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

Want a job at McDonald’s? Now, it is as easy as talking to Alexa

McDonald’s Corporation introduced the world’s first voice-initiated job application process called McDonald’s Apply Thru. Now, job seekers can initiate the job application process through McDonald’s Apply Thru by taking to either Alexa or Google Assistant.

How McDonald’s Apply Thru works
The job application process begins with the applicants saying:
Alexa, help me get a job at McDonald’s.” 
or
“Google, help me get a job at McDonald’s.”
Then, the job applicants will need to answer a few basic questions, including their name, job of interest, and the location where they want to work.
Afterward, the job applicants will receive a text message with a hyperlink that will take the applicants to continue the rest of the application process.  
Where McDonald’s Apply Thru serve
McDonald’s Apply Thru is now available in nine countries, including the U.S., U.K., Canada, Australia, France, Germany, Ireland, Italy, and Spain. It will be made available to other countries in the coming months.
Why McDona…

Is today's market too tough for upscale restaurants?

Operating a restaurant is never easy, but is it particularly challenging for upscale restaurants?

Restaurants Unlimited Inc., for instance, which operates 35 fine-dining and “polished casual” eateries, filed for bankruptcy in Delaware last week. Earlier in June, the Four Seasons Restaurant, an iconic spot for power lunch in Manhattan also closed for business after its reopening within less a year.

Are these two examples an isolated case or the tip of the iceberg? Then, if upscale restaurants are struggling to survive in today’s market, what challenges are they facing?

The rising labor cost

According to the Bloomberg report, Restaurant Unlimited Inc. hires 50 salaried employees at the chain’s headquarter in Seattle, plus another 168 full-time and 1,885 part-time restaurant workers. The rising wages in Seattle, San Francisco, and Portland have resulted in a total of $10.6 million wage expenses in the fiscal year of 2019. Nevertheless, its revenue for the year ended in May dropped 1%, at $…

Suggestive Selling – All You Have to Do is Ask!! (By Nicole Lee)

A simple, relatively normal thing occurred while in the drive-through at Del Taco with my boyfriend the other day.After placing our semi-high maintenance food order, the person taking my order, in a forced monotone voice, unenthusiastically asks, “Would you like to add our new blah, blah, blah for dessert?”All my sweet-tooth-driven ears heard was “dessert” and I wanted something sugary to complete my four-course drive-through meal. My boyfriend asked if I wanted the donut thing they were trying to push, but I ended up going with a churro.As we received our food, my boyfriend told the server, “Good job on the upsell.”In which we received the same unenthusiastic “thank you” in reply. This all led to a discussion about suggestive selling, how easy it is, how to do it correctly, and how beneficial it is.Of course, this Del Taco drive-through upsell experience did not meet our standards of how to do it correctly, but it worked!

Easy-Peasy
Both my boyfriend and I have sales and hospitality ba…