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UK Holiday Rental Property market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Holiday Rental Property market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

What you need to know

The number of domestic holidays taken in rental property increased by an estimated 3% to reach 7 million trips during 2016, ahead of the overall domestic tourism market, while an estimated 4.2-4.6 million holidays were taken in rental property abroad, a growth rate of 6% in line with the wider overseas market.

However, over the next 12 months, squeezed household finances and uncertainties over the impending Brexit process, coupled with the Pound’s weakness, look likely to dampen recent spending growth on holiday rental property, especially in the higher-value overseas segment.

In the longer term, prospects look strong: although growing regulation of the ‘sharing economy’ could put the brakes on current supply growth, Airbnb has already become a global ‘super-brand’ and rising distribution and marketing spend by the major online travel intermediaries should help to boost demand for this type of ‘home from home’ self-catering holiday.

Covered in this Report

Holiday rental property refers to holiday lettings includes cottages, houses, villas, gites, chalets, lodges, town/city apartments, flats or just rooms in a house. Self-catering apartments on holiday resort complexes (eg Butlins or package resorts abroad) or other types of self-catering property such as camping and caravanning or boat hire are excluded here.

Data on the size and segmentation of the domestic market is for Great Britain rather than the United Kingdom (ie Northern Ireland is not included), sourced from GBTS (Great Britain Tourism Survey). Equivalent data for the overseas rental market is not available, but rentals abroad are covered in Mintel’s consumer research for this Report.

Expert analysis from a specialist in the field

Written by John Worthington, a leading analyst in the Travel sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

There are significant opportunities for the incorporation of value-added products beyond basic bricks-and-mortar accommodation, and better integration of property rental within a more holistic holiday experience – in the shape of extra services within the property as well as activities (provided by professionals or peer-to-peer networks) within the destination itself. John Worthington
Senior Travel Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • 7 million domestic holiday rentals in 2016
            • Figure 1: Volume forecast for the domestic holiday rental property market, 2012-22
          • Overseas rentals spending up 15% in 2016 but slowdown expected
            • Figure 2: Annual percentage change in the total number of overseas holidays taken by UK residents, 2011-Q1 2017
          • Big brands consolidate market power
            • Figure 3: Leading holiday rental property providers in the UK market, by number of listings, May 2017
          • One in four adults rent holiday property
            • Figure 4: Types of holiday accommodation used in the past three years, April 2017
          • Airbnb surge takes market share to 17%
            • Figure 5: Sources used for booking last holiday rental property, April 2017
          • Visuals are the biggest influence on booking
            • Outdoor space, pool and ‘localism’ are key extras
              • Figure 6: Popular extras when booking holiday rental property, April 2017
            • What we think
            • Issues and Insights

              • Premium property potential
                • The facts
                  • The implications
                    • Room for specialist seniors brand
                      • The facts
                        • The implications
                          • Budget families book four- to six-day breaks
                            • The facts
                              • The implications
                                • Cross-selling/long-haul opportunities
                                  • The facts
                                    • The implications
                                      • Mixed-location, high-contrast holidays
                                        • The facts
                                          • The implications
                                            • Local food can help build bonds
                                              • The facts
                                              • The Market – What You Need to Know

                                                • Both domestic and overseas segments rise in 2016…
                                                  • …but flatter outlook for 2017, particularly for rentals abroad
                                                    • Independence day…
                                                      • …but security concerns are affecting travel flows
                                                        • South West/Spain dominate UK/overseas segments
                                                          • Sharing economy faces tighter scrutiny
                                                          • Market Size, Forecast and Segment Performance

                                                            • UK domestic rentals up by 3% in 2016
                                                              • Figure 7: Type of accommodation stayed at on holiday in the UK in the past 12 months, May 2017 versus March 2016
                                                              • Figure 8: Trends in the volume and value of the market for domestic holiday rental property, 2012-22
                                                              • Figure 9: Volume forecast for the domestic holiday rental property market, 2012-22
                                                              • Figure 10: Value* forecast for the domestic holiday rental property market, 2012-22
                                                            • Overseas rentals up 6% in 2016
                                                              • Figure 11: Type of accommodation stayed at on holiday abroad in the past 12 months, May 2017 versus March 2016
                                                            • Long-term growth prospects stronger in overseas segment
                                                              • South West accounts for one in four domestic holiday rentals
                                                                • Figure 12: Number of domestic holidays taken in holiday self-catering* property, by region, 2012-16
                                                            • Market Background

                                                              • Households begin to feel the squeeze
                                                                • Figure 13: UK average weekly earnings (excluding bonuses)* vs CPI inflation, percentage change year on year, January 2014-April 2017
                                                                • Figure 14: Expected impact of UK vote to leave the EU on wider economy and personal finances, February 2017
                                                              • Pound’s fall has had little impact on travel patterns
                                                                • Figure 15: Spot exchange rate, Pound Sterling versus selected currencies, May 2016-May 2017
                                                                • Figure 16: Trends in the number and value of domestic holidays taken by UK residents, 2011-16
                                                              • Overseas growth curve likely to flatten in 2017
                                                                • Figure 17: Trends in the number and value of overseas holidays taken by UK residents, 2011-16
                                                              • Independent travel to Spain surges by 14% in 2016
                                                                • Figure 18: Trends in the number of independent overseas holidays, 2011-16
                                                              • Security concerns could affect city break apartment sector
                                                                • Figure 19: Top 10 independently booked overseas holiday destinations, by number of trips, 2011-16
                                                              • Pressure mounting to regulate P2P property
                                                                • Urban listings could decline
                                                                  • Tax relief also under threat
                                                                    • Airbnb’s ‘buydeology’ stance
                                                                    • Companies and Launch Activity – What You Need to Know

                                                                      • Consolidation and globalisation
                                                                        • Airbnb hits 3 million listings and launches Trips product
                                                                          • HomeAway given marketing push
                                                                            • TripAdvisor makes fifth rental property purchase in nine years
                                                                              • Booking.com rental property listings up 48% in past 12 months
                                                                                • Wyndham stakes out territory in urban and premium sectors
                                                                                  • Tour operators ramp up presence in property rental space
                                                                                  • Market Share

                                                                                    • Market continues to consolidate
                                                                                      • Figure 20: Leading holiday rental property providers in the UK market, by number of listings, May 2017
                                                                                    • Airbnb hits 3 million listings
                                                                                      • HomeAway benefiting from Expedia marketing clout
                                                                                        • TripAdvisor growing incrementally through acquisition
                                                                                          • Booking.com has instant booking advantage
                                                                                            • TUI launches new villa site
                                                                                              • Wyndham dominates UK cottage and lodge sectors
                                                                                                • Other domestic companies
                                                                                                • Product Innovation

                                                                                                    • Airbnb evolving into full travel provider
                                                                                                      • Luxury rentals and P2P-plus
                                                                                                        • P2P future possibilities
                                                                                                          • Wyndham lodge brands go back to nature
                                                                                                            • New villa package focus from leading tour operators
                                                                                                            • The Consumer – What You Need to Know

                                                                                                              • Rentals is second-largest commercial accommodation sector
                                                                                                                • AB bias supports industry move towards premium rentals
                                                                                                                  • Airbnb is single largest booking channel
                                                                                                                    • Flexibility of duration is key
                                                                                                                      • Power of images
                                                                                                                        • Outdoor space, pool and localism are key incentives
                                                                                                                        • Use of Holiday Rental Property

                                                                                                                          • One in four adults have stayed in rental property in past three years
                                                                                                                            • Figure 21: Types of holiday accommodation used in the past three years, April 2017
                                                                                                                          • Holiday property has higher AB proportion than hotels
                                                                                                                            • Figure 22: Demographic profile of holiday rental property customers versus hotel leisure guests in the past three years, April 2017
                                                                                                                          • Room-only accounts for 7% of rentals
                                                                                                                            • Figure 23: Type of property stayed in for last holiday, April 2017
                                                                                                                        • Holiday Rental Property Booking

                                                                                                                          • Airbnb accounts for 17% of all holiday rentals
                                                                                                                            • Data points to sharp rise in use of third-party brands
                                                                                                                              • Figure 24: Sources used for booking last holiday rental property, April 2017
                                                                                                                            • Potential for third-party senior brand
                                                                                                                              • One-week booking still most popular but sector is adopting greater flexibility
                                                                                                                                  • Figure 25: Duration of last holiday property rental, April 2017
                                                                                                                                • Four- to six-night breaks for families on tighter budget
                                                                                                                                  • Over one in three short break rentals made via Airbnb
                                                                                                                                  • Holiday Rental Property Locations

                                                                                                                                    • One in five renters have been beyond Europe
                                                                                                                                      • Strong UK/overseas crossover
                                                                                                                                        • Figure 26: Holiday property rentals in the past three years, UK and overseas, April 2017
                                                                                                                                      • Clean air breaks
                                                                                                                                        • Dual-location opportunities
                                                                                                                                          • Figure 27: Location type of last holiday rental property, April 2017
                                                                                                                                        • Almost one in four rentals are in Spain
                                                                                                                                          • Figure 28: Destination of last holiday rental property abroad, April 2017
                                                                                                                                      • Holiday Rental Property Influential Factors

                                                                                                                                        • Photo/video is critical selling factor
                                                                                                                                          • Figure 29: Important factors when booking a holiday rental property, April 2017
                                                                                                                                          • Figure 30: Factors rated as ‘very important’ when booking a holiday rental property, April 2017
                                                                                                                                        • Customer review is king but official ratings are still of value
                                                                                                                                          • Women prioritise local amenities, men prioritise indoor tech
                                                                                                                                          • Holiday Rental Property Features and Services

                                                                                                                                            • Outdoor space is most popular feature
                                                                                                                                              • Importance of localism
                                                                                                                                                • Figure 31: Popular extras when booking holiday rental property, April 2017
                                                                                                                                              • Urban professionals under 35 keenest on activities
                                                                                                                                                • Family explorers
                                                                                                                                                  • Breaks for burn-out parents
                                                                                                                                                    • 21% of customers offer huge added-value opportunity
                                                                                                                                                      • Figure 32: Number of extra features/services selected, April 2017
                                                                                                                                                    • Staycation food packs
                                                                                                                                                      • Pet-plus properties
                                                                                                                                                        • Figure 33: Popular extras when booking holiday rental property, by domestic versus overseas renters, April 2017
                                                                                                                                                    • Appendix

                                                                                                                                                      • Definitions
                                                                                                                                                        • Abbreviations