Demand for vacation rentals is on the rise. But why?

In 2021, Airbnb found that 44% of Americans had stayed in a short-term rental at least once over the previous 12 months. Globally, over 40% of all travelers prefer to use platforms like Airbnb, Vrbo, and Booking.com for accommodation instead of traditional hotels. This is a marked uptick compared to the previous decade.

A 2020 report by Statista found that 55% of travelers in the U.S. chose vacation rentals primarily because of the cost-effectiveness compared to staying in hotels. This makes STRs particularly appealing to families and groups. Similarly, Airbnb found that 56% of Millennial travelers and 47% of Gen-Z travelers said they prefer staying in vacation rentals over hotels due to the unique experiences and affordability.

There are several reasons behind this emerging trend. Here are some key reasons why STRs have become increasingly popular among people visiting Vermont:

1. More Space and Comfort

• Larger Living Areas: Many STRs offer more space than hotel rooms, including full kitchens, multiple bedrooms, living rooms, and private outdoor areas. This is particularly appealing to families, groups, or travelers who prefer a homier atmosphere. 26% of Vermont's vacation rentals are homes with 4+ bedrooms, according to data from Keydata Dashboard.

• Home-Like Amenities: STRs often come equipped with amenities like private kitchens, laundry facilities, and outdoor spaces, which allow travelers to live more like locals and have a more comfortable, self-sufficient experience. According to a 2021 Vrbo survey, 67% of travelers chose vacation rentals for the extra space, including full kitchens, larger rooms, and more privacy than what hotels offer.

2. Cost-Effective for Groups or Extended Stays

• Better Value for Larger Groups: For families, friends, or larger groups, booking an entire home or apartment can be more cost-effective than booking multiple hotel rooms. STRs allow the group to split the cost, making it easier to find affordable accommodations. In Vermont, the average vacation rental accommodates 6-7 people, according to data from Lighthouse.

• Discounts for Longer Stays: Many STR hosts offer discounts for extended stays (weekly or monthly rentals), which makes them appealing to travelers who need accommodation for longer periods, such as business travelers, remote workers, or people on extended vacations. Over 80% of Vermont's short-term rentals also provide furnished monthly rentals, according to data from AirDNA.

3. Local and Authentic Experience

• Immersive Travel: Staying in an STR often means experiencing the destination from a more local perspective. Visitors can enjoy the neighborhood, shop at nearby markets, and interact with residents, which enhances the authenticity of their trip and immerses into our local culture.

• Living Like a Local: Many travelers prefer the experience of living in a neighborhood rather than staying in a tourist-centric hotel area. STRs allow guests to live among locals and get a feel for the culture and daily life of the area, rather than feeling like a visitor in a commercial zone. "Vermont-ing" is a fun, new term used to encourage visitors to do as a Vermonter does.

• Supporting Locals: Travelers are becoming increasingly conscious about where their money goes. STRs support locals, as hosts are often small, local business owners or property managers. Travelers appreciate this direct contribution to the community by keeping their dollars local.

4. Privacy and Flexibility

• More Privacy & Relaxation: STRs often provide greater privacy compared to hotels, where guests might have to deal with crowded lobbies, the morning room service wake-up knock, noisy neighbors on the other side of the wall, or shared amenities. Having a private space with no shared walls and no other guests enhances the feeling of seclusion and relaxation.

• Flexible Check-In/Out: Many STR hosts offer flexible check-in and check-out times, making it easier for travelers with irregular schedules to plan their stays without worrying about rigid hotel policies.

5. Pet-Friendly Options

• Accommodation for Pets: Many STRs are pet-friendly, allowing travelers to bring their pets with them. This is particularly beneficial for pet owners who may struggle to find hotels that accommodate pets or those with higher pet fees.

6. New Experiences Unlike Anywhere Else

• Unique and Characterful Properties: STRs come in various forms, from historic homes to cozy cabins and modern mansions to rustic glampsites. They often offer more distinctive and charming options than standard hotel rooms. This appeals to travelers seeking a unique or memorable stay. 1 in 3 travelers report staying at unique STRs as being their reason for traveling.

7. Flexibility in Location

• Access to Non-Touristy Areas: STRs allow travelers to stay outside of traditional tourist hotspots, providing a different experience and the opportunity to explore new or less crowded areas.

• Variety of Locations: Whether in city centers, quiet rural locations, or off-the-beaten-path destinations, STRs offer a wide range of locations that may not be available with hotel chains.

Accommodations for All Occasions in All Locations

Short-term rentals appeal to a broad range of travelers because they offer flexibility, comfort, affordability, and a more personalized, local experience compared to traditional hotel accommodations. From more space and privacy to authentic cultural experiences, STRs meet the diverse needs of today’s travelers, making them an increasingly popular choice.

But we need hotels too. Both hotels and vacation rentals are integral to Vermont's visitor economy. Hotels and STRs serve complementary but distinct roles in tourism, and both are needed to meet the diverse preferences and needs of travelers.

While hotels provide consistent, service-oriented accommodations ideal for short stays and business trips, STRs offer a more home-like environment with unique, personalized experiences for longer stays and family travel. Together, they help meet the diverse needs of travelers and contribute to local economies, making both essential components of Vermont's hospitality ecosystem.

As of 2024, STRs in Vermont accounted for 3% of the housing stock and over 60% of the visitor capacity, according to data from the Vermont Department of Tourism & Marketing. While both hotels and vacation rentals provide capacity to welcome visitors, the more diversity in the types of accommodations Vermont destinations can offer, the greater diversity of visitors and future residents they will attract.

Sources:

Airbnb 2021 U.S. Traveler Study
https://www.airbnb.com/resources/hosting-homes/a/airbnb-travel-trends-2021-531

Skyscanner: Why Travelers Choose Vacation Rentals
https://www.skyscanner.com/news/why-vacation-rentals-are-more-popular-than-ever

Statista 2020 Report: U.S. Travelers Choosing Vacation Rentals
https://www.statista.com/statistics/1108593/usa-preference-vacation-rentals-vs-hotels/

Vrbo 2021 Family Travel Survey
https://www.vrbo.com/en-us/discover/family-travel

Airbnb Travel Preferences 2019 (Millennials & Gen Z)
https://www.airbnb.com/resources/hosting-homes/a/airbnb-travel-trends-2019-527

Airbnb Long-Term Stays Growth in 2021
https://www.airbnb.com/resources/hosting-homes/a/long-term-rentals-2021-trends-235

Skyscanner Unique Travel Experiences
https://www.skyscanner.com/news/why-travelers-want-unique-experiences

CBRE 2020 Report on Hotel vs. STR Performance
https://www.cbre.com/research-and-reports/Global-Hotel-Research

Oxford Economics: Economic Impact of Short-Term Rentals
https://www.oxfordeconomics.com/recent-releases/short-term-rentals-economic-impact