Is Britains holiday let business on the decline as more Brits opt for cheap package holidays

Britain's surge in staycations appears to be dwindling, marked by a notable decline in bookings for short-term holiday rentals. 

This trend contrasts sharply with the boom experienced in recent years, particularly during and directly after the pandemic, when domestic tourism flourished, driving up rental rates significantly. 

Various factors contribute to this downturn, including the escalating cost of living, unfavourable weather conditions, lack of regulation and consumer protection, coupled with an oversupply of holiday lets saturating the market across cities and seaside destinations alike. 

One holiday cottage company in Cornwall, notes a staggering 80% decrease in demand during January and February compared to the previous year. 

They attribute this decline partly to the inclement weather and the abundance of holiday rentals saturating the market, a consequence of many individuals seeking quick profits amidst the the uncertainty of the private rented sector. 

Data from AirDNA reveals a substantial increase in short-term let listings in the UK, with 342,000 available over the 12 months leading to February 2024, representing a 19% rise from the previous year. 

This surge in supply is echoed  in Scarborough, North Yorkshire, where the number of Airbnb listings has soared from around 200 to 1,000, contributing to a notable decrease in demand for the average three-bedroom rental apartment. 

The oversupply issue extends beyond seaside destinations, impacting London as well. A short-term rental provider, reports a 21% decrease in booking values across its portfolio of over 500 properties in the capital compared to the same period last year. This decline in bookings compounds existing challenges for the holiday-let industry, exacerbated by increased government regulation and the discontinuation of tax relief from April 2025, as outlined in the recent budget announcement.

Coupled with heavily discounted holidays abroad being offered by the larger travel providers trying to rebuild business after covid, the budget friendly staycation is being fast out bid by cheap deals abroad.

To address the issues of hokidayvlets flooding the market and depleting the long term rental stock, new regulations for holiday lets in England are set to be implemented, including a mandatory national registration scheme and enhanced council powers to regulate short-term lets through the planning process.

A notable shift in consumer behaviour towards cautious spending, preference for value-driven experiences and the new fear of Holiday let fraud, where people have booked what they believe to be their accommodation, but on arrival it doesn’t exist, is fuelling to return to traditional package holidays protected by ATOL.