Short Term Vacation Rentals Market Size and Share Analysis - Growth Trends and Forecasts (2026-2033)

Market Size and Trends

The Short Term Vacation Rentals market is estimated to be valued at USD 95.3 billion in 2026 and is expected to reach USD 195.7 billion by 2033, growing at a compound annual growth rate (CAGR) of 11.2% from 2026 to 2033. This significant growth reflects increasing consumer preference for flexible and affordable vacation accommodations, driven by rising travel demand and growing digital platforms facilitating easy booking and management of short-term rentals worldwide.

A key market trend is the integration of advanced technology, such as AI-driven personalization and smart home features, enhancing customer experience and operational efficiency in the short term vacation rentals sector. Additionally, sustainability initiatives and the rising popularity of non-urban destinations are reshaping market dynamics. Growing interest from both millennials and Gen Z travelers, who prioritize unique, authentic stays, is further propelling the short term vacation rentals segment, making it one of the fastest-growing areas in the hospitality industry.

Segmental Analysis:

By Property Type: Dominance of Entire Home/Apartment Fueled by Privacy and Flexibility

In terms of By Property Type, Entire Home/Apartment contributes the highest share of the market owing to its ability to offer a private, self-contained living space that caters to the increasing demand for comfort and autonomy among travelers. Unlike shared or private room options, Entire Home/Apartment rentals provide guests with full access to amenities such as kitchens, living areas, and bathrooms. This level of independence appeals especially to families, groups, and longer-stay travelers who prioritize a homelike atmosphere over traditional hotel accommodations. Moreover, the flexibility in usage makes these rentals suitable for diverse occasions, ranging from vacation getaways to work-from-anywhere scenarios.

The surge in digital nomadism and the evolving preferences for experiential travel have further propelled this segment. Travelers seek unique, localized experiences that often require more than just a single room, and entire homes facilitate immersion into neighborhood life, promoting a deeper connection with the destination. Additionally, health and hygiene considerations in a post-pandemic world have amplified the preference for entire properties, reducing exposure to shared spaces and increasing safety perceptions. Property owners and platforms have also focused their offerings and marketing efforts more on entire homes to meet this demand, leading to increased inventory and competitive pricing that attracts a wider customer base.

Properties like villas and cottages, although offering premium or niche experiences, remain smaller segments primarily due to higher price points and limited availability in urban and popular travel destinations. Meanwhile, private and shared rooms, despite being budget-friendly alternatives, are less favored by travelers who seek independence and convenience. The cumulative effect of these factors reinforces the leading market position of Entire Home/Apartment in the short-term vacation rentals space.

By Booking Mode: Online Booking Leads Through Convenience and Real-Time Access

By Booking Mode, the Online segment commands the largest share of the short-term vacation rentals market because of the unparalleled convenience and accessibility it offers to travelers globally. Online booking platforms provide instant access to a vast inventory of properties, allowing users to compare prices, review host ratings, and secure reservations with immediate confirmation. This digital transformation has made planning and booking easier and faster, aligning well with the modern traveler's expectation for seamless experiences.

The rise of mobile applications and websites dedicated entirely to vacation rentals has created a dynamic ecosystem that supports direct communication between hosts and guests, transparent payment systems, and user-generated reviews that enhance trust and reliability. These technological advancements eliminate many uncertainties traditionally associated with offline or agent-assisted bookings. Additionally, promotional offers, loyalty programs, and personalized recommendations available on these platforms incentivize users to choose online channels over offline counterparts.

The shift toward online booking is also driven by the increasing penetration of internet access and smartphone usage worldwide, enabling a broader demographic to utilize these services. Furthermore, the ability to customize searches based on location, amenities, price range, and property type empowers users to make informed decisions aligned with their travel needs. Offline booking methods, including travel agencies or direct property inquiries, remain relevant mainly in less tech-savvy markets or for niche clientele preferring in-person assistance, but they are gradually losing market share as digital literacy and confidence in online transactions grow.

By End User: Leisure Travel Dominates Fueled by Experience-Seeking and Tourism Growth

By End User, the Leisure Travel segment represents the highest share of the short-term vacation rentals market, owing to the fundamental role of tourism and recreational travel in driving demand. Leisure travelers prioritize comfort, flexibility, and unique local experiences—qualities that short-term vacation rentals provide in abundance compared to traditional hotels. The ability to stay in diverse types of accommodations, from city apartments to countryside villas, allows vacationers to tailor their trips to personal preferences and budgets.

The ongoing expansion of global tourism, coupled with the desire for novel and immersive travel experiences, fuels the demand among leisure travelers. Increasing disposable incomes, improved travel infrastructure, and the rise of social media showcasing diverse destinations all contribute to people seeking short-term rentals as a preferred lodging choice. Additionally, families and groups often prefer vacation rentals for the convenience of shared spaces and communal living areas, supporting social interaction and comfort during leisure trips.

Business travel and other segments, while significant, lack the scale of leisure travel due to the more structured nature of business trips, where hotels often dominate because of corporate partnerships and standardization. Nevertheless, the trend toward remote work and extended stays for work-cations is blending the lines between leisure and business travel, further enhancing the role of vacation rentals in accommodating blended lifestyle and travel priorities. The leisure travel segment thus remains the cornerstone of short-term vacation rentals, driven by evolving traveler behavior that emphasizes authenticity, independence, and value.

Regional Insights:

Dominating Region: North America

In North America, the dominance in the Short Term Vacation Rentals market is driven by a mature tourism infrastructure, advanced digital ecosystem, and supportive regulatory frameworks in many urban and resort areas. The presence of well-established platforms such as Airbnb, Vrbo, and Booking.com anchor the market, contributing to widespread consumer adoption and industry innovation. The region benefits from a highly developed hospitality industry, diversified tourist destinations, and strong domestic and international travel demand. Government policies in several states and municipalities have begun to regulate short term rentals more strictly, balancing community concerns with economic benefits. The active involvement of professional property management companies and technology-driven services enhances the guest experience and fosters market resilience.

Fastest-Growing Region: Asia Pacific

Meanwhile, the Asia Pacific region exhibits the fastest growth in the Short Term Vacation Rentals market, spurred by rapid urbanization, increasing disposable incomes, and burgeoning inbound tourism in countries like China, Japan, and Southeast Asian nations. The proliferation of mobile internet and tech-savvy consumers fuels digital bookings, while governments in key countries have started encouraging tourism diversification, thereby supporting short term rental adoption. Additionally, several Asia Pacific countries have introduced incentives and relaxed zoning laws to stimulate tourism-related investment. Major players such as Tujia in China and OYO Vacation Homes in India play critical roles in regional expansion, customizing offerings to local preferences and enhancing localized service delivery. The dynamic trade flows and growing middle-class travel patterns further amplify demand in this region.

Short Term Vacation Rentals Market Outlook for Key Countries

United States

The United States' market remains the most mature, with extensive integration of technology platforms into mainstream travel behavior. Large-scale operators, including Airbnb and Vacasa, continue to innovate with personalized user experiences and diversified property portfolios, pushing market standards upward. The industry's regulation varies significantly across states, influencing supply and operational models, but the US remains a global benchmark for professional short term rental management and marketing.

China

China's market showcases rapid expansion fueled by domestic tourism growth and rising preference for vacation properties that offer privacy and flexibility over traditional hotels. Key domestic players like Tujia have developed localized platforms that cater to Chinese traveler preferences, emphasizing stringent property verification and integration with social media channels. Government-led promotion of regional tourism hubs further energizes this sector, aligning with broader travel and leisure policy reforms.

Japan

Japan continues to lead with its strategic focus on sustainable tourism development and cultural experiences offered through short term rentals. The government's deregulation in recent years, particularly the introduction of the "Minpaku" law, has formalized vacation rentals, increasing supply while ensuring safety and compliance. Companies such as Rakuten STAY have capitalized on these changes by providing tech-enabled services that appeal to both inbound tourists and domestic travelers.

India

India's market is evolving rapidly with the surge of domestic travel and increased international arrivals. Platforms like OYO Vacation Homes leverage strong digital infrastructure and localized marketing to tap into untapped Tier 2 and Tier 3 city markets. Government initiatives like the Incredible India campaign and digital India drive visibility and accessibility. However, regulatory consistency remains a challenge, with some regions imposing restrictions that impact short term rental scalability.

United Kingdom

The United Kingdom's market demonstrates a blend of steady growth driven by urban centers like London and tourist hotspots across Scotland and the countryside. Stringent regulations in cities have prompted operators to prioritize quality and compliance, benefiting professional short term rental management firms such as Sykes Holiday Cottages. Brexit-related travel dynamics and government tourism strategies influence supply and demand, encouraging innovation in guest services and diversified accommodation solutions.

Market Report Scope

Market Segmentation

Property Type Insights (Revenue, USD, 2021 - 2033)

• Entire Home/Apartment
• Private Room
• Shared Room
• Villa/Cottage
• Others

Booking Mode Insights (Revenue, USD, 2021 - 2033)

• Online
• Offline
• Others

End User Insights (Revenue, USD, 2021 - 2033)

• Leisure Travel
• Business Travel
• Others

Regional Insights (Revenue, USD, 2021 - 2033)

• North America
• U.S.
• Canada
• Latin America
• Brazil
• Argentina
• Mexico
• Rest of Latin America
• Europe
• Germany
• U.K.
• Spain
• France
• Italy
• Russia
• Rest of Europe
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• ASEAN
• Rest of Asia Pacific
• Middle East
• GCC Countries
• Israel
• Rest of Middle East
• Africa
• South Africa
• North Africa
• Central Africa

Key Players Insights

• Airbnb Inc.
• Booking Holdings Inc.
• Expedia Group Inc.
• Vrbo (an Expedia brand)
• TripAdvisor Inc.
• OYO Rooms
• Sonder Corp.
• Vacasa LLC
• Tujia.com
• RedAwning Inc.
• China Lodging Group
• Michael Page International
• Agoda
• Makarim & Taira S.
• Stay Alfred
• Plum Guide
• Homestay.com