The short-term rental (STR) sector in the UK has experienced a surge in growth over the last decade, expanding 16 times faster than the hotel industry, according to new data analyzed by Property Management Software (PMS) specialist RMS Cloud.
The sector saw a 90.7% increase in the number of businesses, rising from 3,780 in 2013 to 7,219 in 2023—a significant boost of 3,430 new STR businesses.
In stark contrast, the hotel sector experienced a modest 5.6% growth over the same period, with the number of businesses increasing from 12,385 to just 13,080, an addition of only 695 new hotel operators. This disparity reflects shifting traveler priorities, as more people seek environmentally friendly, experience-driven accommodations that offer greater space, privacy, and practical amenities.
With staycations on the rise, particularly as a third of Brits are expected to vacation within the UK this year, the preference for alternative lodging options is growing stronger.
Out of the 382 local authorities across the UK, 260 saw an increase in STR businesses, averaging 13.2 new businesses per region.
Conversely, only 154 local authorities experienced growth in the hotel sector, with an average of just 4.6 new hotel operators per region.
The campground sector has also seen a notable increase, with the number of campgrounds rising by 35%, from 2,495 in 2013 to 3,375 in 2023. This boost of 880 new sites points to a broader trend of travelers seeking outdoor and eco-friendly travel experiences.
RMS Cloud’s managing director, Zen Valli, highlighted the significance of these trends for the hospitality industry, noting that while it’s widely known that STR businesses have been gaining traction, many are surprised by how stark the growth difference is compared to hotels.
“This is fantastic news for the STR and campground sectors,” Valli said. “The pressure is now on hotels to adapt to the shifting demands of today’s travelers who want more authentic experiences. Whether that means offering a more personalized, contactless service, or moving towards the aparthotel model where guests have kitchen and lounge areas for a more ‘home from home’ experience, hotels need to innovate to capture more of the market share.”
RMS Cloud is well-positioned to comment on these developments, as the company serves customers across various hospitality verticals globally, including hotels, short-term rentals, and campgrounds.
The data underscores a critical shift in traveler preferences, favoring experience-led accommodations that cater to evolving travel priorities. As the hospitality landscape continues to change, it’s clear that hotels must adapt quickly to keep pace with the expanding STR and campground markets.
