Holiday Property Investment in 2024

What is hot? What is new? The holiday property investment landscape has been evolving rapidly, influenced by shifts in travel trends, economic factors, and changing consumer preferences. The latest trends and developments in holiday property investment are fascinating and bring a plethora of new considerations in the sector.

1. Rise of Domestic Tourism and Staycations

• The COVID-19 pandemic sparked a significant rise in domestic tourism, and this trend continues to influence holiday property investments. Investors are increasingly focusing on properties in popular domestic destinations, such as coastal areas, national parks, and countryside retreats, which are appealing for staycations. Locations within a few hours’ drive of major cities are particularly attractive.

2. Demand for Sustainable and Eco-Friendly Properties

• Sustainability is becoming a key factor in holiday property investment. There is growing demand for eco-friendly properties that offer low environmental impact, such as those with energy-efficient features, solar power, and sustainable materials. This trend is driven by the increasing eco-consciousness of travellers, making green investments more appealing.

3. Technology-Driven Properties

• Smart home technology is transforming holiday rentals. Investors are increasingly equipping properties with smart locks, automated check-in systems, and energy-efficient smart appliances. This not only enhances guest convenience but also streamlines property management and reduces operational costs.

4. Flexibility and Multi-Use Spaces

• The rise of remote working has boosted demand for holiday properties that double as workspaces. Investors are capitalising on this trend by designing properties with dedicated office spaces, high-speed internet, and comfortable work environments. This hybrid model appeals to digital nomads and professionals looking for a change of scenery while working.

5. Short-Term Rentals and Platforms

• Short-term rental platforms like Airbnb and Vrbo continue to dominate the market, providing a lucrative income stream for investors. However, there is also a shift towards niche platforms catering to specific markets, such as family-friendly, pet-friendly, or luxury accommodations, allowing investors to target specific demographics more effectively.

6. Luxury and Unique Experiences

• The demand for unique and luxury experiences is on the rise. Properties that offer something different—such as boutique cottages, glamping sites, treehouses, or waterfront villas—are increasingly popular. Investors are seeking to create memorable stays that go beyond the standard holiday rental, appealing to travellers looking for something special.

7. Regulatory Changes and Compliance

• Regulatory scrutiny on short-term rentals is increasing in many regions, with stricter rules on licensing, tax compliance, and safety standards. Investors need to stay updated on local regulations and ensure their properties meet all legal requirements to avoid fines and maintain profitability.

8. Focus on High-Quality Amenities and Personalised Services

• To stand out in a competitive market, investors are focusing on high-quality amenities and personalised services, such as concierge services, private chefs, or curated local experiences. This approach caters to the growing demand for premium, hassle-free holiday experiences.

9. Investment in Secondary and Emerging Markets

• Investors are increasingly exploring secondary and emerging markets where property prices are lower, but tourism is growing. Regions that are less saturated offer the potential for higher returns and less competition. Areas with upcoming infrastructure projects, such as new transport links or tourism developments, are particularly attractive.

10. Fractional Ownership and Real Estate Crowdfunding

• Alternative investment models like fractional ownership and real estate crowdfunding are gaining popularity, making holiday property investment accessible to a wider audience. These models allow investors to purchase a share of a property, reducing the upfront cost and spreading the investment risk.

The Current Status

Holiday property investment is currently characterised by a focus on domestic travel, sustainability, technology, and unique guest experiences. In the UK, the domestic tourism market has surged, with staycation bookings up by 25% compared to pre-pandemic levels. This shift has driven demand for properties in popular domestic destinations, especially those within easy reach of major cities. 

Sustainability continues to be a significant trend, with 60% of travellers expressing a preference for eco-friendly accommodation, as noted in a Booking.com survey. This has led investors to prioritise green properties with energy-efficient features, such as solar panels and sustainable materials, to attract environmentally conscious guests.

Technology also plays a pivotal role in modern holiday rentals. Properties equipped with smart home technology can increase occupancy rates by up to 30%, as guests increasingly seek convenience and enhanced security. Additionally, the rise of remote working has created demand for properties with high-speed internet and dedicated workspaces, tapping into the growing market of digital nomads.

Unique and luxury experiences are a key differentiator, with 70% of travellers willing to pay more for unique accommodations, such as treehouses, glamping sites, and boutique properties, according to Airbnb’s recent trend report. Investors are capitalising on the short-term rental market, which is projected to grow at a compound annual growth rate (CAGR) of 5.5% globally from 2023 to 2028, as highlighted by a report from Market Research Future.

Going Forward

As investors try to figure out the evolving trends and regulatory challenges, staying ahead will be crucial. Keeping an eye on emerging markets, compliance requirements, and guest preferences will enable investors to make more informed and ultimately profitable decisions, ensuring they remain competitive in this dynamic market.