Vacation rentals are houses or apartments in tourist destinations that are generally leased to leisure travelers. The residence may have been bought specifically for this purpose, or the regular occupants may vacate it during some parts of the year. The guests will have full use of the residence, typically with utilities included but without servicing or meals. This approach can be cheaper than booking a hotel room or in some cases, several hotel rooms for the same length of time, especially if traveling with a family or other sizable group of people. Vacation rentals are often stocked with a variety of amenities to make your stay more enjoyable, including a private hot tub or swimming pool (without the noisy neighbors), a full-size kitchen (so you don’t have to dine out for every meal), laundry facilities (so you can pack light), etc. Contacting the owners directly is the ideal way to make arrangements as they can answer any questions you may have about the property. Vacation rental agencies that professionally manage locations are also a popular option as they can assure that the facility will be clean and available – and help find one.
Buying a second home might be an option.
Understand
A vacation rental is the renting out of a furnished apartment, house, or professionally managed resort-condominium complex on a temporary basis to tourists as an alternative to a hotel. The term vacation rental is mainly used in the US. In Europe the term villa rental or villa holiday is preferred for rentals of detached houses in warm climates. Other terms used are self-catering rentals, short term rentals, holiday homes, holiday lets (in the United Kingdom), cottage holidays (for rentals of smaller accommodation in rural locations) and gîtes (in rural locations in France).
Vacation rentals have long been a popular travel option in Europe (especially in the UK) as well as in Canada and are becoming increasingly popular across the world.
Advantages
Families traveling with children get privacy for parents, lower accommodation cost, lower meal cost, added together means stays can now be longer. A few extra days vacation makes a big difference.
Vacation rentals offer the comfort and privacy of a home so you can have a more relaxing, enjoyable vacation. In a traditional hotel, amenities such as swimming pools and laundry facilities are publicly shared, whereas in most vacation rentals, a private pool and laundry facility is included in the rate.
Almost all vacation rentals offer a private kitchen, which allows for cooking meals at home rather than going out to eat each day. This saves time and money on dining expenses.
Vacation rentals are often somewhat less to significantly less expensive than a hotel rooms and are great for groups and families who would otherwise have to pay for multiple hotel rooms. In some cases (especially at off-peak times of the year), a one-week rental of a 5-bedroom, 2-story vacation home can cost less than the rate of two or three nights in a regular, high-quality hotel.
The typical hotel room is 400 square feet (37 sq. meters); the average vacation rental is a 2,000 square foot house (186 sq. meters).
Amenities of vacation rental home communities often feature far more than what can typically be found in a hotel; namely such perquisites like a clubhouse, arcade, expanded business center facilities, sundry shops, and even a movie theater.
Disadvantages
While vacation rentals often tout that they are all-inclusive, this usually does not include daily housekeeping and maintenance service, which can be an inconvenience to visitors used to returning to a professionally cleaned room at the end of the day. And if something breaks during your visit, it is most likely your responsibility to call or hire someone who can fix it.
Vacation rentals typically tend to be situated within several minutes distance to the most popular area attractions or neighborhoods, but this isn’t always the case. Hotels are usually located much closer to the area’s main attractions as well.
The use of AirBnB-style home stay networks to convert existing local housing stock to “ghost hotels” has become controversial in many localities. Some landlords evict existing tenants to turn units into short-term vacation rentals, some tenants sublet apartments without their landlord’s knowledge or consent, some neighbours become less neighbourly after their quiet condominium block turns into a revolving door of loud or drunken transient visitors and existing hotels simply don’t want the competition.
Minimum stay time tends to be longer (often one week), an issue if you’re in town for just one night or one weekend. Cancellation policies are also less flexible; if you need to cancel or cut your trip short you may be out the cost of accommodations you are unable to use.
Understand how suitable the vacation rental and community is for you and your travel companions. Some rentals cater more toward adult clientèle (think smaller, more upscale accommodations), while others are very child/family-oriented (think colorful décor, lots of amenities, etc.)
Types of accommodation
Vacation rentals usually occur in privately owned vacation properties (holiday homes), so the variety of accommodation is broad and inconsistent. The property is a fully furnished property, such as a holiday villa, apartment, cottage, condominium, townhome or single-family-style home. Farm stay can encompass participation on a working farm, or a more conventional rental that happens to be co-located on a farm. The client/traveler arranges to rent the vacation rental property for a designated period of time. Some rent on a nightly basis similar to hotel rooms, although the more prevalent vacation rental industry practice is typically weekly rentals.
Vacation rentals can range from budget studio apartments to lavish, expensive private villas in the world’s most desirable locations, some with pricetags of many thousands per night and all the amenities you would find in any luxury accommodation (fully staffed, private beaches, boats, chefs, cooking lessons, etc.) to cater to the guests.
Some vacation rentals, particularly condominiums or apartments, offer many of the same services hotels offer to their guests, e.g., front desk check-in, 24-hour maintenance, in-house housekeeping, and concierge service. Many “hospitality, timeshare and premier independent resorts… that until now, access to these resort-condominium complexes was available exclusively through purchase options such as whole, fractional, or timeshare ownership,” are now offering daily vacation rentals.
At the other end of the spectrum are campervan and motorhome rentals.
Locations
Villa holidays are very popular in Europe, and main destinations include the United States Virgin Islands, Italy, Spain, France, Germany, Greece, and Turkey. In France, they are known as gîtes.
Vacation rentals are available in most states of the US and is prevalent in major tourist areas such as Florida, Hawaii and California, as well as in other coastal areas with beaches, where they may be referred to as beach houses, many of which are rentals. The vacation rental market is much larger in Europe than in the United States, and Florida is a popular destination for villa holidays for Europeans.
Comparison with other accommodations
Consumers unfamiliar with the concept of a vacation rental may confuse it with the seemingly similar, but distinctly different, timeshare. Many timeshare resorts offer quarter ownership, which provides 13 weeks of use or rental.
A timeshare can still be made available as a vacation rental should an owner decide to put his owned week(s) on a vacation rental program. Also, a large segment of the 21% of unsold and therefore still resort-controlled inventory is made available as vacation rentals. In 2014, this was a $1.9 billion business.
A timeshare is a piece of real estate—often a fully furnished condominium—that is jointly shared by multiple owners. While different types of timeshare ownerships exist, in general, each owner bears a portion of the responsibility, along with the right to a segment of time in which he or she is granted sole use of the property. Timeshare resorts allow financially qualified guests to rent and tour their unowned properties and then make those properties available to the guest for purchase. Timeshare owners can also choose to bank their week with an exchange company such as RCI or Interval International, or rent the unit.
Traditional hotels generally do not include vacation properties. However, some contemporary resort developments include shared ownership components such as villas and condominiums that can be either rented through the hotel or rented out by their owners either directly or through agencies.
Vacation rental market size
Evercore estimates the global addressable vacation rental market to be $100 billion, with two-thirds of the market “for rent by owner”.
Online, listing services, agencies and management companies
Vacation rentals and villa rentals are arranged either direct with the owner or through an agency, usually via the internet. Many owners have their own websites, but most also use listing services, which display property information and photos provided by the homeowner. Because each property owner has his or her own deposit and payment requirements, cancellation policies, key-pick-up procedures, etc., a guest contacts the property owner directly in order to book.
There are different kinds of listing sites, with different specialisms (for example, destination-specific, luxury, rural, etc.) and features (such as instant booking or loyalty programs).
In November 2015, Expedia bought HomeAway (which also owns VRBO and many other vacation rental brands) to compete with Airbnb .
There are also other online vacation rental sites that specialize in metasearch or resort residences.
In contrast, vacation rental agencies handle reservations and billing on the homeowner’s behalf, and there is no direct contact between the guest and the owner. Because the fee or commission charged to an owner by an agency is higher than that charged by a listing service, the rent tends to be higher.
There are also many management companies that organize all aspects of the rental on behalf of the owner, including property management, repairs service, keyholding and cleaning services. OneFineStay in a number of European cities and Interhome in many European leisure resorts are two of the best known. Wyndham Vacation Rentals of Wyndham Destinations, VACASA, and TurnKey Vacation Rentals are three larger vacation rental management companies operating primarily in the United States with some offerings internationally.
In the United Kingdom, villa holidays are also sold by tour operators as packages including flights and car hire. This is convenient for guests who prefer not to make their own arrangements, but may not be cheaper and does not usually allow the guest to choose a specific property.
Most property owners contract a vacation rental management company to manage their vacation rentals. These companies handle housekeeping and property maintenance. Some management companies also act as agencies, marketing the vacation rental property and handling reservations and billing. Most vacation rental management companies work on a commission basis, meaning they do not make a guarantee to the homeowner in terms of weeks that will be rented or revenue earned. Rather, they collect a commission ranging from 20% to 50% of any revenues generated.
An alternative arrangement is where vacation rental managers provide homeowners with a guaranteed rental. Under these arrangements vacation rental managers buy all of the weeks the homeowner wishes to rent in a single transaction. This provides the homeowner with guaranteed income, and puts the risk and management burden on the rental manager.
Travelers’ concerns
Some travelers avoid vacation rentals for fear of what industry insiders call SNAD: “Significantly Not As Described”. This refers to a property that looks like paradise in the photos, only to reveal leaky roofs and blocked views upon the traveler’s arrival. To reduce this risk, many vacation rental companies offer user reviews.
Another significant concern is that people may create false accounts, and advertise vacation homes which they do not in fact own. This can lead to unsuspecting customers booking and paying for a vacation, only to find on arrival that the rental does not exist. Given that the accommodation has been booked and paid for many months in advance, the culprit may disappear without trace, leaving the customer out of pocket.
Restrictions
In many counties, towns and cities, local authorities attempt to regulate or ban vacation rentals after complaints from local residents or competing lodging businesses. In the United States, New York City, Chicago and other cities have introduced restrictions on short term rentals, though regulation is not always strictly enforced. The City of Portland, for example, does not allow rentals of less than 30 days in residential zones; however, according to local vacation property managers such as Vacasa, the average guest stays 3-10 nights.
In most US cities and counties, zoning ordinances prohibit any type of lodging business in areas zoned for residential use. In some areas, zoning allows limited lodging uses provided that they are secondary to the primary residential use of the property.