July 06, 2017
Marketing
Umar Riaz
©2017 Hospitality Upgrade
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Digitalization, customization and technology have armed consumers with more choices than ever, creating a powerful rise of attention from both the traveler and the hotelier on the private accommodations market, such as HomeAway and Airbnb.
To better understand this continued trend in the hospitality industry, Accenture Travel surveyed 2,500 business and leisure travelers across five countries* about their lodging preferences. Accenture concluded that while private hotels are gaining traction, both business and leisure travelers ultimately prefer hotels over all other options.
When planning a trip travelers have many more options to consider that have diversified their’ preferences. The emergence of private accommodations now provide a traveler with the option to stay at a house or condo rather than in a hotel room. The Accenture Travel Private Accommodation Study found that 74 percent of business travelers and 84 percent of leisure travelers still prefer to stay at a hotel room over a private accommodation. This preference may be indicative that convenience and instant gratification are important to consumers. Hotel properties value proposition offers more than private accommodations do, including housekeeping services, onsite 24-hour food delivery services, fitness rooms, business centers, concierge services, security services and more. As private accommodations begin to offer some of these services, they may be able to pull additional market share away from hotels.
On the other hand, private accommodation companies such as Airbnb and HomeAway continue to gain recognizable market traction by providing alternative and sometimes cost-effective options for travelers that diversify preferences from what have been offered in the past. Newcomer StayBillety matches people and places with things in common. For instance, a family attending a soccer or lacrosse tournament. The Private Accommodation Study shows that 39 percent of business travelers and 52 percent of leisure travelers consider alternative accommodations when traveling, 21 percent of whom choose private accommodations for better pricing.
When considering age demographics, we believe the millennial generation will have the most impact in the hotel industry as millennials are the most prone to look at alternative options for travel accommodations. Study results disclose that 56 percent of millennials consider a private accommodation for business travel as compared to 31 percent of non-millennials. For leisure travel, 64 percent of millennials would consider private accommodation compared to 46 percent for non-millennials. As millennials continue to influence booking behavior among their friends and family, hoteliers should continue to invest in products and services that are geared toward the millennial generation, prioritizing customizable experiences – “It’s a busy time in Miami, hotels will sell out quickly”; and convenience at the expense of hotels – “Free Cancellation.”
Looking ahead, the best way for hotels to compete with private accommodations over the long term is to up their game across the board rather than lower prices:
Forget about one-size-fits-all. The importance of pricing, location and guest experience reflects individuals’ preferences, but also, geographic realities — from the cost of a hotel room to the availability of properties for short-term rent. Broad brush strategies easily fall flat.
Stretch the brand with more options. By developing targeted brand offerings that appeal to different traveler groups — from the price sensitive to the fearless adventurer to the luxury traveler — hotels can extend their reach and strengthen their value proposition.
Curate guest experiences with local flavor. The immersive, embedded aspect of private accommodations is a powerful lure, even for guests who prioritize price in purchase decisions. Hotels can deliver this too with experiences rich in local customs, cuisines, people and events.
Know what’s cool with “the kids.” Travelers who prefer private accommodations skew young. Attracting millennial and Gen Z guests — a growing segment in hospitality — means being agile and infusing the stay with what they like about private accommodations.