1 week ago
For consumers, the distinction between hotels and short-term rental accommodation may be apparent. But, for the hotel and vacation rental sectors, what was once black and white is becoming an increasingly grey area.
Historical hospitality business models have had to evolve, as have the industries that support them. As the sector transitions through its greatest reckoning, and new trends in the hospitality industry begin to emerge, the convergence of short-term rentals and hotel accommodation looks set to stay.
Adapting through the pandemic
Consumer demand for short-term vacation rentals has been steadily rising since their inception into the hospitality sector and this has now been accelerated by the pandemic. Consumers felt that short-term rentals provided a safer way to travel.
With fewer touch points, less traffic, limited contact, and no crowds, there was considerably less opportunity to contract Covid within the confines of a short-term rental property. Work from home mandates and online schooling meant that people could travel for longer periods, leading to a rise in business leisure travel, or bleisure, as it has become known.
With more freedom and more flexibility in the workplace expected to be one of the lasting by-products of the pandemic, bleisure travel is likely to continue for the foreseeable future. But what does this mean for hotels, and in particular those who have traditionally relied on business travel as one of their biggest performance drivers?
Short-term rental strategies are now also focused on competing with hotels for corporate business. There is growing short-term rental demand for properties that are professionally run, with hotel-like standards. The pandemic has shown that short-term rental businesses are beginning to standardise their services and operations to mirror that of hotels.
Hotels, too, are seeing an opportunity to tap into this market by investing in properties and apartments that can provide their level of service within the framework of rentals; adopting them into their brand as aparthotels. We’ve seen more and more hotels begin to explore the short-term rental arena, by introducing extended-stay packages, as they look to provide a home-away-from-home experience.
We know that the post-pandemic traveller is looking for more experiential, long-stay options, and seeks value in home-away-from-home accommodation options. While safety might have been at the forefront in the minds of most travellers during the peak of the pandemic, weight is now shifting towards better experiential value, centred around personal touches, service and interaction
Personal touches, synonymous with the short-term rental space, mean that hotels are having to look at ways to tailor their service offering. Concierge services, for example, are providing much more of a personalised 'host' experience, while amenities have also been enhanced to cater to the working traveller. Property managers of vacation rentals are looking more and more towards adopting similar services, structure and commercial strategies as hotels. This blend of hotel and vacation rentals means that traditional comp sets have shifted.
Two sectors converge
Distribution channels that once catered to a specific sector are now increasingly converging. For example, Airbnb started out solely in the vacation rental space, offering homeowners a short-term rental site to list their homes to travellers looking for alternative accommodation - now it also lists boutique hotels. Similarly, Booking.com and Expedia list vacation rentals as well as hotels, giving consumers more options than ever before.
The pandemic has provided an opportunity for hotels to explore the short-term rental arena, introduce extended-stay packages, and there is now evidence of more and more overlap. We have seen hotel chains offer short-term rental options, and property managers of vacation rentals are looking more and more towards adopting similar commercial strategies as hotels.
As the competitive space becomes increasingly tight, hotels and short-term rentals will need to be able to benchmark their performance even more effectively across the whole accommodation provision.
A data-driven solution
In an industry looking to rebound, the convergence of hotels and vacation rentals means that it is even more vital to understand the market and implement a comprehensive commercial strategy. Data insights that focus on just one or the other may not be able to provide the level of market intelligence needed to inform a complete commercial strategy.
A holistic commercial strategy needs to be based on actionable data sets that provide granular insights into the rapidly evolving accommodation landscape. It’s clear that the pre-established foundations and assumptions that supported the hospitality industry no longer apply. In a highly competitive market, revenue and property managers need to be able to make smarter business decisions based on consumer options to optimise the revenue of their listing.
With data from both the hotel and vacation rental space, there is greater opportunity for revenue managers to better understand the competitive landscape that they are operating in. Hospitality providers will be able to draw insights from a much bigger data pool, enabling them to decipher the demand patterns of the ‘post-pandemic traveller’, and benchmark themselves against their true comp sets.
Seeing the entire picture means that you are able to make better commercial decisions, backed by data, and become more dynamic with your rate strategies.
Source: OTA Insight
Data-driven strategies are the only way to stay competitive. By having a real-time overview of the complete market, you will be able to maximise your profitability across your entire business.
With greater insights into your compsets, and the competitive landscape, you can capably benchmark your property, enabling you to make the right decisions, at the right time.
You can also optimise your distribution strategies, monitoring which of your offerings generates most revenue, and on which channel. And, by measuring their performance, they can track where they are making gains, and where they can improve, and then respond with agility.
Location-specific, segmented demand insights serving both hotel and short-term rental industries, mean that revenue managers will be better placed to capture demand in the pre-booking stage, from a much wider pool. You will be able to see booking trends, and stay patterns across the market and be able to optimise your strategies ahead of your competitors.
Empowered with supply visibility you will have a better understanding of your compset and distribution behaviour, while rate comparison and demand insights will be able to uncover new opportunities to optimise your revenue, and grow your bottom line. In short, data adopters stand to make more.
Hoteliers and short-term rental businesses are now re-engineering their guest experience, by meeting client needs down to the finest detail. The acquisition of Transparent by OTA Insight allows you to integrate a huge wealth data insights and market intelligence of both hotel and short-term vacation rental industry.
Correlations between the sectors can shed light on trends and opportunities. How does short-term rental pricing reflect hotel rate trends? Are there echoes from hotel occupancy in vacation rental demand? Understanding the full picture and relationship facilitates better commercial decision making and the ability to be more dynamic with rate strategies, and yield more revenue.
For an industry in transition, the answers lie in the data. The combination of OTA Insight and Transparent offers the world's most comprehensive hotel and short-term rental data platform, delivering powerful analytics, and a clear, data-driven path towards recovery for both sectors.