Skip to main content

Will home-sharing and luxury hotels recover sooner than other lodging products?

As more places are easing coronavirus restrictions, travel companies are getting ready to reopen their business. Yet, do people want to travel again soon? If so, who are the travelers?

 

STR (Smith Travel Research), a leading data analytics provider for the lodging industry, conducted an opinion survey about travelers’ attitudes towards different types of accommodation facilities based on their preference from the past experience. One assumption for such an analysis is that travelers tend to stick to the same kind of accommodation facility for their trips.

 

STR surveyed 2,391 respondents who showed interest in travel for leisure purposes from four English-speaking markets, including the U.S., Canada, U.K., and Australia. They were asked if they would take fewer, the same, or more trips over the next 12 months.

 

Using March 11th as the cutting point when the WHO (World Health Organization) declared a global pandemic, STR reported the changes in the propensity to travel by hotel segments, with some intriguing results:  

 

Luxury / superior class hotels

 

Before (March 11th): 24% would travel less; 49% would make about the same number of trips; 27% would travel more.

After (March 11th): The above number changed to 36%, 45%, and 19%, respectively.

 

Luxury hotels recover sooner post-pandemic

Mid-range quality hotels

 

Before: 24% would travel less; 61% would not change; 16% would travel more.

After: The above numbers changed to 42%, 45%, and 16%, respectively.

 

Standard / budget hotels

 

Before: 27% would travel less; 48% would not change; 25% would travel more.

After: The above numbers changed to 46%, 40%, and 15%, respectively.

 

Short-term rental / vacation rental / self-catering

 

Before: 29% would travel less; 46% would not change their travel plan; 25% would travel more.

After: The above numbers changed to 37%, 45%, and 19%, respectively.

 

Which segments will recover sooner than others? 

 

The short-term rental / vacation rental / self-catering segment appears to be least affected for post-pandemic travel. There was only an 8 percent-point change (29% vs. 37%) for the group who would travel less. In fact, Airbnb booking data has already shown a strong recovery in the U.S., Spain, and some other European markets.  

 

The above STR survey also reveals that there was only a 12 percent-point change (24% vs. 36%) for those who would travel less in the luxury / superior class segment. In the case of China where travel restrictions were lifted in April, data from Trip.com have already shown signs of recovery in short-haul trips and high-end hotels.

 


The reasons why some segments will recover sooner than others

 

Luxury and superior class hotels tend to have higher hygiene and cleanliness standards than lower-tier hotels. Additionally, hotels across different segments are running the record-low occupancy and average daily rate due to the coronavirus outbreak. It becomes more affordable to stay in luxury and superior class hotels now.

 

Meanwhile, it is important to note that STR only surveyed travelers about their attitudes towards leisure trips and that leisure travelers usually stay over the weekend nights (Fridays and Saturdays). The recent STR data have also shown a surge of occupancy over the weekends for certain submarkets.

 

The speed recovery of short-term or vacation rental, however, might seem contradictory to my earlier assessment. I expected that Airbnb guests might want to stay in chain hotels for standardized cleaning procedures/standards. It is plausible that the demand is driven by the leisure travelers, who usually travel with family members and may hence want to stay in well-equipped homes. Alternatively, it is also possible that a large number of new Airbnb bookings are for high-end facilities. Some doctors also believe certain measures, such as having a more extended vacancy period between stays, can substantially lower the risk of getting infected by COVID-19.

 

Do you see the reasons why short-term or vacation rental, as well as the luxury / superior hotels, will recover sooner than the other segments? Will the dynamic pricing strategies become even more essential in today’s lodging business when the demand is mostly driven by leisure travelers?


Note: This post is also available on MultiBriefs.com and HospitalityNet.org. The picture was downloaded from TravelandLeisure.com

 

Comments

  1. Bloomberg - Airbnb Joins Vacation-Rental Sites Seeing Surge in Demand (June 7, 2020) https://www.bloomberg.com/news/articles/2020-06-07/airbnb-joins-vacation-rental-sites-seeing-surge-in-summer-demand

    ReplyDelete

Post a Comment

Popular posts from this blog

Yammer: A Social Networking Site Exclusively for the Workplace

Effective internal communications among employees are related to some desirable organizational outcomes, such as robust morale, a clear vision, low turnover, and high employee engagement. The question is what platform can serve the purpose. This ABC News video introduces “ Yammer ,” an exclusive internal communication tool for companies. A user must use a valid company e-mail address to sign up for an account. Once an account is validated, the user will be led to the company page that is pretty much like a Facebook page. The difference is that only the users whose e-mail addresses share the same domain can see the wall and communicate with each other. I have no question about whether Yammer could be a useful internal communication tool for companies, but I just wonder: how many social networking sites do people need for communication? Why people have to “create” so many platforms or channels for “effective communications”? To many people, Facebook is only for “friends,” whe

The 7 Ps marketing mix of home-sharing services: Insights from over one million Airbnb reviews

The 7 Ps marketing mix framework is a widely used managerial tool that helps businesses identify the principal components of a service product. The 7 P elements include Product, Promotion, Price, Place, Participant, Physical Evidence, and Process.   The 7 Ps framework can assist marketers in making decisions regarding segmentation, positioning, and differentiation. Even for the same type of products with different brands, marketers can still drive higher sales through the improvement of a product’s marketing mix.     The empirical study about 7 Ps of home-sharing services   Building upon the 7 Ps marketing mix framework, I led a research team in a big-data, supervised machine learning analysis of over 1.14 million English reviews of 37,092 Airbnb listings in San Francisco (SFO) and New York City (NYC). We aimed to discover new meaningful business intelligence through the analysis of an immense quantity of online review information that is created by consumers in the cyber marketplace

Can leisure and work-from-home demand stimulate extended-stay hotel growth beyond COVID-19?

The lodging industry is   struggling   to fill the empty rooms in 2020. For months, U.S. hotels are running at an occupancy of 50% or lower.     Not every segment   suffers the same impact from the pandemic, however. Demand for   home-sharing  facilities had already bounced back over the summer. Airbnb reported a higher booking than last year. Marriott’s home-sharing arm is also doing well, seeing a sevenfold increase in booking over last summer.     Similar to what a residential rental or home-sharing facility   offers , guestrooms in extended-stay hotels also feature a full-size kitchen or a kitchenette. Extended-stay hotels are designed for travelers who want to stay at a “home” when away from home. A guestroom at the Residence Inn Miami Sunny Isles Beach   Extended-stay hotels vs. home-sharing facilities     Because COVID-19 is primarily transmitted through direct or indirect human contacts, people are highly encouraged to avoid unnecessary human interactions, leading to more   con