France Joins Spain, Italy, Greece, Portugal, and More to Lead Europe’s Unstoppable Luxury Rental Revolution of Last Year

France joins Spain, Italy, Greece, Portugal, and more as key players in Europe’s unstoppable luxury rental revolution. This surge has transformed the European travel landscape, highlighting how hotel investment in Europe and luxury hotel construction are evolving to meet growing demand. Countries like France, Italy, and Spain have been at the forefront of this growth, driving European hotel market trends and attracting high-end travelers from across the globe. With short-term rental options like Airbnb Europe gaining popularity, cities like Rome and Lisbon are reaping the benefits of this booming market. Notably, short-term rental Portugal has seen remarkable growth, especially in its luxury offerings. As Europe vacation trends continue to evolve, the hotel pipeline in Madrid is poised for expansion, catering to the upscale market’s needs. The growing demand for luxurious stays, whether in city apartments or coastal villas, is reshaping the tourism sector, with countries and cities in Europe embracing the rise of short-term luxury rentals.

Record-Breaking Nights and Explosive Growth

The numbers behind Europe’s luxury rental boom are staggering. According to official Eurostat data, 2024 set a new record with 854.1 million guest nights in short-term rentals, a number that highlights the unprecedented growth the sector has experienced. This surge in bookings has pushed the short-term rental market to heights never before seen, signaling the sector’s transition from a niche market to a dominant force in the global travel industry.

The most notable trends from 2024 also include a spectacular surge in bookings during the summer months. August 2024 alone saw a monumental 152.2 million guest nights, which represents a sharp increase compared to August 2019, where only 96.9 million guest nights were recorded. This explosive growth was mirrored by monthly trends throughout the year, with every month, except April, registering higher bookings compared to the previous year. Such strong and sustained growth underscores the transformation of luxury rentals into a mainstream option for travelers, outpacing even traditional hotel growth.

2025: Another Banner Year Begins

The momentum from 2024 shows no signs of slowing as 2025 opens with equally impressive figures. Early 2025 statistics provided by Eurostat confirm that 398.1 million guest nights were recorded across major booking platforms in the third quarter of the year. July alone recorded 148.5 million guest nights, marking a 10% increase over the previous year, while August reached 164.3 million nights, and September saw 85.3 million, reflecting a steady rise of around 8% year-on-year.

The strength of these early figures is a clear indication that Europe’s luxury rental market is on course to achieve even higher numbers in the future. This continuous growth is driven by rising demand for unique, upscale experiences that only the luxury rental sector can offer. Travelers are increasingly looking for accommodation that offers both comfort and exclusivity, and the luxury rental market is meeting that demand with a diverse range of properties, from penthouses in Paris to seafront villas in Greece.

Small Nations, Big Gains

While the overall numbers paint an impressive picture, the growth across various European nations is not uniform. Eurostat data reveals that smaller nations are seeing some of the most significant increases in rental activity. Malta, for instance, led the charge in the third quarter of 2025, with a remarkable 24% increase in guest nights compared to the same period in 2024. Similarly, Cyprus saw a 19.4% surge, while Sweden posted a 13.1% rise and Greece experienced a 12.3% increase in guest nights.

These figures highlight the ability of smaller and emerging markets to capitalize on the growing demand for luxury rentals. Malta, in particular, has experienced a transformation in its tourism offerings, with a surge in luxury rentals contributing to the island’s growth as a key player in the European luxury vacation scene. Targeted marketing efforts and the development of high-end rental properties have turned this small Mediterranean island into a luxury hotspot for travelers seeking a more intimate and luxurious European experience.

The Dominant Seven and Their Momentum

Despite the strong growth seen in smaller nations, Europe’s seven most visited countries—France, Spain, Italy, Greece, Croatia, Germany, and Portugal—remain the dominant players in the luxury rental market. In the third quarter of 2025, all seven countries recorded growth in guest nights, with Greece and Germany leading the way with double-digit increases of around 12%. Portugal also showed impressive growth at 9.6%, while Italy, despite its already large market, recorded a more modest increase of 5.5%.

These figures demonstrate that even in well-established markets, there is room for expansion. The blend of rich history, cultural heritage, idyllic coastlines, and luxurious accommodation options ensures that the top European destinations continue to captivate travelers from around the world. Whether it’s the vineyards of France, the beaches of Greece, or the historical monuments of Italy, these countries offer the perfect combination of opulence and authenticity, which appeals to luxury travelers year after year.

Spain’s Southern and Island Hotspots

Spain continues to shine as one of Europe’s leading luxury rental destinations. According to Eurostat data, the Andalusia region attracted a staggering 13.3 million guest nights in the second quarter of 2025, making it the most popular region in Spain. The Balearic Islands and Canary Islands also rank among the top destinations for luxury rentals in Europe, with their mix of glamorous beachfront villas, historical architecture, and vibrant nightlife.

The growth in Andalusia is particularly impressive, with a 23% increase in guest nights during the summer of 2024. This surge underscores Spain’s ability to blend cultural heritage with modern luxury, offering travelers the best of both worlds. From the stunning palaces of Seville to the cosmopolitan allure of Barcelona, Spain remains one of the most diversified and sought-after luxury rental markets in Europe.

France: Glamour Reigns Supreme

France, particularly its capital region, continues to reign supreme in the luxury rental market. Île-de-France, the region that includes Paris, recorded 9.0 million guest nights in the second quarter of 2025, while the Provence-Alpes-Côte d’Azur region saw 8.6 million guest nights. Eurostat data from 2024 also reveals that Provence-Alpes-Côte d’Azur experienced a 26.2% increase in guest nights, while Paris itself was the leading city in Europe for short-term rentals, with 23.5 million guest nights recorded.

France’s blend of luxury, culture, and sophistication makes it an irresistible destination for travelers seeking high-end vacation experiences. From wine estates in Bordeaux to luxury villas on the French Riviera, France offers an unparalleled array of vacation properties for those seeking the finest accommodations.

Italy: Eternal Allure Meets New Growth

Italy continues to attract affluent travelers seeking luxurious stays in its iconic cities and picturesque countryside. Eurostat data for the third quarter of 2025 shows that Italy’s guest nights increased by approximately 5.5%, which is modest compared to some neighboring countries, but still impressive given the already large size of its market.

Regions such as Lazio, Lombardia, Toscana, Sicilia, and Veneto remain top destinations, with Rome, the Eternal City, continuing to be one of the leading cities in Europe for short-term rentals. In 2024, Rome recorded 15.7 million guest nights, making it the second most popular European city for luxury rentals. Italy’s combination of ancient history, culinary excellence, and luxury villas ensures its continued place at the heart of Europe’s high-end rental market.

Croatia’s Adriatic Jewel

Croatia’s stunning coastline along the Adriatic Sea has become a major draw for luxury travelers. The region of Jadranska Hrvatska, in particular, recorded 9.6 million guest nights in the second quarter of 2025. This region, which includes cities like Dubrovnik and Split, has seen significant growth in recent years, with a 6.0% increase in guest nights compared to 2024.

Croatia’s turquoise waters, medieval architecture, and burgeoning luxury rental market have made it an attractive alternative to more established destinations like Italy and France. The country’s emphasis on high-quality properties and sustainable tourism has positioned it as a key player in the luxury rental market.

Portugal: Atlantic Sophistication

Portugal is gaining ground in the luxury rental market, with its mix of urban sophistication and rugged coastlines drawing luxury travelers from across the globe. Eurostat data shows that Portugal’s guest nights increased by 9.6% in the third quarter of 2025, with Lisbon and the Algarve region remaining two of the most popular destinations for luxury stays.

Lisbon’s blend of historic charm and modern amenities makes it a sought-after destination for those looking for high-end accommodations, while the Algarve offers stunning beaches and luxurious villas that are perfect for a relaxing getaway.

United Kingdom: The Boom in the UK

The United Kingdom has also seen a significant increase in demand for short-term rentals. Data from the Office for National Statistics (ONS) reveals that between July 2024 and June 2025, the UK recorded 93.8 million guest nights in short-term lets, representing a 10.2% increase from the previous year. Wales saw the highest growth at 12.4%, followed by England at 10.8%, Northern Ireland at 10.2%, and Scotland at 5.5%.

Cities such as London, Edinburgh, and Cornwall continue to attract luxury travelers, while rural areas benefit from the rise in demand for countryside retreats and seasonal accommodations. The UK’s diverse rental offerings make it a significant player in Europe’s growing luxury rental market.

Challenges Behind the Glamour

While the rapid growth of luxury rentals is a positive development for the tourism industry, it also presents challenges. Local communities have raised concerns about the impact of short-term rentals on housing availability and affordability. In popular destinations like Paris, Barcelona, and Amsterdam, the conversion of long-term housing into vacation rentals has led to rising rents and a shortage of homes for local residents.

The European Parliament has acknowledged these issues and is working to introduce measures to regulate short-term rentals more effectively. In 2024, the European Parliament approved new regulations that require rental hosts to register their properties, ensuring greater transparency in the sector. Local governments are also introducing measures to ensure that the benefits of luxury rentals are felt by both tourists and residents.

Analysis of the 2025 to 2026 European Luxury Rental Trend

As Europe’s luxury rental market continues its meteoric rise, the period from 2025 to 2026 is expected to witness even more robust growth. With countries like France, Spain, Italy, Greece, and Portugal leading the charge, this expansion signals a major shift in European tourism. Over the next year, this market is projected to grow exponentially as affluent travelers increasingly seek exclusive, high-end accommodations over traditional hotel stays.

Sustained Demand for Luxury Rentals

The rapid growth of short-term luxury rentals in Europe has been fueled by several factors, including a desire for privacy, exclusivity, and personalized experiences. These trends are not merely a passing phase, but rather a long-term shift in traveler preferences. The continued increase in international travel in 2025, despite global challenges, highlights the resilience and adaptability of this market. Experts predict that 2026 will see a continuation of this upward trajectory, with further expansion in new regions as well as established markets.

One of the key driving factors for this surge is the increased demand for space. After the pandemic, travelers have become more selective about the environments in which they spend their time. Luxury rentals provide a level of seclusion and comfort that traditional hotels struggle to match, offering everything from private villas with ocean views in Greece to penthouses in the heart of Paris. This demand for space is expected to remain a priority in 2026, with high-net-worth individuals gravitating towards accommodations that offer privacy, luxury, and additional services like private chefs, chauffeurs, and concierge services.

Growing Appeal of Lesser-Known Destinations

While cities like Paris, Barcelona, and Rome remain perennial favorites, 2025-2026 will likely see a notable rise in demand for less traditional luxury rental destinations. Smaller markets such as Malta, Croatia, and even parts of Scandinavia are expected to witness a significant uptick in short-term rental bookings. These countries have been quick to capitalize on the luxury rental boom by developing high-end properties and offering exclusive experiences. Malta’s 24% increase in guest nights in 2025 is a clear example of how smaller destinations are attracting wealthier travelers. As these regions build on their growing popularity, they will continue to experience growth in 2026 as more travelers seek out alternative, less crowded, but equally luxurious destinations.

In addition, the continued rise of private islands, remote luxury chalets, and eco-friendly retreats will further diversify the options available to those seeking luxurious, exclusive stays in nature. These types of accommodations offer travelers a chance to escape the crowded city life, aligning with the growing trend towards sustainability and wellness travel. As eco-conscious travel becomes more mainstream, destinations that promote sustainability through green building initiatives and off-the-grid locations will likely gain traction in 2026.

Regulation and Transparency

With the growth of luxury rentals, governments across Europe are beginning to tighten regulations to ensure the industry remains sustainable and beneficial for local communities. Cities like Paris and Barcelona, which have already implemented rental caps and registration requirements, are setting the stage for similar regulations across Europe. In 2026, more European countries and cities will likely introduce stricter rules regarding short-term rentals, including mandatory registration and limitations on the number of days a property can be rented. These regulations aim to strike a balance between encouraging tourism and ensuring that local housing markets aren’t negatively impacted by the influx of rental properties.

However, this increasing regulation may also present challenges for property owners and rental platforms. To stay competitive, they will need to navigate complex legal frameworks and comply with new rules. This may encourage the development of more official platforms and systems for luxury rental bookings, as governments work to create more transparency and enforce regulations more effectively.

Looking Ahead: Unrelenting Momentum

The luxury rental market in Europe shows no signs of slowing down. With continued growth across both established and emerging markets, a diverse range of high-end properties, and a strong demand from international travelers, Europe’s luxury rental sector is set to remain a key driver of the continent’s tourism industry. Policymakers and investors will need to focus on sustainability, regulation, and infrastructure development to ensure that the sector continues to grow responsibly and benefits all stakeholders.

The luxury rental boom is part of a broader tourism surge in Europe, with total nights spent in EU tourist accommodation reaching 3.08 billion in 2025. This growing share of short-term rentals reflects the shift in consumer preferences towards more personalized and exclusive accommodation options, reshaping the traditional hotel market and pushing the entire European tourism industry toward greater innovation and development.