Alternative Lodging became popular in the early 2000s to describe other options than hotels. Airbnb began to be considered a “potential disruption to the hotel business” between 2004 and 2011. according to Hospitality Net. Vacation rentals have existed since the 1960s.
What’s different? Clarify the difference between hotels and vacation rental homes to better understand their similarities and differences. Airbnb is a vacation rental service, just as Expedia isn’t a hotel.
There is a distinct terminology used within the vacation rental business. The main difference between vacation rentals and short-term rental (STR) is that the latter are located in urban areas.. Avoid labeling all your rentals as Airbnbs if you wish to have friends in the area.
Destination markets are where vacation rentals are located. People go there to escape from the daily grind and relax. Some vacation rentals in North Carolina’s Outer Banks date back 30-40 years. They maintain staff and manage between 30 and 3,000 single-family homes, condos, townhomes or condominiums. The homeowners are their primary client, not the guests. For the management and marketing of their properties, they charge a fee. The owners’ names and brands are prominently displayed in the town, and they are known to the locals. So, if there is a party going on or trash left out, people know who to contact.
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Airbnb is an online marketplace that allows anyone to list a rental property. However, they do not manage, own or rent any of the properties. The “guest” is their client, not them. This changes a lot about how they operate – how complaints are handled. The owners no longer have to use a realty agent or a management company to rent their homes. They also have no one to help them if they do not live in the state.
Vacation Rentals and Hotels: Similarities
Both vacation rental companies and hotels want to ensure that their guests have a great time and return directly via their websites. Both companies struggle to keep up with the rising costs of their technology stacks and staff overhead. It is not uncommon for revenue managers to set prices without speaking to their sales and marketing teamsMarketing teams can send out emails promoting products before consulting revenue managers.
The similarities between vacation rentals and hotels
- Operations: During spring break, rooms are often left dirty (yes, their cleaners have found cocaine, vomit and other nasty things). Check-out (when a guest checks out).
- Marketing: Google Ads: The OTAs have a larger marketing budget, so they can compete for Google Ads.
- Guest Relations Guests ask for compensation because there is a blocked toilet or construction in the next room
- Finance: Both vacation rentals and hotels are required to pay “Bed tax” and tourist taxes
- Family owned: When applicable, handed-down family businesses struggle with consistency, branding and family dynamics
The generational transference of family-owned brands is virtually identical, even though the business models may be different. Both face the same leadership and legacy challenges. There is, for example, a vacation rental company with approximately 100 properties in Sunrive (OR) that has a Google rating of 4.8 and a majority of single-family homes. The landscape and technology were very different when the company was established in 1983. The children who took over the company were forced to raise costs by investing in software for online bookings and digital marketing. This was in direct opposition to the parent’s demands for higher profit margins. It’s the same for a boutique in Grenada, which is about to pass the reins over to the son. The son plans to build the brand up to be more luxurious in the coming years to afford the rising costs.
Operational Model Differences
The ratio of staff to rooms is the biggest difference between vacation rentals and hotels. The ratio of staff to properties is usually 12:36. Some companies have 36 vacation rentals for every full-time employee. Most of their operations and marketing are outsourced to small local companies, but they still need software at a national level.
Local politics is a big factor when it comes to vacation rentals. Many property managers attend town halls or county meetings when locals are trying to ban vacation rentals. Many good property managers get lumped with the bad who don’t monitor their guests’ parking or trash, or noise level.
Margin plus onsite food and drink is probably the second largest difference between vacation homes and hotels.. More concierge services are available than ever to support the vacation rental experience. Noshable allows rental guests to receive a ready-to heat lasagna or stocked pantry at their request. Spa services, yoga instructors and private chefs are also available from companies such as CookinGenie We are levelling the playing field.
You can find data providers online. AirDNA The following are some examples of how to get started: KeyData Depending on the target market and location, we can provide reports and analyses for vacation rentals as well as hotels.
The use of loyalty point also increases competition and levels the playing field.
Urban Market Landscape
- If they are on business travel, guests looking for an urban short-stay hotel will likely compare it to an STR.
- First, guests will compare price. Next, they’ll look at the amenities. Finally, they’ll consider value, based on photos.
- In the past, brands assumed that there was a generational gap between those who chose to stay in “Airbnbs” and those who chose hotels. But this is not the case anymore.
Vacation Destination Markets
- The difference between the experience of the hotel guests and that of the vacation rental guests is greater in these markets.
- Guests traveling with multiple family members, groups and multi-generational travel will be more comfortable in a single family home than multiple hotel rooms – and more likely to save money this way.
- Even if a hotel is more expensive, couples or small families who need daily cleaning, food and beverages on site, and poolside bars will choose it.
ChatGPT is increasingly being used by guests as a way to find out “where should I stay” and answer their question. Hotels and vacation rental companies are less in control of the options that guests evaluate. It is important that all operators communicate clearly the benefits and unique differences so that both humans and bots can understand them.
Understanding these factors is important for hospitality consultants who advise on competitive positioning. operational differences You will be able to change the way you analyze markets and make strategic recommendations.
