III. Industry Analysis
Over the past five years, the Vacation Rental industry has grown steadily. Millennials are the major force in boosting the growth of the vacation rental industry. Rising expenditure on travel, vacations, and accommodation among this generation is fueling market growth.
Travelers in this demographic are more inclined towards vacation rental property over hotels owing to the comfort, low cost, and additional privacy of these accommodations. In addition, many rental properties accept pets for additional fees or a security deposit, and feature fenced back yards.
Additional key factors affecting the market include:
– Domestic trips by US residents: This industry is sensitive to changes in the number of domestic day trips and overnight stays. The more consumers travel domestically, the more likely they are to spend on tourism-related activities.
– Consumer Confidence Index: The Consumer Confidence Index measures consumers’ feelings regarding their current and future financial prospects. Changes in consumer sentiment have a significant impact on travel intentions, demand and expenditure, especially during recessions.
– Consumer spending: Consumer spending measures the total amount Americans spend on services and new goods, both domestically and abroad. When spending levels are high, consumers are more likely to spend on discretionary tourism and travel-related activities.