The Rise of the U.S. Vacation Rental Industry: Growth, Trends, and Insights
The vacation rental industry in the United States leads the global market, showcasing incredible growth and innovation. By the end of 2021, the industry was valued at $15.1 billion, accounting for a fifth of the global market. Small businesses dominate the space, representing 70% of all vacation rental companies nationwide. This sector's appeal continues to expand, with projections indicating it could generate $17.66 billion domestically in 2022.
Professionally managed vacation rentals in the U.S. number nearly 2 million, supported by an estimated 25,000 management companies. These companies have been growing steadily, with an annual increase of 8.7%. The trend toward longer stays in larger properties, which gained traction before the pandemic, remains strong, with private, rural, and family-friendly accommodations in high demand.
Employment in the vacation rental industry contributes significantly to the economy. Over 730,000 individuals are directly employed, and the broader accommodation sector supports up to 1.8 million workers. Average wages in the industry reflect its growth, with accommodation workers earning $22.21 per hour as of 2022, and lodging managers averaging $31.82 per hour.
The industry has embraced digital transformation, with management companies investing heavily in online tools and platforms to streamline operations and enhance guest experiences. On average, these companies spend over $4,000 monthly on digital tools, highlighting their commitment to efficiency and innovation.
The post-pandemic landscape has shifted traveler preferences. Rural getaways and outdoor-focused destinations have gained immense popularity, with families more inclined to drive to their destinations and stay in private rentals. Unique accommodations like cabins, villas, and even treehouses are capturing travelers' imaginations.
Guests increasingly favor vacation rentals for their flexibility, privacy, and amenities. A majority of travelers with children cite the ability to cook their meals as a primary reason for choosing vacation rentals. Additionally, destinations near water remain top picks, with 83% of travelers seeking waterfront properties.
As the market continues to grow, investors and property owners find this sector lucrative. A significant percentage of buyers pay in cash and prioritize properties in resort, rural, or suburban areas. For many, the goal is not just investment but also creating a family retreat or supplemental income through rentals.
Overall, the vacation rental industry is thriving, continuously evolving to meet the changing demands of travelers, investors, and hosts alike. Its remarkable growth and adaptability position it as a cornerstone of modern tourism and hospitality.