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Vacation rental is a term in the travel industry meaning renting out a furnished apartment or house on a temporary basis to tourists as an alternative to a hotel. Vacation rentals are becoming increasingly popular in Europe (especially in the UK) as well as in Canada. In some cities, like Barcelona, local authorities determined that vacation rentals were becoming a threat to the hotel industry and passed some legislation placing regulations and limits on the industry.

Pros and cons of vacation rentals:

In the United States, hotels often enjoy the advantages of brand recognition, familiar reservation processes, and on-site staff for problem resolution. For a guest, booking a vacation rental often meant stepping out of that comfort zone. Perceived cons of vacation rentals include having to communicate directly with the property owner, being unfamiliar with the property, lack of on-site staff, and concerns about quality or cleanliness.

However, there are many vacation rental agencies that manage vacation properties for owners and they offer many of the same services hotels offer to their guests, e.g., front desk check-in, 24-hour maintenance, in-house housekeeping, concierge service.

The benefits generally outweigh the potential negatives, with many vacation rentals offering more space (multiple bedrooms and bathrooms, separate living areas), more amenities (fully equipped kitchens, fireplaces, private hot tubs), convenient locations (on the beach, ski-in/ski-out) and greater privacy than a hotel. As of 2006, vacation rental management has become a $10 billion industry.

Vacation rentals can be a budget studio or an expensive private villa on a private island that runs more than $450,000 a week with a full staff to cater to the guests.

Vacation rentals are available in most states of the US including major tourist areas such as Hawaii, California, and Florida. The vacation rental market is larger in Europe than it is in the United States.