Trends to Watch in the European Vacation Rental Industry

The European short-term rental market seems to undergo sweeping growth and change each year. Booking rates have increased exponentially as the travel industry continues to recover from slowdowns earlier in the decade. And more traditional travellers are being swayed by the convenience and charm of rental houses, cottages, and parks.

Going into 2025, short-term rental property managers strive to keep up with global and local trends that fuel industry growth. There has been plenty of activity on that front, informing how managers operate, promote, and maintain their properties. Here are five general recent trends influencing short-term rental managers in the EU and the UK.

Millennials Are Spending More on Leisure

By the end of 2023, leisure travel had increased by 22% over the previous year. Industry observers attribute the rise to Generation X and millennials, especially the latter. Vacation rentals in Europe currently make up 34.4% of the global leisure market.

The millennial generation puts more emphasis on having unique experiences than material possessions. With society in general back up to speed, they’re taking advantage of the renewed travel market and visiting virtually all regions of Europe. 

Short-term rental properties also support the “experience” prerogative. They offer more variety and amenities than traditional hotels.

Vacation Rentals Are Connecting Remote Destinations to the Tourism Industry

A generation ago, the tourism industry was dominated by urban centres with major travel appeal and accommodations. Out-of-the-way, remote parts of Europe were largely outside the mainstream travel circuit. Thanks to the emergence of vacation rental homes, that’s no longer the case.

Far-off places are more connected to tourism today. Tourists can now visit regions like Denmark’s Faroe Islands, Norway’s Lofoten Islands, the Azores archipelago in Portugal, Scotland’s Shetland Islands, and Ireland’s Aran Islands more easily. 

Again, the thirst for new experiences off the beaten path drives travellers to Europe’s hidden gems. Visitors are flocking to remote coastlines, tucked-away villages, rural communities, and mountainous regions.

A big reason these communities are getting more tourists is that the rental homes they stay in are already built. There’s no need for new hotel construction and the massive budget it requires. Vacation rental homes simply blend into the surrounding environment. The growth is also more sustainable than big-ticket hotels.

Short-term rental property owners and managers have a lot to offer travellers to these historically less popular locations. They can advise their guests on unique attractions and events happening in their communities for a taste of the local culture. They can also give insight into hidden trails, scenic vistas, and places only locals know.

Travellers Seek Authentic Experiences

Guests at short-term and vacation rental properties don’t seek typical tourist attractions. They’re more interested in authenticity — homes in touch with the surrounding community that reflect local flavour and colour.

Standardised resorts and impersonal hotels are falling out of favour. Instead, vacation rental guests stay in smaller accommodations in thriving urban centres and tucked-away neighbourhoods. 

Such places are more reflective of local lifestyles, letting travellers immerse themselves in the region’s culture. This drive toward authenticity has been a boon for the short-term rental market in general, which is now operating in full stride.

These kinds of guests seek experiences like farm tours, arts and crafts galleries, hyperlocal cuisine, wine tastings, walking tours, and even fishing and cooking classes. Short-term rental properties are far more suited to supporting authenticity, and world travellers are increasingly turning to them as ideal holiday accommodations. 

Regulatory Efforts Are Not Slowing the Vacation Rental Business

Recently, the EU held the short-term rental industry to new regulations, some of which mirror new regulations in the UK. Many of these new rules are cloaked in the goal of protecting customers and promoting sustainable practices. Others, however, are expressly to ensure fair competition with more traditional accommodations.

One of the main regulatory efforts is ensuring short-term rental properties get registered. Ostensibly, the goal here is to promote the enforcement of health and safety codes. Some local authorities are exercising more control over the growth of these properties. 

In England, legislators are seeking to give short-term rental properties revised “use codes” to distinguish them from standard residential homes. Legislators in Wales, for example, introduced new use plans for short-term rentals so local authorities have more control over their growth.

Vacation rental commissions in England, such as the UK Short Term Accommodation Association and Tourism Alliance, have expressed concerns that these advanced reforms could prevent growth in the industry. However, so far in 2024, that’s not happening. 

In the first quarter of this year, short-term rental bookings were up 28.3% from the year before, according to EU agencies. Inflation and interest rate stability support new residential rental units.

Other agencies are seeking to make the short-term rental market more transparent so local authorities can better obtain data on the properties. Residents, especially in places like Dublin where housing is scarcer, are concerned about how short-term rental properties might impact their communities. 

Online Booking Platforms and Smart Home Tech Are Getting Easier to Use

The biggest driver of short-term rentals, of course, is online booking sites. Airbnb, Booking.com, HomeToGo, and other platforms are faster and easier to use than ever before. 

Websites provide more seamless, user-friendly experiences for finding, comparing, and booking short-term rentals. Instant booking and upfront pricing are transforming online booking by the day.

Short-term rental managers are installing smart tech, including the following examples, in their properties to enhance the tenant experience and keep their properties safe:

• Smart Locks: Let guests check in, even remotely, without physical keys 
• Security Devices: Offer real-time monitoring so managers can feel more secure about their units 
• Household Tech: Allows visitors to personalise their stay 

Household technology options like smart thermostats and lighting systems also promote sustainability and allow managers to optimise energy use. 

CoverCat: Insurance and Guest Verification Services for European Short-Term Rentals

CoverCat is a company that offers insurance plans to protect short-term rental managers from guest-caused damage and for liability for guest bodily injury. We also provide guest verification services that can make your life easier and more convenient. Contact us online to find out more.