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