Holiday Rental Property - UK - July 2015

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
A flat forecast for the UK holiday rental property market
Figure 1: Volume forecast for the domestic holiday rental property market, 2010-20
Figure 2: Value forecast for the domestic holiday rental property market, 2010-20
The UK holiday rental market has been flat since 2012
Figure 3: Volume of holiday rental properties used for domestic (UK) holidays, 2009-14
Expenditure on domestic holiday rental properties has risen sharply since 2012
Figure 4: Expenditure on trips taken in domestic holiday rental property*, 2009-14
Hotels performing well now as disposable income edges up
Figure 5: Number of domestic (GB) trips* in millions, by accommodation type, 2014
Short-stay UK rental holidays are growing in popularity
Figure 6: Length of stay on domestic (GB) trips*, by accommodation, 2010-13
Overseas holidays rise as consumer confidence grows, but rental property use dips
Figure 7: Overseas and domestic holiday volumes, 2009-14
Agencies continue to take the lion’s share of bookings
Figure 8: Methods for booking a holiday rental property, December 2014
Nearly a quarter of former renters have not hired a property in the last three years
Figure 9: Holiday rental property use on holiday in the UK and abroad, December 2014
City holiday properties are the most popular for longer-term holidays
Figure 10: Top three locations for last holiday in a rental property, December 2014
What consumers say about rentals will influence new bookings
Figure 11: Top five attitudes towards holiday rental property, December 2014
ISSUES AND INSIGHTS
Property owners may need to adjust portfolios to reflect market trends
The facts
The implications
Taxation for peer-to-peer rentals
The facts
The implications
Will the threat of peer-to-peer rentals to the traditional market continue unchecked?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Domestic travel is declining but there are some opportunities for holiday rentals
Overseas holidays are rising, however, rental properties will remain a challenging market
Short-stay holidays are the key opportunity for domestic holiday rental
MARKET SIZE AND FORECAST
Short-term decline but long-term growth
Figure 12: Volume and value forecasts for domestic holiday rental property, 2010-20
UK holiday rentals benefit from a rise in short-stay breaks
Figure 13: Types of accommodation used for domestic (GB) holidays in the past 12 months, 2013 and 2014
The domestic rental market has declined only marginally since 2013
Figure 14: Volume of trips taken in domestic holiday rental property, 2009-14
The amount spent on UK rentals grew by 5.5% during 2014
Figure 15: Expenditure on trips taken in domestic holiday rental property*, 2009-14
Devon and Cornwall are still a UK holiday rental hotspot
Figure 16: Number of domestic holidays taken in holiday self-catering* property, by region, 2012 and 2013
Overseas hotel bookings rise by 7 percentage points
Figure 17: Types of accommodation used for holidays abroad in the past 12 months, 2013 and 2014
SEGMENT PERFORMANCE
Self-catering properties are resilient in a declining market
Figure 18: Number of domestic (GB) trips*, by accommodation, 2010-14
Nights spent in self-catering accommodation declined by 3.5% in 2014
Figure 19: Total number of nights spent on domestic (GB) trips*, by accommodation, 2010-14
Expenditure on self-catering holidays increased in 2014
Figure 20: Expenditure on domestic (GB) trips*, by accommodation, 2010-14
Short-stay holidays in the UK increase 5% during 2014
Figure 21: Length of stay on domestic (GB) trips*, by accommodation, 2010-13
MARKET DRIVERS
Overseas holidays continue to rise as consumer confidence grows
Figure 22: Overseas holiday volume, value and average expenditure, 2009-14
Domestic holidays have declined 7.2% since 2009
Figure 23: Domestic (GB) holiday volume, value and average expenditure, 2009-14
Independent holidays abroad are growing, delivering opportunities for the rental market
Figure 24: Volume of overseas package and independent holidays, 2009-14
Holidays to cities in Italy, Belgium and the Netherlands are on the rise
Figure 25: Top 20 overseas holiday destinations, 2009-14
Budget travel options continue to be attractive to holidaymakers
Figure 26: Scheduled passengers carried, by main low-cost airlines, 2009-14
CHANNELS TO MARKET
Nearly one in four renters will book direct with the owner
Figure 27: How last holiday rental property was booked, December 2014
Single-room holiday rentals remain a small part of the market
Figure 28: Holidaymakers who have ever rented a room for a holiday while sharing the house with the homeowner, December 2014
KEY PLAYERS – WHAT YOU NEED TO KNOW
Competition between top two holiday rental listings agencies heats up
Technology developments support both renters and owners
Hoseasons introduces a new logo as well as a new luxury brand
MARKET SHARE
Airbnb success challenges the leading holiday rental agency
Taxation becomes an issue for peer-to-peer renters
HomeAway maintains the competitive advantage in terms of listings
Figure 29: Number of lettings, by holiday rental agency, as at May 2015
Negative PR stories could affect the rate of peer-to-peer rentals
Rental agencies increase their influence in the industry
LAUNCH ACTIVITY AND INNOVATION
Airbnb moves into the professional holiday rental sector
New apps and app updates benefit renters as well as owners
Figure 30: iOS apps offered by holiday rental agencies
Flexible pricing comes to the peer-to-peer rental sector
Hoseasons introduces a new logo and launches a luxury brand
THE CONSUMER – WHAT YOU NEED TO KNOW
The market has untapped potential in those who have never rented a property
City rentals are the most popular for long stays
Convenience and entertainment are the most appealing features for rental holidays
HOLIDAY RENTAL PROPERTY USAGE
Half of consumers have never stayed in a holiday rental property
Figure 31: Holiday rental property use on holiday in the UK and abroad, December 2014
Families with young children find rental property the most appealing
Figure 32: Holiday rental property use on holiday in the UK, by age of children in the household, December 2014
Holidaymakers aged 30-44 present an opportunity to tempt a new audience to property rentals
Figure 33: Holiday rental property use on holiday abroad, by age, December 2014
HOLIDAY RENTAL PROPERTY LOCATIONS
Holidaymakers use holiday rental properties to get away from it all
Figure 34: Location of last holiday in a rental property, December 2014
Renting properties in cities is more popular abroad than in the UK
Figure 35: Location of last holiday in a rental property, by holiday destination, December 2014
DURATION OF STAYS IN HOLIDAY RENTAL
One in five use holiday rentals for short breaks
Figure 36: How long holidaymakers stayed in holiday rental property during their last visit, December 2014
A quarter use rentals abroad for a longer holiday
Figure 37: How long holidaymakers stayed in holiday rental property during their last visit, by holiday destination, December 2014
City rentals are the most popular for longer holidays
Figure 38: How long people stayed in holiday rental property for last visit, by location, December 2014
PREFERRED FEATURES IN A HOLIDAY RENTAL PROPERTY
Transfers to holiday rental properties are appealing
Figure 39: Features people look for when choosing holiday rental property, December 2014
ATTITUDES TOWARDS HOLIDAY RENTAL PROPERTY
What holidaymakers say about a rental is influential for new bookings
Figure 40: Attitudes towards holiday rental property, December 2014
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Abbreviations
Fan chart forecast
Figure 41: Best and worst case forecasts for domestic holiday property rental values, 2015-20
Figure 42: Best and worst case forecasts for domestic holiday property rental volumes, 2015-20
Definitions