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The Rise of Vacation Rentals

Beach Homes
Allianz - Beach Homes

Vacation rentals were once the “mom and pop shop” of the travel and tourism industry. Perhaps while growing up your family rented the same Cape Cod cottage or Outer Banks beach house every year on a handshake deal. It worked the same if you were a single, a family of four or a group of friends who vacation together every year. You brought your own towels and sheets, and the refrigerator became a community ice chest of shared condiments and snacks, passed renter to renter.

Those days have changed. Vacation rentals are now a $100-billion-plus industry, where more providers and different business models compete against each other and hotels for your tourism dollars. If you’re someone who values choice and services catered to your lifestyle, then you’re in luck.1

Here is a look at modern day options for vacation rentals, from the type of accommodation to the company providing it. But before we start breaking down vacation rentals, let’s take a closer look at how they stack up against a lodging option you might be a bit more familiar with: hotels.

Vacation Rentals vs. Hotels

Some travelers simply can’t say “no” to valet parking, having a bellhop whisk your bags away to your suite, indulging in room service — complete with tiny ketchup bottles — and having their rooms made up each morning like they were never there. Yes, staying in a hotel comes packed with conveniences. But vacation rentals offer advantages that are simply tough to duplicate in your traditional motel, hotel, and resort.

For starters, take space. Hotels often don’t measure up, offering on average 325 square feet compared with the 1,300 square feet that the typical vacation rental offers.1

But vacation rentals don’t just offer more space, it’s the freedom, too. These larger homes and condos allow you to march to your own beat, setting meal times and recreation schedules when you see fit. Hotel rooms have a tendency to seemingly shrink over time, especially once you reach the fifth or sixth day of a weeklong stay and 300 square feet feels more like a rented walk-in closet. And if you’re looking to bring your pooch on vacation, you’ll have many more options for Fido — and plenty of room to play fetch.

This brings us to value. With an average price of $124 and much heftier rates when you look at in-demand destinations, long stays can add up quickly.3 When you take the average rate for rental homes — roughly $1200 for a summer vacation rental in Myrtle Beach and $1800 in San Diego per week — rental properties are just tad bit pricier than hotel rooms.4 However, when you consider the extra rooms and occupancy potential of vacation rentals, it’s easy to do the math and see how a large home divided up among family and friends is much more cost effective than staying in several separate hotel rooms.

With the exception of suites and extended stay hotels, hotel rooms are often ideal for shorter stays for solo travel, couples, and even the kiddos. But vacation rentals embrace the phrase, “the more the merrier,” providing groups the privacy, comforts, and amenities that make them feel like a home away from home.5

Types of Vacation Rentals

When you imagine a vacation rental, you may immediately conjure up the picture of a spacious beach house outfitted with nautical décor, sand-proof furniture, and outdoor showers. Or may you think of a private chalet at the foot of the ski trails, featuring a wood-burning stove and an inviting hot tub. Vacation rentals come in a number of shapes and sizes, from bungalows to beach houses, and cabins to castles. Depending on the size of your party and budget — and your location — you may find that a cozy studio apartment is the right fit you’re your solo adventure through Prague or an estate is the right home base for your extended family trip to Northern Italy.6

Vacation Rental Services

It used to be that you call the phone number on the sign in front of a rental property to book it. But now, there are ever-growing online options for discovering rental properties, some casting wide nets of interest while others appeal to a particular niche.

• Airbnb
This sharing economy darling connects travelers to property owners looking to rent out rooms, entire homes, pool houses, castles and more. Dreamed up on an actual air mattress, this startup-turned-thriving enterprise now boasts more than 3 million listings in more than 190 countries. Airbnb is now offering Experiences, too, in which guests can pair stays with everything from making ramen from scratch with a chef to attending a secret, underground concert.7

If you want to know the story of the vacation rental boom over the past decade, simply follow the history of HomeAway. The company acquired booking site VRBO (which is still a booking site) in 1996, grew a ton, and then sold to Expedia two years ago for nearly $4 billion. HomeAway users book entire homes, a point of differentiation from Airbnb, as they have the total run of the property, providing more privacy, no bathroom sharing, and no surprise owner pop-ins.8

• Other vacation rental options
As vacation rentals grow in popularity, they’re becoming much more niche. Take One Fine Stay, which caters to a higher end crowd with a 24/7 local Guest Services team in select cities such as London and Rome.9 Kid & Coe offers kid-friendly vacation homes, complete with high chairs, an ample supply of toys and even babysitter suggestions.

You can also check with local realtors and property management companies, as well as homes rented directly through the owner for even more rental property options.

Vacation rentals are becoming a part of more and more travelers’ vacation plans for a big reason: they feel like home. If you feel like getting away from the traditional hotel accommodations, a vacation rental might be the fresh escape you’re looking for.  

Mike Ward is a copywriter, family columnist and sometimes comic who lives in Richmond, Va. with his wife, two young kids, and two mutts. He likes long road trips and rooting for losing sports teams. 

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Aug 01, 2017