Will home-sharing and luxury hotels recover before other lodging products?
Tuesday, June 02, 2020
Smith Travel Research (STR), 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 preferences from past experiences. 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 11 as the point when the World Health Organization (WHO) declared a global pandemic, STR reported changes in the propensity to travel by hotel segments, with some intriguing results:
Luxury/superior class hotels
Before (March 11): 24% would travel less; 49% would make about the same number of trips; 27% would travel more.
After (March 11): The above numbers changed to 36%, 45%, and 19%, respectively.
Before: 24% would travel less; 61% would not change; 16% would travel more.
After: The above numbers changed to 42%, 45%, and 16%, respectively.
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; 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% 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% 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 record-low occupancies and average daily rates 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 speedy recovery of short-term or vacation rentals, 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 rentals, as well as luxury/superior hotels, will recover sooner than the other segments? Will dynamic pricing strategies become even more essential in today’s lodging business when the demand is mostly driven by leisure travelers?
- The dangers of mixing up 5.56x45mm NATO and .223 Remington rounds
- How to properly sight in a rifle with a scope
- Battery issues: Understanding your RV’s electrical systems
- The advantages of using a .45-70 cartridge
- To fight crime, engage kids in quality after-school programs
- 7 trigger control errors and how to fix them
- Pros and cons of the wadcutter bullet
- What’s the best distance to practice at for self-defense? It’s not what you think
- A sound plan gives strength to New Year’s resolutions
- Revenge travel: Making up for lost time, but at what cost?
- 7 ways to balance your work-from-home routine
- What to do when you notice your team ‘quiet quitting’
See your work in future editions
Your content, Your Expertise,
Your Industry Needs YOUR Expert Voice & We've got the platform you needFind Out How