The Global Online Home Rental Market is estimated to be valued at US$ 20.58 Billion in 2024 and is expected to exhibit a CAGR of 13.1% over the forecast period 2024-2031.
The online home rental market allows individuals to rent private homes, apartments, condominiums, villas, cabins, and more for short and long-term stays. It provides an alternative to standard hotels by offering travelers fully furnished and equipped living spaces with all the amenities of home. The online platform enables users to easily find vacation rental properties, compare rates, view photos and amenities, read reviews from other guests, and book with just a few clicks. Key players operating in the online home rental market are Airbnb, Booking.com, Expedia, TripAdvisor, and HomeAway.
Key Takeaways
Key players: Airbnb dominates the online home rental market with over 7 million listings globally. It raised $3.5 billion in funding in April 2021 pushing its valuation to $100 billion. Booking Holdings also sees high growth in its home rentals business with more than 2.3 million properties listed.
Growing demand: Online Home Rental Market Growth is witnessing surging demand as people prefer independent stays and home-like luxuries over hotels. The flexibility to rent for a night, a week or longer is appealing to families, couples and corporate travelers.
Technological advancement: Platforms are continuously enhancing search filters, reviews, payment options and integrated services like cleaning to improve user experience. Virtual and augmented reality tools help potential guests view properties before booking.
Market Trends
Boutique and specialty rentals: Unique properties like boats, castles, barns, tiny homes and treehouses are gaining popularity. Experiential travel is driving demand for such distinct accommodations.
Hosting as income stream: More homeowners are listing spare rooms, apartments or homes full-time on platforms to supplement their income through hosting.
Market Opportunities
Long-term rentals: With remote working becoming common, demand is surging for monthly rentals. This provides a stable source of income for hosts.
Under-penetrated markets: Many developing nations present major growth prospects as internet and smartphone reach expands in regions like Southeast Asia, Latin America, Middle East and Africa. New users and longer average stays will fuel revenues.
In the online home rental market offers immense opportunities for stakeholders with its expansion into new typologies, locations and customer segments. The market is estimated to surpass $260 billion in value by 2030.
Impact of COVID-19 on Online Home Rental Market growth
The COVID-19 pandemic has had a significant impact on the online home rental market. During the pre-COVID times, the market was growing steadily supported by rising urbanization, job transfers, and flexible work culture. However, the imposition of lockdowns and travel restrictions worldwide due to the COVID-19 outbreak has disrupted the market growth trajectory.
When the pandemic first hit, the demand for short-term and long-term home rentals declined sharply as people were confined to their homes. Many travelers and tenants canceled their bookings or ended their leases prematurely due to job and income uncertainty. This led to high vacancy rates for property owners. However, as lockdowns eased, the demand revived with people preferring rented homes over hotels for safety reasons. Working professionals also shifted from rooms on rent to complete homes to accommodate work from home needs. This boosted the online listings and transactions on rental portals.
Nevertheless, rental prices fell compared to pre-COVID levels due to lower demand and higher supply. Property owners offered discounts, special payment plans and rebates to attract tenants. Going forward, factors like work from home and hybrid work culture are expected to continue supporting the online home rental market in the post-COVID era. Rental portals are also innovating with virtual property tours, e-signatures and digital payments to provide a safe, contactless rental experience.
Regional concentration of Online Home Rental Market
In terms of value, the online home rental market is highly concentrated in North America. The region accounts for over 35% of the global online rental housing revenues led by a large number of listings and transactions in the US and Canada. The presence of major rental portals and a flexible living culture supported by job mobility have boosted short-term and long-term home rentals through online platforms.Europe is another lucrative region holding around 30% market share led by countries like the UK, Germany, and France.
Asia Pacific is currently the fastest growing regional market for online home rentals. Major economies like India and China are witnessing a booming rental housing sector with evolving work patterns, urbanization and smart city projects. Countries like Japan, South Korea and Singapore are also shaping lucrative opportunities due to property shortages and high ownership costs. The Middle East and Africa currently make marginal contributions but are expected to witness faster growth in the coming years supported by new portal entries and growing internet accessibility in the regions.
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