The State of the Global Vacation Rental Market 2017

by Dave Montali, Luke Bujarski + Skift Team - Feb 2017

Skift Research Take

Airbnb popularized a new type of rental product - i.e. the primary-residence urban rental, but now professionally managed properties are coming online with fury. Looking forward ten years, the landscape will likely look quite different. Consolidation is in the air; vacation rentals have gone mainstream with the consumer but inventory remains fragmented. Property managers, marketplaces, SaaS platforms and a host of other add-on services are evolving their strategies to capture greater scale and efficiencies.

Report Overview

The vacation rental market has captured serious attention from investors and travel consumers in recent years. The Airbnb marketplace disrupted and transformed the space by introducing a new category of rental: the underutilized resident-occupied flat, room, home, villa, treehouse, houseboat, and other forms of non-hotel accommodations. And while Airbnb has captivated the imagination of the mainstream media, an undercurrent of technological innovation has also taken root within the traditional, professionally-managed vacation rental space. In this report, we analyze the role of Airbnb as a marketplace and distribution channel, but also look more broadly at the tech-enabled ecosystem that has developed around the professionally-managed investment property — most often referred to as the vacation rental (VR). Investments in the form of acquisitions and venture capital have poured into property management groups, third-party technology providers, and online marketplaces including Airbnb. Competition on the supply and demand side has exploded as a result of the Airbnb effect. In this context, the large OTAs including Expedia and are stepping up to compete against Airbnb on the distribution front. Meanwhile, the dominant property management companies including Wyndham and Accor continue to roll up a heavily fragmented supply of vacation rental properties. Here, technology will continue to play a key role in shaping a rapid evolution of the market. Until recently, innovation in the VR product category has remained slow compared to other segments in travel. Access to real-time pricing and unit availability across a deeply fragmented supplier base is one example; discussions with industry insiders point to further efficiencies and savings that can be achieved both in distribution and property management costs. This competitive environment will spur new investments and innovations targeting the full breadth of the VR value chain, i.e. the property owner, manager, distributor, and end consumer.

What You'll Learn From This Report

  • State of fragmentation and consolidation in the vacation rental industry
  • Supply and demand-side market sizing of U.S. and European markets
  • Overview and assessment of acquisitions and venture capital funding rounds
  • Overview and assessment of the vacation rental technology ecosystem
  • Inventory and assessment of new players entering the space
  • Insights into the major vacation rental marketplaces including Airbnb

Executives Interviewed

  • Gail Mandel, President and CEO at Wyndham Destination Network
  • Eric Breon, CEO at Vacasa
  • Evan Frank, CEO at onefinestay
  • Sean Conway, CEO at Pillow
  • Steve Milo, Manager and Founder at VacationRentalsPro
  • Tracy Lotz, CEO at LiveRez
  • Mathew Hoffman, VP and General Manager at Kigo
  • Mike Copps, Executive Director at VRMA
  • Ian McHenry, CEO at Beyond Pricing
  • Andrew Kitchell, CEO at Wheelhouse
  • Alex Aydin, CEO at BookingPal
  • Andrew McConnell, CEO at
  • Vanessa de Souza Lage, CMO at Rentals United
  • Nathan Tobin, Director of Sales at Guesty

List of Figures

  • The three waves of consolidation
  • Comparison of large Hotel Brands Vs. Vacation Rental Sites
  • Largest Vacation Rental Marketplaces
  • Funding in the Vacation Rental Sector
  • Traffic Volume of the large Marketplaces
  • Wyndham Financial Performance