Everyone in the vacation rental world is aware that the industry is growing quickly. With massive travel companies like Priceline and TripAdvisor getting into the mix, and tons of startups popping up on the periphery to help VR managers run their rentals, business is booming. As more travelers become aware of the option of renting vacation homes thanks to the success of companies like Airbnb and HomeAway, it seems that rentals will continue to grow well into the future.
A recent study estimated that the industry will grow at a rate of 7.59% every year until 2019, putting the market value at $169.7 billion by 2019, just three years away. Much of the growth is coming from North America and Europe, particularly in Europe, which held the largest market share in 2014 and continues to do so.
In the APAC (Asia-Pacific) region, an area with many tourist destinations and large populations, the industry is growing as well, there is large amount of vacant housing which is a good sign for the vacation rental industry. Demand continues to grow, as well.
Much of the industry growth is due to the rise of online platforms that make it easier than ever for vacationers to find and book reservations. When booking a vacation rental is as easy as booking a hotel, guests can take other factors into consideration, like price and the quality of the lodging, areas where VR often wins.
Another factor is increased awareness of the option of renting a vacation home. According to an internal study at Airbnb, 47% of people surveyed weren’t even aware that vacation rentals existed. As the popularity of affordable travel accommodations grow, awareness of the option will grow as well through word-of-mouth and marketing, which is a great sign for the industry at large.
In addition to the large population of the world that will become aware of VR, there’s also a large contingent of people who stay in both hotels and vacation rentals. Bill Furlong of HomeAway says:
“It’s either you draw more people that currently stay in hotels to vacation rentals, or you get a higher share of wallet from people who do take vacation rental stays but most of the time stay in a hotel. That’s the category growth opportunity, and it’s important for us to push out vacation rental inventory to where travelers are booking their travel.”
The demand is there, and it’s also growing. What HomeAway is focusing on is increasing supply, so that people who stay in both VR and hotels can do away with hotels altogether.
However, due to the massive growth and visibility of VR, competition is increasing, both between platforms and services and the rental homes themselves. Whether you are a business or a property manager, now is the time to differentiate and stand out in the market.
As with any booming industry, there is huge opportunity for both businesses and property managers to increase customers and profits before the industry becomes too crowded, as it’s in the process of becoming. As the industry grows up, those who take advantage of VR’s unique qualities will be in the best position to profit.