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News Article

Report: Value of UK holiday rentals

Rental guests spend around £4.5 billion

HomeAway Inc in conjunction with the London School of Economics (LSE), have released the first-ever comprehensive study measuring the economic impact of the holiday rentals sector in the UK market. Unique to the report, published on 2 December, is its analysis of key domestic destinations across the UK, specifically, North Yorkshire, Cornwall and London, whereas previous attempts to study the holiday rentals industry have focused solely on single destinations. 

The report estimates the total spend by holiday rental clients in the UK is over £4.35B per year, and responsible for creating over 95,000 jobs nationwide. Additionally, expenditure by tourists staying in self-catering accommodation grew faster than expenditure by tourists booking any other accommodation category. 

Domestic tourists staying in holiday rentals spent a total of £3.14 billion in 2012, while overseas visitors spent about half that amount; the total spent by holiday rental guests was around £4.5 billion. The estimate of 95,000 jobs comes from assuming that one job is created for each £45,000 of expenditure. 

Other highlights found within the research include: 

  • The holiday rental industry contributes an estimated £100M in tax revenue
  • Estimated gross income of all holiday rental owners in the UK is £950M. Owners spend approximately £450 million each year on employment and purchases relating to their rental property.
  • Net additional expenditure by holiday rental clients is estimated at up to £2.2B per year
  • 36% of holiday rental owners are likely to buy an additional rental home in the next five years 

There is no official figure for the total number of holiday rentals in the UK. This study uses a conservative estimate of 75,000 properties, which is based on a combination of official regional statistics and internet listings. 

Most holiday rental businesses are ‘micro-enterprises’ and an owners survey showed that almost 70% own only one rental. Motivations for purchasing rental properties were diverse—just over a quarter of surveyed owners said that the main reason they purchased a rental property was to provide a supplementary income. The other most commonly listed reasons include ‘as an investment’ and ‘for me and my family to use on weekends or holidays.’ 

"This report suggests that the holiday rental industry contributes to the UK economy by increasing tourism income and creating jobs. These effects are felt in regions across the country," said Kath Scanlon, Research Fellow at LSE. "Nationally, owners spend an average of about £1,600 per property on hiring employees. In Cornwall and North Yorkshire - two locations with underemployment issues - the figures are even higher. In these areas owners spend on average £2,500 and £3,000 respectively per property." 

"This is the first step in showing the significant value that the holiday rental market brings to the economy as a whole, as well as to individual communities which depend on tourism," said Erica Chang, UK Regional Director of HomeAway. "We are excited to be able to demonstrate this through figures that contribute to employment and local commerce." 

The report, of course, only looks at one aspect of rentals, giving figures for spending by owners and guests, but not looking at how this compares with the spending that would be made if the holiday homes were occupied by full-time residents. In parts of the UK such as Cornwall, second homes and holiday homes are controversial as local residents can be priced out of the housing market, and some rural villages can be largely unoccupied in the winter months. On the other hand, tourism can be a major source of income and employment during the summer. 

The survey of owners found that almost 70% of properties are rented for six months of the year or more. According to the survey, North Yorkshire had the largest proportion of properties rented for nine or more months, while in Cornwall, the seasonality of seaside locations was evident in the relatively high proportion of rentals only occupied between three and six months of the year (33.5%). When unoccupied, most properties (62%) are left vacant. Approximately 30% of rentals are used by the owners themselves or friends and family of the owner when not rented out. 

A press release, summary and the full report are available for download from the HomeAway website.

Article details

  • Author(s)
  • David Simpson
  • Date
  • 04 December 2014
  • Subject(s)
  • Tourism