vacation Rental Market is defined as the sector comprising furnished residential properties, such as apartments, private homes, and villas, which are rented to travelers for brief durations as an alternative to traditional hotels. The primary drivers supporting this market’s growth include the increasing consumer preference for authentic, localized travel experiences and the widespread accessibility of inventory through advanced digital booking platforms. Additionally, the potential for significant revenue generation continues to incentivize property owners to enter the sector; according to the Vacation Rental Management Association, in 2024, the available supply of short-term rental listings increased by approximately 4% year-over-year, reflecting this sustained economic motivation.

However, the market faces a substantial challenge in the form of stringent regulatory environments emerging in major tourist destinations globally. Local governments are increasingly implementing restrictive zoning laws, licensing caps, and mandatory registration schemes to address housing shortages and community concerns. This complex patchwork of compliance requirements creates operational barriers and legal uncertainties for hosts, which could significantly impede inventory expansion and limit the overall scalability of the global market.

Key Market Drivers

The widespread adoption of online booking and distribution platforms serves as a primary catalyst for the expansion of the short-term vacation rental sector. These digital marketplaces have lowered entry barriers for hosts and streamlined the reservation process for guests, resulting in increased transaction volumes globally. The convenience of instant booking, coupled with transparent user reviews, drives consumer confidence and utilization rates across the industry. According to Airbnb, November 2024, in the 'Q3 2024 Shareholder Letter', the platform reported that Nights and Experiences Booked increased by 8% year-over-year, demonstrating the robust engagement facilitated by these technological interfaces. Furthermore, the reach of these platforms extends beyond single providers to influence the broader sector; according to Booking Holdings Inc., in 2024, room nights booked for alternative accommodations grew by 12% year-over-year in the second quarter, highlighting the significant market scalability driven by digital distribution channels.

The acceleration of remote work and the rise of bleisure travel trends have fundamentally altered demand patterns, favoring residential-style lodging over traditional hotels. As workforce flexibility allows professionals to combine employment with leisure, travelers increasingly seek properties equipped with dedicated workspaces, high-speed internet, and kitchen facilities for extended durations. This shift has reduced the seasonality of rentals and opened new revenue streams for property managers catering to digital nomads and families. According to Airbnb, May 2024, in the 'Q1 2024 Shareholder Letter', long-term stays comprised 17% of total nights booked, underscoring the sustained preference for accommodations that support a hybrid lifestyle. This evolution in traveler behavior compels operators to adapt amenities and marketing strategies to capture the growing segment of guests requiring functional living spaces for longer periods.

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Key Market Challenges

The proliferation of stringent regulatory environments constitutes a primary obstacle hampering the expansion of the global short-term vacation rental market. Local authorities in major tourist hubs are increasingly implementing restrictive measures, including strict zoning prohibitions, licensing caps, and complex safety standards, to address housing availability concerns. These compliance requirements impose heavy financial and administrative burdens on hosts, often rendering small-scale operations unviable. Consequently, the market experiences a reduction in active listings as operators withdraw their properties or shift to long-term leasing models, thereby stalling inventory growth. This regulatory tightening creates a volatile business climate that discourages investment and limits the sector's ability to scale efficiently. The operational toll of these mandates is substantial and quantifiable; according to the Association of Scotland's Self-Caterers, in 2024, 77% of businesses reported a negative impact on their operations due to the implementation of new short-term let licensing regulations. This trend of heightened oversight effectively constrains market supply and dampens the revenue trajectory for the broader industry.

Key Market Trends

The widespread adoption of AI-driven dynamic pricing is fundamentally reshaping revenue management strategies within the short-term vacation rental market. Operators are increasingly moving away from static seasonal rates, instead leveraging automated algorithms that analyze real-time market demand, competitor activity, and booking windows to optimize daily rates. This technological integration allows hosts to maximize occupancy during low periods and capture peak yields during high-demand events, significantly enhancing overall profitability by reacting instantly to fluctuations in traveler interest. According to Hostaway, May 2024, in the '2024 AI Report', the utilization of artificial intelligence tools by property managers increased by 63% over a six-month period, with 41% of respondents specifically deploying these solutions to execute dynamic pricing strategies.

Simultaneously, the mainstreaming of eco-friendly and sustainable rentals has emerged as a critical competitive differentiator driven by evolving consumer values. Travelers are actively prioritizing accommodations that demonstrate environmental responsibility, compelling property owners to implement green initiatives such as energy-efficient systems, waste reduction protocols, and locally sourced amenities. This shift has transitioned sustainability from a niche marketing angle to a core operational standard necessary for attracting conscientious guests who scrutinize the carbon footprint of their lodging choices. According to Booking.com, April 2024, in the 'Sustainable Travel Report 2024', 75% of global travelers expressed a desire to travel more sustainably over the next 12 months, highlighting the robust market pressure on hosts to align their inventories with these eco-conscious preferences.

Segmental Insights

The online booking segment is identified as the fastest-growing category within the global short-term vacation rental market. This rapid expansion is primarily driven by the increasing consumer reliance on digital platforms that offer extensive property inventories and real-time price comparisons. Travelers favor the convenience of mobile applications which provide instant confirmation and secure payment gateways. Additionally, the availability of verified user reviews and detailed property visuals on these interfaces enhances trust. Consequently, the distinct shift from traditional offline channels to efficient digital solutions supports the strong performance of this segment.

Regional Insights

North America maintains a leading position in the Global Short-term Vacation Rental Market, driven by high disposable income levels and a robust domestic tourism sector. The region benefits from the widespread adoption of digital booking platforms, which provide travelers with seamless access to diverse private accommodations. Furthermore, the sustained rise in remote work has accelerated demand for flexible, home-like properties that support blended business and leisure travel. This market maturity is reinforced by established institutions such as the Vacation Rental Management Association (VRMA), which actively advances professional standards and advocacy to ensure a stable operating environment.

Recent Developments

• In October 2024, Airbnb launched the Co-Host Network, a significant product update enabling property owners to hire experienced local hosts for management support. The network debuted with over 10,000 top-rated co-hosts across ten countries, utilizing a personalized ranking algorithm to match homeowners with suitable partners based on location and property type. This initiative addressed a key supply constraint in the global short-term vacation rental market by lowering barriers for potential hosts who lack the time to manage listings. The feature allows for seamless collaboration directly within the app, covering tasks from guest communication to booking management.
• In October 2024, Booking.com expanded its suite of generative AI tools to streamline the search and booking experience for the vacation rental market. The company introduced features such as "Smart Filter," which allows travelers to find rental properties using natural language descriptions, and "Property Q&A," which utilizes artificial intelligence to provide instant answers to specific questions about a listing's amenities and policies. Additionally, the platform implemented "Review Summaries" to distill extensive guest feedback into concise insights. These product enhancements were designed to help customers efficiently navigate the growing inventory of short-term rental options.
• In August 2024, Sonder Holdings Inc. finalized a strategic long-term licensing agreement with Marriott International to integrate its portfolio into the global hospitality leader's system. Under the new "Sonder by Marriott Bonvoy" collection, more than 9,000 existing Sonder apartment-style units were set to join Marriott’s digital channels by the end of the year. This collaboration was designed to bolster Marriott’s presence in the short-term vacation rental market by offering premium, longer-stay urban accommodations. Simultaneously, the partnership provided Sonder with enhanced liquidity and access to Marriott’s extensive loyalty program and global distribution network.
• In May 2024, Airbnb introduced "Icons," a new category of extraordinary experiences and stays hosted by prominent figures from the worlds of music, film, and sports. The product launch featured eleven distinct listings, including a stay at the Ferrari Museum in Italy and a real-life recreation of the house from the animated film Up. This strategic development aimed to differentiate the platform within the global short-term vacation rental market by offering exclusive, immersive travel opportunities. The initiative focused on leveraging pop culture partnerships to drive brand engagement and attract guests seeking unique, non-traditional accommodation experiences.

Key Market Players

• 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.

By Accommodation Type	By Booking Mode	By Location	By Region
Home Apartments Resort/Condominium Others	Online Offline	Urban Rural Beach Mountain Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Short-term Vacation Rental Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• 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
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE