Airbnb Inc.’s grip on the market for short-term home rentals is giving big travel portals like Expedia Inc. and Priceline Group Inc. a fast-growing challenge.

Expedia and Priceline have dominated hotel bookings for two decades. But with the vacation-rental industry rapidly expanding as a popular alternative to hotel stays, the online travel giants are betting big on the sector by boosting their inventory of home-rental options that can be booked similarly to a hotel, with just a few clicks.

The so-called private-accommodation market, which includes vacation rentals, homes or rooms rented out on a short-term basis, is about one-fifth the size of the hotel market based on revenue in the U.S., but it has been growing faster than hotels since 2015, according to data from travel industry-research group Phocuswright.

Revenue in the U.S. private accommodation market grew 11% last year from the year earlier, and is projected to grow 8% this year to more than $34 billion; the U.S. hotel industry grew 5% last year to $151 billion and is projected to do the same this year, according to the data.

As the vacation-rental sector has expanded, online intermediaries such as Airbnb, Priceline, Expedia and TripAdvisor have grabbed larger shares of the listings.
Airbnb remains the leader, particularly for rentals in urban locations, with an estimated 15% of global room nights in private accommodations last year, compared with 12% for Expedia and 9% for Priceline, according to Susquehanna International Group. But Priceline Group and Expedia are increasingly displaying vacation rental properties alongside hotel rooms on their sites. Executives said the goal is to provide travelers with the most comprehensive listings for any destination.