Cornell's case for consolidating the U.S. short-term rental market

Billions of dollars have flowed into tech-enabled, asset-light short-term rental operators in recent years without much success to date

Over 72 percent of all hotels in the United States are affiliated with large brands like Marriott, Hilton, IHG, and Hyatt. In contrast, the largest operator in the short-term rental market (STR), Vacasa, manages less than 1 percent of the total market. With around $53.5 billion in gross booking value, or about 25 percent of the entire U.S. lodging industry, the STR market presents an enticing consolidation opportunity.

Key takeaways

• Part of the journey requires building strong brands and operating capabilities, but that in and of itself requires significant time and capital, especially in lodging, where distribution and, increasingly, distinctive guest experiences are paramount;
• Eventually, the winners in this space can create world-class hospitality brands as renowned as Marriott, Hilton, and Hyatt in the traditional lodging space.

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