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Holiday Rental Property - UK - February 2014

“Further growth of specialist online intermediary rental companies and the increasing presence in the market of the established OTAs (Online Travel Agents) should help to feed growing demand. There is also a huge untapped supply of unused rental accommodation in the second homes market, because owners are unwilling or unable to let, even though many properties are left vacant for much of the year.”

– John Worthington, Senior Analyst

Some questions answered in this report include:

  • How can travel brands get further involved in the growing holiday property space?
  • How can the booking process be improved?
  • What are the market opportunities beyond the leading destinations?
  • What is the significance of the rise of the ‘sharing economy’ for tourism?

There were an estimated 9.9 million holidays taken in rental property during 2013, either in the UK or overseas. Privately owned accommodation has entered the tourism mainstream competing alongside hotels, holiday resorts and cruises.

Facilitated by online intermediaries, a growing number of second home owners are seeking to rent out their properties as an extra income stream, and, more recently, city residents have begun offering space in their primary residences for short-term let. However, the sector is often less clearly regulated than other forms of commercial accommodation and, in this most independent of travel sectors, companies often bear little responsibility for the quality of the holiday experience other than providing a channel between owner and renter.

This report analyses market trends and influential factors, looks at some of the leading companies involved and includes consumer analysis examining how many and what kind of people choose this type of holiday in the UK and abroad, where people go and how long they stay, how they book, what sort of facilities and services people look for when renting a holiday property and consumer perceptions, positive and negative. This is the first time Mintel has reported on this market.

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Table of contents

  1. Introduction

      • Definition
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Volume forecast of domestic holiday property rentals, 2008-18
              • Figure 2: Value forecast of domestic holiday property rentals*, 2008-18
            • UK holiday rentals up 38% in past five years
              • South West accounts for one in three domestic holiday lets
                • One in 10 holidays abroad are in rental property
                  • Market factors
                    • Overseas revival could derail domestic dominance
                      • Holiday home supply stalls since recession
                        • Challenge of peer-to-peer economy
                          • Companies, brands and innovation
                            • Half of bookings made through third-party companies
                              • Figure 3: How last holiday rental property was booked, November 2013
                            • Leading intermediaries
                              • Rise and rise of Airbnb
                                • OTAs see rental opportunity
                                  • Super hosts
                                    • The consumer
                                      • Previous rental experience
                                        • Figure 4: Use of domestic holiday rental property in the past three years, November 2013
                                      • Three in 10 overseas renters stay in cities
                                        • Figure 5: Location of last holiday in rental property, UK versus overseas holidays, November 2013
                                      • Overseas lets last longer
                                        • Figure 6: How long people stayed in holiday rental property for last visit, UK versus overseas holidays, November 2013
                                      • Walking distance to amenities required
                                        • Figure 7: Features people look for when choosing holiday rental property, November 2013
                                      • Consumers expect flexibility
                                        • Freedom and privacy seen as top advantages
                                          • Figure 8: Attitudes towards holiday rental property, November 2013
                                        • What we think
                                        • Issues in the Market

                                            • How can travel brands get further involved in the growing holiday property space?
                                              • How can the booking process be improved?
                                                • What are the market opportunities beyond the leading destinations?
                                                  • What is the significance of the rise of the ‘sharing economy’ for tourism?
                                                  • Trend Application

                                                      • Trend: Rebirth of Cities
                                                        • Trend: Creature Comforts
                                                          • Mintel Futures: East Meets West
                                                          • Market Drivers

                                                            • Key points
                                                              • Overseas holidays at highest level since 2009
                                                                • Figure 9: Overseas holiday volume, value and average expenditure, 2008-13
                                                              • Domestic holidays fall from 2009 peak but have still grown 14% over past five years
                                                                • Figure 10: Domestic (GB) holiday volume, value and average expenditure, 2008-13
                                                              • Package holiday upswing continues
                                                                • Figure 11: Volume of overseas package and independent holidays, 2008-13
                                                              • All overseas regions up in 2013 apart from North America
                                                                • Figure 12: Overseas holiday visits, by region visited, 2008-13
                                                              • Resurgent Spain
                                                                • Figure 13: Top 20 overseas holiday destinations, 2008-13
                                                              • Low-cost carrier growth supports holiday rentals sector
                                                                • Figure 14: Scheduled passengers carried, by main low-cost airlines, 2008-13
                                                              • Domestic serviced versus self-catering accommodation: trips
                                                                • Figure 15: Number of domestic trips* (pure holidays), by accommodation, 2010-13
                                                              • Domestic serviced versus self-catering accommodation: nights
                                                                • Figure 16: Total number of nights spent on domestic trips* (pure holidays), by accommodation, 2010-13
                                                              • Domestic serviced versus self-catering accommodation: spend
                                                                • Figure 17: Expenditure on domestic trips* (pure holidays), by accommodation, 2010-13
                                                              • Domestic serviced versus self-catering accommodation: short breaks and longer holidays
                                                                • Figure 18: Number of domestic trips* (pure holidays), 1-3 nights, by accommodation, 2010-12
                                                                • Figure 19: Number of domestic trips* (pure holidays), 4+ nights, by accommodation, 2010-12
                                                              • Second homes market abroad
                                                                • Spain and France account for nearly half of properties
                                                                  • Holiday rental growth in Spain
                                                                    • Figure 20: International tourism spend in Spain, by type of accommodation stayed in for visit, 2004-13
                                                                  • UK second home growth
                                                                    • Figure 21: Top 10 local authorities in England for second home ownership, 2013
                                                                  • Challenges of peer-to-peer economy
                                                                    • Spanish property regulation passes to regions
                                                                      • Airbnb rise attracts interest from officialdom
                                                                        • France and Germany reported to be considering restrictions
                                                                          • Property scams
                                                                            • Protection policies
                                                                            • Who’s Innovating?

                                                                              • Key points
                                                                                • SuperHosts
                                                                                  • Luxury rentals and unhotels
                                                                                    • Reverse auction
                                                                                      • Cottage/holiday park hybrid
                                                                                        • Local gurus
                                                                                          • Added extras
                                                                                            • Restoration properties
                                                                                              • Fairytale holidays
                                                                                              • Market Size and Forecast

                                                                                                • Key points
                                                                                                  • Total market size
                                                                                                    • UK market in context
                                                                                                      • Figure 22: Types of accommodation used for domestic holidays in the past 12 months, November/December 2013
                                                                                                    • UK market size
                                                                                                      • Figure 23: Volume of trips taken in domestic holiday rental property, 2008-13
                                                                                                      • Figure 24: Expenditure on trips taken in domestic holiday rental property*, 2008-13
                                                                                                    • UK regional share
                                                                                                      • Figure 25: Number of domestic holidays taken in holiday rental property, by region, 2012*
                                                                                                    • Overseas market in context
                                                                                                      • Figure 26: Types of accommodation used for overseas holidays in the past 12 months, November/December 2013
                                                                                                    • Overseas market size
                                                                                                      • Future prospects
                                                                                                        • Forecast
                                                                                                          • Figure 27: Volume forecast of domestic holiday property rentals, 2008-18
                                                                                                          • Figure 28: Value forecast of domestic holiday property rentals*, 2008-18
                                                                                                        • Forecast methodology
                                                                                                        • Companies and Products

                                                                                                            • Airbnb
                                                                                                              • Holidaylettings.co.uk
                                                                                                                  • Figure 29: Financial performance of Holiday Lettings Ltd, 2011 and 2012
                                                                                                                • HomeAway Inc (homeaway.co.uk, ownersdirect.co.uk)
                                                                                                                    • Figure 30: Financial performance of HomeAway UK Ltd, 2011 and 2012
                                                                                                                    • Figure 31: Financial performance of Owners Direct Holiday Rental Ltd, 2011 and 2012
                                                                                                                    • Figure 32: Total advertising expenditure HomeAway Ltd, 2010-13
                                                                                                                  • Thomas Cook
                                                                                                                      • Figure 33: Financial performance of Thomas Cook Group Plc, 2012 and 2013
                                                                                                                    • TUI
                                                                                                                      • Figure 34: Financial performance of TUI Travel Plc, 2012 and 2013
                                                                                                                    • Wyndham Vacation Rentals UK
                                                                                                                      • Figure 35: Financial performance of Wyndham Vacation Rentals UK, 2011 and 2012
                                                                                                                    • Cottages4you
                                                                                                                      • Figure 36: Total advertising expenditure Cottages4you, by media type, 2009-13
                                                                                                                    • Hoseasons
                                                                                                                      • Figure 37: Total advertising expenditure Hoseasons Holidays Ltd, by media type, 2009-13
                                                                                                                    • James Villa Holidays
                                                                                                                      • Figure 38: Financial performance of James Villa Holidays Ltd, 2011 and 2012
                                                                                                                      • Figure 39: Total advertising expenditure James Villa Holidays Ltd, by media type, 2009-13
                                                                                                                  • Channels to Market

                                                                                                                    • Key points
                                                                                                                      • Intermediaries account for half of bookings
                                                                                                                        • Figure 40: How last holiday rental property was booked, November 2013
                                                                                                                      • Domestic versus overseas bookings
                                                                                                                        • Figure 41: How last holiday rental property was booked, UK versus overseas holidays, November 2013
                                                                                                                      • Booking channels by location
                                                                                                                        • Figure 42: How last holiday rental property was booked, by location, November 2013
                                                                                                                      • Booking channels by duration
                                                                                                                        • Figure 43: How last holiday rental property was booked, by duration, November 2013
                                                                                                                    • The Consumer – Holiday Rental Property Usage

                                                                                                                      • Key points
                                                                                                                        • Untapped potential: six in 10 consumers have not stayed in rented property in the past three years
                                                                                                                          • Figure 44: Use of domestic holiday rental property in the past three years, November 2013
                                                                                                                          • Figure 45: Use of overseas holiday rental property in the past three years, November 2013
                                                                                                                      • The Consumer – Holiday Rental Property Locations

                                                                                                                        • Key points
                                                                                                                          • Seaside locations dominate
                                                                                                                            • Figure 46: Location of last holiday in rental property, November 2013
                                                                                                                            • Figure 47: Location of last holiday in rental property, UK versus overseas holidays, November 2013
                                                                                                                          • Young urban professionals lead growth in city property lets
                                                                                                                          • The Consumer – Duration of Stays in Holiday Rental Property

                                                                                                                            • Key points
                                                                                                                              • One-week stay still forms biggest chunk of market
                                                                                                                                • Figure 48: How long people stayed in holiday rental property for last visit, November 2013
                                                                                                                                • Figure 49: How long people stayed in holiday rental property for last visit, UK versus overseas holidays, November 2013
                                                                                                                              • New demand for long-duration city-based holidays
                                                                                                                                • Figure 50: How long people stayed in holiday rental property for last visit, by location, November 2013
                                                                                                                            • The Consumer – Preferred Features in Holiday Rental Property

                                                                                                                              • Key points
                                                                                                                                • Consumers seek amenities within walking distance
                                                                                                                                  • Figure 51: Features people look for when choosing holiday rental property, November 2013
                                                                                                                                • Greater flexibility required
                                                                                                                                  • Pool adds significant value to overseas properties
                                                                                                                                    • Figure 52: Features people look for when choosing holiday rental property, UK versus overseas holidays, November 2013
                                                                                                                                  • Cleaning and catering
                                                                                                                                    • Pet-friendly property important in domestic market
                                                                                                                                      • One in seven city renters seek single room in house
                                                                                                                                        • Figure 53: Features people look for when choosing holiday rental property, by location, November 2013
                                                                                                                                      • Those staying 8+ nights prioritise cleaning services
                                                                                                                                        • Figure 54: Features people look for when choosing holiday rental property, by duration, November 2013
                                                                                                                                      • Preferences by demographics
                                                                                                                                      • The Consumer – Attitudes towards Holiday Rental Property

                                                                                                                                        • Key points
                                                                                                                                          • Freedom and privacy seen as top advantages
                                                                                                                                            • Figure 55: Attitudes towards holiday rental property, November 2013
                                                                                                                                          • Inconsistency seen as leading disadvantage
                                                                                                                                            • Figure 56: Attitudes towards holiday rental property, UK versus overseas holidays, November 2013
                                                                                                                                          • Non-users concerned about ‘too much work’
                                                                                                                                            • Intermediaries seen as less good value than direct bookings
                                                                                                                                            • Appendix – Market Size and Forecast

                                                                                                                                                • Figure 57: Forecasts for domestic holiday property rentals volume, 2013-18
                                                                                                                                                • Figure 58: Forecasts for domestic holiday property rentals value, 2013-18
                                                                                                                                            • Appendix – Channels to Market

                                                                                                                                                • Figure 59: How last holiday rental property was booked, by demographics, November 2013
                                                                                                                                            • Appendix – The Consumer – Holiday Rental Property in the UK

                                                                                                                                                • Figure 60: Use of domestic holiday rental property in the past three years, by demographics, November 2013
                                                                                                                                            • Appendix – The Consumer – Holiday Rental Property Abroad

                                                                                                                                                • Figure 61: Use of overseas holiday rental property in the past three years, by demographics, November 2013
                                                                                                                                            • Appendix – The Consumer – Holiday Rental Property Locations

                                                                                                                                                • Figure 62: Location of last holiday in rental property, by demographics, November 2013
                                                                                                                                            • Appendix – The Consumer – Duration of Stays in Holiday Rental Property

                                                                                                                                                • Figure 63: How long people stayed in holiday rental property for last visit, by demographics, November 2013
                                                                                                                                            • Appendix – The Consumer – Preferred Features in Holiday Rental Property

                                                                                                                                                • Figure 64: Most popular features people look for when choosing holiday rental property, by demographics, November 2013
                                                                                                                                                • Figure 65: Next most popular features people look for when choosing holiday rental property, by demographics, November 2013
                                                                                                                                                • Figure 66: Other features people look for when choosing holiday rental property, by demographics, November 2013
                                                                                                                                            • Appendix – The Consumer – Attitudes towards Holiday Rental Property

                                                                                                                                                • Figure 67: Agreement with attitudes towards holiday rental property, by location of last holiday in rental property, November 2013
                                                                                                                                                • Figure 68: Agreement with attitudes towards holiday rental property, by how long people stayed in holiday rental property for last visit, November 2013
                                                                                                                                                • Figure 69: Agreement with attitudes towards holiday rental property, by how last holiday rental property was booked, November 2013
                                                                                                                                                • Figure 70: Agreement with attitudes towards holiday rental property, by most popular features people look for when choosing holiday rental property, November 2013
                                                                                                                                                • Figure 71: Agreement with attitudes towards holiday rental property, by next most popular features people look for when choosing holiday rental property, November 2013
                                                                                                                                                • Figure 72: Agreement with attitudes towards holiday rental property, by other features people look for when choosing holiday rental property, November 2013

                                                                                                                                            Companies Covered

                                                                                                                                            • Air Travel Organisers' Licensing (ATOL)
                                                                                                                                            • Airtours Holidays
                                                                                                                                            • Exodus Travel Ltd
                                                                                                                                            • First Choice Holidays & Flights Ltd
                                                                                                                                            • Headwater Holidays
                                                                                                                                            • HomeAway Inc
                                                                                                                                            • Hoseasons Holidays Ltd
                                                                                                                                            • James Villa Holidays
                                                                                                                                            • Mark Warner Ltd
                                                                                                                                            • Meon Villas Ltd
                                                                                                                                            • MyTravel Group plc
                                                                                                                                            • OMD UK Ltd
                                                                                                                                            • Rightmove Plc
                                                                                                                                            • Sentido Hotels & Resorts
                                                                                                                                            • Simply Travel
                                                                                                                                            • Teletext Holidays
                                                                                                                                            • Thomas Cook Airlines
                                                                                                                                            • Thomas Cook Group PLC
                                                                                                                                            • Thomson Holidays
                                                                                                                                            • TripAdvisor LLC
                                                                                                                                            • TUI Travel PLC
                                                                                                                                            • TUI UK
                                                                                                                                            • VisitEngland
                                                                                                                                            • Wyndham Worldwide Corporation

                                                                                                                                            Holiday Rental Property - UK - February 2014

                                                                                                                                            US $2,672.70 (Excl.Tax)