Short-term rental market, Europe – How many people rent apartments each day?

1. Europe, Have you considered how many people rent apartments each day?

In 2024, the number of nights booked in short-term rentals increased compared to the same period in 2023:

• Q1 2024: 123.7 million nights were booked in Europe, a 28.3% increase from the same period in 2023 = 392.7k people per day rented apartments, based on my average rental period of 3.5 nights,
• Q2 2024: 208.8 million nights were booked in the EU, a 16.2% increase from the same period in 2023 = 655.6k people per day rented apartments, based on my average rental period of 3.5 nights in 2024,
• January 2024: 33.3 million nights were booked, a 16.7% increase from January 2023 = 307k people per day rented apartments, based on my average rental period of 3.5 nights,
• February 2024: 41.2 million nights were booked, a 19.0% increase from February 2023 = 420k people per day rented apartments, based on my average rental period of 3.5 nights in 2024,
• March 2024: 49.2 million nights were booked, a 48.0% increase from March 2023 = 453k people per day rented apartments, based on my average rental period of 3.5 nights in 2024:

Date Source: https://www.rentalscaleup.com/

Observation:

This growth implies that the public are increasingly confident in the short term rental market proposition and it’s unquietness.

This growth reflects a strong and consistent demand for short-term rentals, and indicates that the market has fully recovered from the disruptions of 2020.

Short-term rentals include apartments or rooms booked through platforms like Airbnb, Booking.com, and Expedia Group (inc. VRBO).

2. Why do People book short-term rentals? 3 key drivers include: 

Leisure travel:

Short-term rentals are a popular choice for holidaymakers, offering excellent value for money, flexibility,  and a more personalized experience. They can also be a good option for couples and families, in particular those with young children and large groups.

Business travel

Short-term rentals are increasingly being used for business travel, especially for those who are working remotely. Apartment rental accommodation is now considered a bona fide business expense.

Temporary solutions

Short-term rentals can be a good option for people who are not fully committed to staying in an area, but need a place to stay. They can be a good option for people who are in between buying and selling a home, for partners who are separated or divorced, for people who need a place to stay while their property is being renovated. This in particular represents an excellent option.

Short-term Rental bookers can be segmented into 8 types:

1. Couples,
2. Business travellers,
3. Digital nomads,
4. Solo travellers and eco-friendly explorers,
5. Last-minute bookers,
6. Travelers with disabilities,
7. Young families,
8. Large groups.

3. Why is the short term rental growing so fast?

The short-term rental market is growing rapidly for a number of reasons, including:

Online platforms:

The rise of peer-to-peer accommodation services like Airbnb, Expedia and Booking.com has made it easier for people to rent out their properties and for others to find short-term accommodation.

Flexibility and convenience:

Short-term rentals offer more flexibility and convenience than traditional options.

Affordability coupled with excellent value:

Short-term rentals can be more affordable than other options offering excellent value.

Space and privacy:

Short-term rentals often offer more space and privacy. They usually include amenities like full kitchens, private gardens and laundry facilities.

Remote work:

The demand for flexibility in remote working arrangements has contributed to the growth of short-term rentals.

Solo travel:

The rise of digital nomads and remote workers has increased the demand for convenient and affordable accommodations, such as studios and one-bedroom apartments.

Events:

Short-term rentals are increasingly popular for events such as weddings, festivals, and corporate retreats.

Other factors

Other factors that have contributed to the growth of the short-term rental market include: The development of the “sharing economy. The uniqueness of individual rentals. The desire for a more localized experience. The popularity of staycations.

4. Why is the short term rental continuously growing?

Short-term rentals are growing due to a combination of factors, including:

Online platforms:

Platforms development by Airbnb, Expedia and Booking.com have made mobile app’s easy for travellers to find and book short-term rentals. For property owners to list their homes. For travellers and property owners to communicate instantly.

Sharing economy:

Short-term rentals are part of the sharing economy, which is growing as people look for ways to use their assets for extra income.

Affordability:

Short-term rentals can are often a more cost effective option.

Authenticity:

Short-term rentals offer a unique and authentic experience that allows guests to feel like locals.

Tech-enabled:

The short-term rental industry has become more tech-enabled, with startups developing tools like noise monitoring systems, temperature control solutions, and keyless entry tools.

Post-pandemic behavioural shifts

The pandemic has led to changes in how people work and live, creating a need for more flexible housing options.

Short-term rentals are agreements that are usually less than six months long and are often booked through short let platforms.

5. What does the future hold for the short term rental market?

The future of the short-term rental market looks promising, with some predicting that it will be stable in 2024:

Demand:

The demand for short-term rentals is expected to increase due to remote work and international visitors.

Regulation:

The government is increasing regulation of short-term rentals to maintain fair competition and address housing shortages. Landlords will need to be aware of and adapt to local regulations.

Sustainability:

Property owners are adopting more sustainable practices to attract eco-conscious tourists.

Technology:

AI and machine learning are expected to continue to be used in the short-term rental industry.

Here are some other trends to consider:

• Global market: The global short-term rental market is expected to grow from $124.6 billion in 2024 to $477.9 billion by 2037.
• Online/platform-based rentals: This segment is expected to capture 65.5% of the market share by 2037.
• Investing: Investing in short-term rentals can be lucrative, with the potential for high returns.

Data Source: https://www.researchnester.com/

6. What is the future for the short term rental market?

The short-term rental market is expected to continue to grow, with some predicting that it will reach $315.18 billion by 2033. Here are some factors that are expected to contribute to this growth:

Data Source: https://www.precedenceresearch.com/short-term-rental-market/

Shifting travel preferences:

People are looking for flexible, affordable, and comfortable** accommodations, which short-term rentals can provide.

Increased demand for longer stays:

Remote work is likely to increase demand for longer short-term stays, especially among international visitors.

Growing interest in domestic travel:

Global travel uncertainties are increasing interest in domestic travel, which can boost the short-term rental market.

Regulatory changes:

Cities and countries are recognizing the economic benefits of the short-term rental market, and are adjusting zoning laws and tax regulations to facilitate growth.

However, the short-term rental market is also facing some challenges, including:

• Increased regulation:

The government is stepping up its regulation of short-term rentals to maintain fair competition and respond to housing shortages.

• Increased costs for landlords:

The short-term rental market is likely to become more difficult and expensive for landlords.

• Cultural values:

Some say that Western destinations need to reset their cultural values to prioritize human connection in order to compete with regions where welcoming guests is a way of life.

Short-term rentals – blog observations:

1. The market is strong, grown strongly and continued growth expected, all things being equal,
2. The market attracts a wide range of people booking, which means hosts should differentiate their listings from the traditional market options,
3. The market will attach new entrants, increasing competition and price competitiveness.
4. What are potential approaches for Hosts in staying competitive and successful?
5. Offer amenities that provide Home-from-Home experiences,
6. Use reliable, secure technologies and reputationally strong platforms to enhance and promote your proposition,
7. Keep up with and adapt to changing market conditions, and local regulatory requirements, adapting accordingly.

Gorgeous Apartments – December 2024