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2011 presented some interesting insights into the vacation rental market on the whole. With the 1000-pound gorilla, HomeAway, we saw new features and attempts to increase user retention. AirBnB, the once rogue-now vogue vacation rental model, saw an incredible influx of both investment capital as well as user-base. But it also saw some unfortunate instances of rental fraud, abuse, and even violence. They apparently weathered the storm however and continue to help re-define the travel and tourism market.

The Vacation-Renter Index algorithm bases it’s findings primarily on several distinct key data inputs. Strictly speaking, 2011 proved to be an overall much more positive year than 2009 and 2010, although there are still great strides to be made. A lack luster economy has still dampened the domestic travel spirit, and rental price-points are still far below their peak during 06/07. Additionally, the hotel industry is beginning to mobilize against the vacation rental industry as a once small annoyance has now grown to be a serious threat to their long-term health. Cities such as New York and Ft. Lauderdale have had restrictions on short-term rentals placed upon them, and pro-hotel lobbyists are working overtime in trying to influence other local governments to do the same.

2012 should continue to see an increase in rental revenue and traffic, although district rental bans will also continue to rise. Cash-strapped cities are desperately looking for ways to retain their transient occupancy taxes any way that they can, and the regulated hotel industry is the easiest way to ensure that this is done. Whether or not this is the right thing to do is another debate, however expect things to get worse in this area before they get better.