Hotels Adapt to Compete with Airbnb
Major hotel brands are pivoting to compete with home rentals by catering to the "Airbnb Generation," according to a new industry report. Hotels are adapting by offering larger suites, kitchenettes, and communal spaces to attract multigenerational and group travelers. This shift blurs the line between traditional hotels and residential-style accommodations.
- Several major hotel corporations have launched their own short-term rental platforms to compete directly, including Marriott's "Homes & Villas," Accor's "Onefinestay," and Hyatt's "Homes & Hideaways". - Research shows that for every 1% increase in Airbnb listings in a major city, hotel revenue per available room (RevPAR) decreases by 0.016% to 0.031%. Lower-priced hotels and those not catering to business travelers are the most affected segments. - The price advantage of home rentals is shrinking; between 2019 and 2023, the average price of an Airbnb increased by 36%, while prices at major hotel chains like Marriott and Hilton rose by only 7.8% and 12.8%, respectively. - The extended-stay hotel market, a direct competitor for longer-term travelers, is a significant growth area, with projections to increase from a value of approximately $60.94 billion in 2024 to $148.75 billion by 2034. - In a reversal of the competitive dynamic, about 95,000 hotels now list their rooms on Airbnb, using the platform to reach new markets and fill rooms during off-peak seasons. - Consumer preference remains a key factor; a 2024 survey found that 53% of Americans prefer staying in a hotel over a home rental. Travelers tend to choose hotels for their location and perceived cleanliness, while opting for rentals when they need more space. - In response to the "stay like a local" appeal of Airbnb, hotel giant Marriott invested in PlacePass, a search engine for travel tours and experiences, to provide guests with curated lists of local activities. - While hotels adapt, the demand for short-term rentals continues to grow at a faster pace. Since early 2022, the quarterly demand growth for rentals has consistently outpaced that of hotels.
