The vacation rental industry has experienced tremendous growth for more than a decade – nearly doubling in size from 1999-2011 (98%), and that trajectory should continue if recent travel trends offer any insight into the future.
Current travelers are planning their trips further in advance, staying longer during these trips and often making those trip in larger groups (despite the transient segment still leading the way in travel growth). Let’s take a look at how each of these factors influences the vacation rental industry.
Planning Ahead of Time
Why is it important to vacation rental managers that travelers are now planning trips ahead of time (35% of travelers surveyed by Sojern booked their vacations more than 30-days in advance during Q3 2013)?
A rushed traveler booking at the last minute will typically choose more traditional accommodation options including hotels and motels. However, travelers with more time to plan tend to be more creative, no doubt contributing to the ever-increasing trend of Americans who stay in vacation rentals each year.
Sojern’s data also revealed that over 60% of leisure travelers searched for vacation stays of six days or longer in the third quarter of 2013. The economics of vacation rentals, and their superior convenience with all the amenities of home, become more pronounced during a longer stay.
This trend was not limited to the leisure travel market. Business travelers stayed at their destination for six days or longer 40% of the time, signaling that business travelers may be attracted to many of the same benefits vacation rentals provide.
Large group travel trends tend to fluctuate depending on seasonal travel patterns, but in general hotels simply cannot compete when it comes to the convenience offered by vacation rentals for large groups. The ability to keep an entire family under the same roof, especially groups with young children, without the headache and hassle of room roulette.
Vacation Rental Industry Growth
A recent PhoCusWright report shows that vacation rental revenue totals nearly $55 billion. Market penetration is estimated at only 4-6% leaving ample room for growth within the industry. Here are some other intriguing numbers that will make vacation rental owners and managers happy:
-From 2007 to 2012, the percentage of vacation rentals booked online increased from 12% to 24%.
-By 2014, it is projected that 3 out of every 10 U.S. dollars spent on vacation rentals will be booked online.
-Vacation rental management companies are quickly moving toward online listings. In 2008, less than half of VRMCs offered live online booking. That number has increased to 70% since that time and is still growing.