7 Vacation Rental Industry Trends to Watch in 2018

In an industry that’s constantly growing, changing and bringing in new legislation, we’re excited to see what 2018 brings.

Phocuswright already predicts the market will reach $36.6 billion by the end of this year, but what other vacation rental industry trends can we expect to see? Read on to find out our predictions for the coming 12 months.

1. Beach vacation rentals will remain top of the list

According to Tripping.com’s latest research, beach destinations are still number one on travelers’ lists for 2018. Although, it has to be noted that bookings are no longer exclusive to the big oceanside resorts. Property owners in lakeside locations are also in for fully booked spring/summer seasons, with lake searches growing 100% compared to other beach destinations last year.

We can attribute this increase to the fact that these rentals have significantly lower rates than traditional beach towns. Another reason could be the staycation effect – which sees more travelers staying closer to home for their summer break.

2. More guests will book direct – and more owners will encourage it

There is one key theme that continues to run through many vacation rental industry events, conferences and symposiums: the importance of direct bookings.

Generally, when guests book direct, not only do they get a better deal themselves, but owners also get to pocket a higher percentage of the takings. While hotels face fierce competition from aggregators and metasearch sites, the advantage they’ll hold on to for 2018 is the best price guarantee for booking direct – a tactic vacation rental owners can also utilize in their marketing.

Many properties have a markup on listing sites to counteract the booking commission – but if guests find homes direct and see the cost is a good percentage lower, they’ll be much more likely to convert. As an increasing number of private owners realize the need for a bookable, optimized website, they’ll steadily be able to work towards achieving listing site independence.

3. Luxury and celebrity travelers will champion vacation rental stays

In recent years, the public has been invited behind the scenes in Beyoncé’s Super Bowl Airbnb, Kim Kardashian-West’s $10,000 per night New York penthouse, and more recently, Serena Williams and reddit founder Alexis Ohanian’s lavish New Orleans wedding venue, courtesy of HomeAway.

Increasingly, famous travelers are opting for vacation rentals over hotels as they favor a more private and spacious stay – something which looks set to remain for 2018. The acquisition of Luxury Retreats by Airbnb in 2017 signaled to the world that the company has come a long way since its founding in a San Francisco bedroom.

Airbnb now boasts over 4 million listings, many of which are luxurious mansions in the most lucrative destinations. This expansion to a more luxury market means celebrities and other high-profile travelers now have their pick of the biggest and best properties at their disposal for their each and every travel need.

4. Despite regulation clampdowns, big cities will continue to attract more vacation rental bookings

In 2017, rarely a day went by that we didn’t see at least one major world city make headlines regarding restrictions in the short-term rental market. Paris, New York, Barcelona and Reykjavik are just a handful of cities which introduced new regulations for vacation rental owners.

That said, it’s unlikely that these regulations will have any real effect on vacation rental bookings. Tripping.com says that New York City is still their most popular urban destination when it comes to vacation rentals.

5. Non-traditional home bookings are on the rise

As well as motivating more owners to list their vacant property as a short-term rental, the recent vacation rental boom has also led to the diversification of offerings available. Last year, HomeAway reported a 55% growth in barn bookings, a 40% increase in houseboat reservations and a 30% boost in treehouse bookings compared with the previous year. Based on current booking figures for 2018, Airbnb states that nature lodge bookings are already up 700% from last year, ryokan (traditional Japanese inn) bookings have risen 600%, yurts have seen a 155% increase and RV reservations have grown by 133%.

Increasingly, travelers are demonstrating a strong inclination to book out-of-the-ordinary accommodation and these numbers show no sign of slowing down.

6. Politics won’t disrupt travel plans

Owners – there’s no need to panic. Even as political tensions continue to rise in some major cities, travelers will not let it affect their vacation plans for 2018.

Towards the end of 2017, a controversial referendum, multiple large-scale protests and a heated regional election couldn’t stop Barcelona from keeping its spot as one of the world’s top international destinations. Research from Tripping.com ranks the city as fourth in Europe and eighth overall when considering international booking trends for the year.

7. More properties than ever will become instantly bookable

When booking vacation rentals, guests are very much aware that if you snooze, you lose. For that reason, more travelers than ever are searching exclusively for rentals with instant booking. This is because instant booking offers them the confidence that will be no fear of missing out on a dream rental due to slow response times.

It’s no wonder, then, that almost half of Airbnb’s inventory is instantly bookable, along with over 60% of rentals listed on Tripping.com. In 2018, we’re likely to see an even bigger reduction in the time taken to make a booking, as more owners begin to understand the magnitude of the instant booking market.

Bonus: The vacation rental industry will continue to lead the way as an agent for social change

While 2017 was a great year for vacation rentals, it was a truly devastating year for the thousands of people whose homes and neighborhoods were destroyed by hurricanes, floods, fires and even terrorist attacks.

Fortunately, some of the big players in the industry have measures in place to help those most in need during these catastrophic situations. Both the Airbnb Disaster Response program and HomeAway Disaster Relief allow owners to offer emergency housing at little or no cost to affected victims.

Additionally, the accessibility of software and platforms designed specifically for short-term rentals will continue to empower people to start their own businesses and make a difference in their community in 2018. We have already seen great success stories from rural women in India who have opened their homes, earned income and helped revitalize their communities. A true example of what the sharing economy means, we’re sure we’re going to see a lot more of this in 2018.

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  1. Great insight into what’s in store for the vacation rental industry!

    I’ve owned my vacation rental for 25 years and have always booked directly with my guests. Until about 5 years ago, 95% of my inquiries from guests came from the large online travel agencies and then I’d book directly with them. I knew that these companies would all eventually switch to their current business model of online booking with a hefty commission so I got busy marketing my brand and driving traffic to my site.

    Currently, about 95% of my inquiries come directly from my site (www.FourSeasonsLodge.com) and my dependence on the large OTA’s is fading away.

    Thanks for encouraging all of us to keep plugging away at our businesses!

    Teena from gorgeous NH!

    1. You have done very well to do that, any ideas on how you did it? I get about a 3rd bookings from my own site but it gets harder to be independant.

      I hope to hear from you as I’m sure will many.

      Kind regards,


  2. Excellent points in this article; it is exciting to witness the rise of the short term rental industry. I would add that finding the correct insurance for your short term rental is imperative. Traditional homeowners insurance does not cover vacation rental business activities. Fortunately there are some great companies out there custom penning insurance for this situation. I know Proper Insurance completely replaces your current coverage and is backed by Lloyd’s of London. Read some reviews at https://www.proper.insure/

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