Vacation rental

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A vacation rental is the renting out of a furnished apartment, house, or professionally managed resort-condominium complex on a temporary basis to tourists as an alternative to a hotel. The term vacation rental is mainly used in the US. Other terms used are self-catering rentals, holiday homes, holiday lets (in the United Kingdom), cottage holidays (for rentals of smaller accommodation in rural locations) and gites (in rural locations in France).


Vacation rentals have long been a popular travel option in Europe (especially in the UK) as well as in Canada and are becoming increasingly popular around the world.

Types of accommodation

Vacation rentals usually occur in privately owned vacation properties (holiday homes), so the variety of accommodations is broad and inconsistent. The property is a fully furnished property, such as a holiday villa, apartment, cottage, condominium, townhome or single-family-style home. Farm stay can encompass participation on a working farm or a more conventional rental that happens to be co-located on a farm. The client/traveler arranges to rent the vacation rental property for a designated period of time. Some rent on a nightly basis, similar to hotel rooms, although the more prevalent vacation rental industry practice is typically weekly rentals.

Vacation rentals can range from budget studio apartments to lavish, expensive private villas in the world's most desirable locations, some with price tags of many thousands per night and all the amenities you would find in any luxury accommodation (fully staffed, private beaches, boats, chefs, cooking lessons, etc.) to cater to the guests.

Some vacation rentals, particularly condominiums or apartments, offer many of the same services hotels offer to their guests, e.g., front desk check-in, 24-hour maintenance, in-house housekeeping, and concierge service. Many "hospitality, timeshare and premier independent resorts...that until now, access to these resort-condominium complexes was available exclusively through purchase options such as whole, fractional, or timeshare ownership," are now offering daily vacation rentals. [1]

At the other end of the spectrum are campervan and motorhome rentals.


A row of vacation homes at Big White Ski Resort in Canada Rental Home BW.jpg
A row of vacation homes at Big White Ski Resort in Canada

Villa holidays are very popular in Europe, and main destinations include the United States Virgin Islands, Italy, Spain, France, Germany, Greece, and Turkey. In France, they are known as gîtes.

Vacation rentals are available in most states of the US and are prevalent in major tourist areas such as Florida, Hawaii, and California, as well as in other coastal areas with beaches, where they may be referred to as beach houses, many of which are rentals. The vacation rental market is much larger in Europe than in the United States, and Florida is a popular destination for villa holidays for Europeans.

Comparison with other accommodations

Consumers unfamiliar with the concept of a vacation rental may confuse it with the seemingly similar but distinctly different timeshare. Many timeshare resorts offer quarter ownership, which provides 13 weeks of use or rental.

A timeshare can still be made available as a vacation rental should an owner decide to put his owned week(s) on a vacation rental program. Also, a large segment of the 21% of unsold and therefore still resort-controlled inventory is made available as vacation rentals. In 2014, this was a $1.9 billion business. [2]

A timeshare is a piece of real estate—often a fully furnished condominium—that is jointly shared by multiple owners. While different types of timeshare ownership exist, in general, each owner bears a portion of the responsibility, along with the right to a segment of time in which he or she is granted sole use of the property. Timeshare resorts allow financially qualified guests to rent and tour their unowned properties and then make those properties available to the guest for purchase. Timeshare owners can also choose to bank their week with an exchange company such as RCI or Interval International or rent the unit.

Traditional hotels generally do not include vacation properties. However, some contemporary resort developments include shared ownership components such as villas and condominiums that can be either rented through the hotel or rented out by their owners either directly or through agencies.

Vacation rental market size

Evercore estimates the global addressable vacation rental market to be $100 billion, with two-thirds of the market "for rent by owner". [3]

Online, listing services, agencies, and management companies

Vacation rentals and villa rentals are arranged either direct with the owner or through an agency, usually via the internet. Many owners have their own websites, but most also use listing services, which display property information and photos provided by the homeowner. Because each property owner has his or her own deposit and payment requirements, cancellation policies, key-pick-up procedures, etc., a guest contacts the property owner directly in order to book.

There are different kinds of listing sites, with different specialisms (for example, destination-specific, luxury, rural, etc.) and features (such as instant booking or loyalty programs). [4]

In November 2015, Expedia bought HomeAway (which also owns VRBO and many other vacation rental brands) to compete with Airbnb. [5] HomeAway and VRBO were combined into a single brand known as Vrbo. [6]

There are also other online vacation rental sites that specialize in metasearch or resort residences. [7] Metasearch plays a role in the rental ecosystem by connecting rentals from different listing companies under a single experience.

In contrast, vacation rental agencies handle reservations and billing on the homeowner's behalf, and there is no direct contact between the guest and the owner. Because the fee or commission charged to an owner by an agency is higher than that charged by a listing service, the rent tends to be higher.

In the United Kingdom, villa holidays are also sold by tour operators as packages, including flights and car hire. This is convenient for guests who prefer not to make their own arrangements, but it may not be cheaper and does not usually allow the guest to choose a specific property.

Most property owners contract a vacation rental management company to manage their vacation rentals. These companies handle housekeeping and property maintenance. Some management companies also act as agencies, marketing the vacation rental property and handling reservations and billing. Most vacation rental management companies work on a commission basis, meaning they do not make a guarantee to the homeowner in terms of weeks that will be rented or revenue earned. [8] Rather, they collect a commission ranging from 20% to 50% of any revenues generated. [9]

An alternative arrangement is where vacation rental managers provide homeowners with a guaranteed rental. Under these arrangements, vacation rental managers buy all of the weeks the homeowner wishes to rent in a single transaction. This provides the homeowner with guaranteed income and puts the risk and management burden on the rental manager. [10]

Travelers' concerns

Some travelers avoid vacation rentals for fear of what industry insiders call SNAD: "Significantly Not As Described." This refers to a property that looks like paradise in the photos, only to reveal leaky roofs and blocked views upon the traveler's arrival. To reduce this risk, many vacation rental companies offer user reviews. [11]

Another significant concern is that people may create false accounts and advertise vacation homes that they do not in fact own. This can lead to unsuspecting customers booking and paying for a vacation, only to find on arrival that the rental does not exist. Given that the accommodation has been booked and paid for many months in advance, the culprit may disappear without a trace, leaving the customer out of pocket. [12]


Vacation rentals can provide positive impacts on local economies. Vacation rentals at times allow for longer stays as opposed to hotels, and longer stays increase visitor spending which provides more employment opportunities in local communities. Increases of tourist spending in a vacation rental area helps fuel the economy through the multiplier effect by increasing wages.

Some businesses like Airbnb are starting to use their popularity to contribute to more sustainable travel. Airbnb’s program, called Social Impact Experience, involves rental hosts advertising and holding activities for their guests that are provided by a nonprofit organization of the hosts choosing. This feature supports sustainable travel as it allows visitors to get involved in local organizations that help better the community in which they are travelling to. [13]

Vacation rentals can also negatively affect local communities in a number of ways. While not the major cause of limited affordable housing, vacation rentals negatively affect the long-term housing market in local communities, especially tourism communities. As more short-term rentals increase, the availability of long-term units decreases. However, HBR researchers point out that “owner-occupiers” that rent out rooms or the entire house while they are absent does not affect the long-term rental market. [14] Another implication of short-term vacation rentals is that local communities can be disrupted by guests in unfamiliar neighborhoods. Visitors may be uninformed of the culture, attitudes, and unspoken guidelines of a neighborhood in which they are staying in. Loud parties after quiet hours, lack of consideration for residential parking, and cultural interpersonal differences are a few of the primary concerns for residents with nearby vacation rentals. [15]


In many counties, towns, and cities, local authorities attempt to regulate or ban vacation rentals after complaints from local residents or competing lodging businesses. In the U.S. New York City, Chicago and other cities have introduced restrictions on short-term rentals, though regulation is not always strictly enforced. [16] The City of Portland, for example, does not allow rentals of less than 30 days in residential zones but according to local vacation property managers such as Vacasa, the average guest stays 3-10 nights. [17]

San Diego, California has also created similar restrictions. Starting in 2022, the city put a cap on the number of properties that could be used as short-term vacation rentals at 1%. This restriction was approved by the California Coastal Commission and will be available for review in seven years. [18] This restriction will only apply to homes where the owner is not a permanent resident. For example, shared rooms that are available in homes where the owner lives will not be a part of this restriction. The city also requires that those renting out their homes as short-term vacation rentals must pay Transient Occupancy Fees, just as hotels, motels, campgrounds, and RV parks are subject to. [19] This will ensure that public services such as trash collectors and water usage are accommodated for financially. Council president, Jennifer Campbell, has noted that these regulations “...will close the chapter on an unregulated market that has vexed our city, our residents, and our good-faith hosts who wanted a clear set of regulations to follow.” [20]

See also

Related Research Articles

<span class="mw-page-title-main">Lodging</span> Industry and type of residential accommodation

Lodging refers to the use of a short-term dwelling, usually by renting the living space or sometimes through some other arrangement. People who travel and stay away from home for more than a day need lodging for sleep, rest, food, safety, shelter from cold temperatures or rain, storage of luggage and access to common household functions. Lodging is a form of the sharing economy.

<span class="mw-page-title-main">Resort</span> Self-contained commercial establishment which attempts to provide for most of a vacationers wants

A resort is a self-contained commercial establishment that tries to provide most of a vacationer's wants, such as food, drink, swimming, lodging, sports, entertainment, and shopping, on the premises. The term resort may be used for a hotel property that provides an array of amenities, typically including entertainment and recreational activities. A hotel is frequently a central feature of a resort, such as the Grand Hotel at Mackinac Island, Michigan. Some resorts are also condominium complexes that are timeshares or owned fractionally or wholly owned condominium. A resort is not always a commercial establishment operated by a single company, but in the late 20th century, that sort of facility became more common.

<span class="mw-page-title-main">Timeshare</span> Property with a particular form of ownership or use rights

A timeshare is a property with a divided form of ownership or use rights. These properties are typically resort condominium units, in which multiple parties hold rights to use the property, and each owner of the same accommodation is allotted their period of time. Units may be sold as a partial ownership, lease, or "right to use", in which case the latter holds no claim to ownership of the property. The ownership of timeshare programs is varied, and has been changing over the decades.

The Disney Vacation Club (DVC) is a vacation timeshare program owned and operated by Disney Vacation Development, Inc., a subsidiary of Disney Signature Experiences, a division of Disney Parks, Experiences and Products, a segment of The Walt Disney Company. It allows buying a real estate interest in a DVC resort via a flexible points-based membership system. There are an estimated 220,000 club members.

Fractional ownership is a method in which several unrelated parties can share in, and mitigate the risk of, ownership of a high-value tangible asset, usually a jet, yacht or piece of resort real estate. It can be done for strictly monetary reasons,by renting out weeks or months online on the many Online travel agents,such as Expedia air BnB luxe TripAdvisor etc, but typically there is some amount of personal access involved. One of the main motivators for a fractional purchase is the ability to share the costs of an asset that will not be used full-time by one owner.If owners use some time for their own vacations and some to rent out to receive income with the aim of paying off their original purchase then this becomes a win win for the buyer.

<span class="mw-page-title-main">Condo hotel</span> Condominium operated as a hotel

A condo hotel, also known as a condotel, hotel condo or a contel, is a building which is legally a condominium but which is operated as a hotel, offering short term rentals, and which maintains a front desk.

<span class="mw-page-title-main">Marriott Vacation Club</span>

Marriott Vacation Club is the primary timeshare brand of Marriott Vacations Worldwide Corporation. The brand comprises around 70 Marriott Vacation Club properties throughout the United States, Caribbean, Central America, Europe, and Asia. Marriott Vacation Club resorts consist of one, two, and three-bedroom villas, with more than 400,000 owners.

Travel + Leisure Co. is an American timeshare company headquartered in Orlando, Florida. It develops, sells, and manages timeshare properties under several vacation ownership clubs, including Club Wyndham and WorldMark by Wyndham, and provides timeshare exchange services, primarily through RCI.

<span class="mw-page-title-main">Casa particular</span>

Casa particular is a phrase meaning private accommodation or private homestays in Cuba, very similar to a bed and breakfast, although it can also take the form of a vacation rental. When the meaning is clear, the term is often shortened to simply casa. Today, many casas particulares are rented through online agencies, some specifically Cuban, and others that work worldwide.

Trading Places International (TPI) is a corporation located in Lake Forest, California. TPI provides a full spectrum of vacation services to vacation interval owners, resort associations, and resort developers. They rank third worldwide in independent vacation exchanges confirmed annually at hundreds of resorts. The company specializes in association and resort management, vacation exchanges, rentals, owner resales, traditional travel, and developer support offerings.

Short-term rental describes furnished self-contained apartments that are rented for short periods of time, usually by the month as opposed to annual rentals in the unfurnished apartment rental market. They are seen as an alternative to hotels. "Short Stay" rentals are an offshoot of the corporate housing market. Popular uses include vacation rental and relocation.

<span class="mw-page-title-main">Agoda</span> Thailand online travel agency or just Agoda is a Singapore online travel agency for hotels, vacation rentals, flights, and airport transfer. It is owned by Agoda Company Pte. Ltd., headquartered in Singapore, and it is currently a subsidiary of Booking Holdings.

HomeAway was a vacation rental marketplace. It operated through 50 websites in 23 languages through which it offered rentals of cabins, condos, castles, villas, barns, and farmhouses.

<span class="mw-page-title-main">Airbnb</span> Online platform for rental accommodations

Airbnb, Inc., based in San Francisco, California, operates an online marketplace focused on short-term homestays and experiences. The company acts as a broker and charges a commission from each booking. The company was founded in 2008 by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia. Airbnb is a shortened version of its original name, The company has been the subject of criticism for lack of regulations and enabling increases in home rents.

Wimdu, powered by HomeToGo, is an online marketplace for booking lodging, accessible by website and mobile app for iOS and Android. The company does not own any lodging; it is merely a broker and receives commissions from every booking. It is set up as a "clone" of similar websites. Wimdu searches and redirects users to the website that has the relationship with the lodging provider such as Expedia,, HomeAway, Vrbo,, TripAdvisor, FlipKey, and Airbnb.

FlipKey is an online vacation rental marketplace. It is a subsidiary of TripAdvisor. In 2016 the company listed more than 300,000 properties in 179 countries. Its headquarters is in Boston, Massachusetts, United States.

Vacatia, founded in 2013 and based in San Francisco, California, spun out of Vacation Listing Service Inc., launching originally as an online marketplace for buying and selling timeshare interests.

CanadaStays is a Canadian online marketplace for short-term vacation rental properties, with over 250,000 cottages, cabins, chalets and condos available to rent across Canada, the US, the Caribbean, Mexico and South America. Founded in Toronto in 2008, CanadaStays has since become Canada's largest vacation rental marketplace, with over $24MM in bookings reported in 2017.

<span class="mw-page-title-main">Guesty</span> Property management software

Guesty is a property management software. It is used by property managers to manage short-term rentals listed on multiple platforms such as Airbnb, Vrbo, and

Vrbo operates an online marketplace for vacation rentals. It was originally known as Vacation Rentals by Owner or VRBO. It is headquartered in Austin, Texas and is owned by Expedia Group.


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