02 – Compete with Rentals and Private Accommodations
In this episode of Suite Spot, we examine the growing impact of vacation rentals and private accommodations on today's hotel industry. Host Ryan Embree is joined by guest Amber Wojcek, Marketing Coordinator at Travel Media Group and author of many of our blogs and white papers.
In the What's News segment, Ryan and Amber react to a recent article from Tnooz reporting the year over year growth of vacation rentals and its overall share of global room bookings. In The Suite Spot, Ryan asks Amber what is driving vacation rental popularity and growth from the modern day traveler. Amber also recognizes the drawbacks to private accommodations and uncovers places where hotels have the advantage.
In the Q&A segment, we answer a question from a hotelier on how to better position their hotel to compete with local Airbnbs and other private accommodations. To submit a question for future episodes, call or text (407) 984-7455.
Resources we mentioned:
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Ryan Embree: Welcome to the Suite Spot where hoteliers check in and we check out what's trending and hotel marketing. I'm your host, Ryan Embree. Hello everyone, and welcome to another exciting episode of Suite Spot. I'm your host, Ryan Embree, and today it's my pleasure to introduce Amber Wojcek. Amber is our marketing coordinator at Travel Media Group as well as the author of many of our blogs and white papers. Good morning, Amber. How are you doing today?
Amber Wojcek: I'm doing great. Thanks for having me.
Ryan Embree: Let's jump into our What's News segment. Today we're going to be looking at a recent article on Tnooz, which forecasts that private accommodations and vacation rentals are expected to hit almost 20 percent of the overall share of global room bookings in 2018. That is significantly higher than previous years. In 2014, that number was 16 percent and in 2016 that grew up to 18 percent. So since private accommodations are taking almost a fifth of the market share, major travel resources like OTAs and TripAdvisor or making space for them on their websites and making them a priority. So Amber, what I want to talk about today is about the recent changes that we're seeing when it comes specifically to TripAdvisor and vacation rentals.
Amber Wojcek: Yeah. I think a big indicator of this trend coming to stay was when Expedia purchased HomeAway back in 2015 and now we're seeing that TripAdvisor is making some big moves to make it easier to search for private rentals when people are looking for hotels. We've learned that now and TripAdvisor, when you search for a hotel, you might also see B and B's, hostels inns, and other kinds of accommodations in the results along with hotels. We're seeing this display differently when we tried different searches. So I think they might be testing the ways they want to show this, but I wouldn't be surprised that they start integrating vacation rentals section even more.
Ryan Embree: So you're saying when a user would go to TripAdvisor and input a city or region, now B and B's and rentals will appear in the main feed along with hotels.
Amber Wojcek: Yes, exactly. So there some filters on the side that change how you search for things, but we're also seeing them just showing up along with the hotels. And another thing I think is worth considering is that a big barrier that people have had to booking rentals has been that you need to submit a request and wait for an owner to approve it. We're hearing now that Booking.com is making rentals instantly bookable soon, like a hotel which could have a big impact and I would assume that other OTAs would follow suit. So basically now if you're a hotel, you're not only competing for visibility and reservations with all the other hotels, near you, but also with other accommodation types.
Ryan Embree: So this article really gets into how competitive hotels are. Now we're going to have to be against these vacation rentals and with the influx of and, and other rental properties gaining more and more exposure to travelers. There's a huge potential for significant visibility change for your hotel. And it could be positive or negative with the rise of sites and apps like Airbnb, HomeAway, VRBO, and other vacation rental platforms. Travelers have more options than ever, but unfortunately for hoteliers, that means there's more competition than ever, which is actually a great segue into today's Suite Spot topic. Today we're going to focus on hotels going head to head against vacation rentals. I want to start off this segment by examining the mindset of a modern day traveler and their view of private accommodations and vacation rentals. Amber, what makes this type of lodging so appealing and attractive to travelers today?
Amber Wojcek: So I think there's really two ways of coming about this, of travelers that really enjoy vacation rentals. One is a niche that Airbnb has really zeroed in on, which is the experiential travel. So they have whole sections on their website about experiences to have in a city, and the ability to try and see a place like a local buy living in a home and not, you know, in a hotel. But on the other hand, studies have shown time and time again that still the most influential factor on booking is still price. And at the end of the day, rentals can often accommodate more people at a much lower price point per person, especially in a big city. And if you're budget minded, he might like the idea of having a kitchen and stuff, eating out for every meal in a city or having access to a washer and dryer in your own room instead of a hotel where you'd have to pay for all of these things separately.
Ryan Embree: So now that we've heard what's attractive to travelers when it comes to private accommodations, what are the drawbacks of vacation rentals versus your typical hotel stay from a traveler's point of view?
Amber Wojcek: I think as a traveler there's definitely certain perks that you kind of get used to at a hotel that when you rent a house you can kind of miss. I'm at a hotel. It's great to have housekeeping to be able to come back at the end of the day to a clean room. There is a front desk person you can contact at any time instead of having a homeowner that you don't know if they'll answer your calls and emails if you have an issue. And really importantly, you know that you have a safe place to park when you're not sure if you can find street parking near your home, and this is really rare, but there have been pretty bad incidents where something awful happens at home because the building isn't regulated, inspected and insured like hotels are. Again from the cost standpoint, there can actually be a lot hidden fees when you're renting. You start seeing the nightly rate when you're trying to book, but then when you go to checkout, there is additional cleaning fees and damage deposits. And to me the worst thing is the cancellation policies can be really strict. On some a renter will lose half of the fee that they paid upfront if they cancel.
Ryan Embree: Absolutely. And you just don't seem to have those problems with hotels.
Amber Wojcek: Yeah, definitely.
Ryan Embree: It is critical for hoteliers to understand both the benefits and the drawbacks for travelers when it comes to private accommodations. And vacation rentals so that they can better position themselves to compete against them, which actually leads us into our Q&A segment this week. As a reminder, our Q&A segment is where we take questions from hoteliers in listeners and answer them live on air. So the question of the week we got actually from a GM from California, Jason, and he's having a very big issue with competing with these Airbnbs and he asked, "How can I better compete with companies like Airbnbs that are taking my travelers?"
Amber Wojcek: That's a really great question. I think to start is going off before I was just talking about of all those hidden fees, really being transparent about your pricing can help a lot of people don't like surprises once they get to their booking pages. So in addition to having up to date pricing on your website, also having specials available or coupons or just different rates for groups like AAA, and things like that to help you compete with the price-conscious travelers.
Ryan Embree: That's a great point. And another thing hoteliers can do and what they should do is make any sort of additional fees that the travelers stay might incur. I'm very, very clear and transparent like resort fees, for example. Any additional parking fees, you definitely want to make that known to the traveler.
Amber Wojcek: Yeah, exactly. And in addition, you can show value in other ways, even if your rooms cost more per night than a local rental, you know, if you're including breakfast or other amenities, that can go a long way for a traveler.
Ryan Embree: And a great way to really show that value like you're talking about, Amber is utilizing social media. You know, we consult with hoteliers all the time about using social media to really show value to their travelers. Showing things like valet parking - that's something that a lot of rentals are not going to offer, an onsite gym. These are things that you are going to have the advantage over vacation rentals and properties.
Amber Wojcek: Yeah, you can definitely look even at your amenities that might seem really basic to you, but can make a huge difference. If you're pet friendly, I feel like that's a huge draw to a hotel that a lot of rentals won't be. Um, and yeah, you use social media to tell people about these things.
Ryan Embree: Another point I want to bring up, Amber, is when you mentioned one of the advantages, uh, that comes with Airbnbs. Travelers are looking for that unique local experience. Hoteliers tend to forget, but they actually can offer this as well. They can highlight local attractions or restaurants. Sometimes they even provide shuttle service that is included in your hotel stay.
Amber Wojcek: Yeah, you're right on that. And I think hoteliers need to remember that they are a local resource for their guests who may have never been to the city before. You can go to local businesses and ask if you can send guests their way, if they would give them a discount so that you know, it's a win win where you're helping a local business and you're helping your guests know something cool and interesting that they might not have found on their own.
Ryan Embree: That's a really good point. And you want to act as a concierge at your property. Have your front desk agents, you know, hear what other travelers are saying about local places and share their experiences with incoming travelers that, like you said, had never been to the city before.
Amber Wojcek: Right. That's one of my favorite ideas - I know it can be really hard for people to come up with social media content and I think just going around and talking to some of your employees and asking where they like to go on the weekend, what their favorite local restaurant is. It can be a great conversation starter for the guest on the property and a great way to reference good things to do while you're visiting the hotel online.
Ryan Embree: And you even came up with a really cool idea for packages that hotels can offer.
Amber Wojcek: Right, when you're building your packages on your website. You know, you might already have ones that include free breakfast or other amenities, but I would consider making one that's called "Live Like a Local" that let's you with your hotel include tickets to a local attraction like an art museum or a winery or something like that.
Ryan Embree: That's a really great idea. And again, you can share those packages using social media or your website, you know, these are the things that really Airbnb's don't offer travelers.
Amber Wojcek: That's right. And another perk of offering these things is that's going to help you resolve and better experiences for the guests and better reviews which leads back to helping you to compete on those OTAs and TripAdvisor.
Ryan Embree: And I'm glad you brought up reviews because that's another way that hoteliers can gain advantage over travel rentals or private accommodations.
Amber Wojcek: Right. Since we're saying earlier that pretty soon hotels for me competing with all these other things, reviews are really gonna be what's gonna set you apart on TripAdvisor.
Ryan Embree: Yeah. And utilizing, you know, those Certificates of Excellence and star ratings that's going to give you the advantage over a vacation rental that might not have as reviews or experiences. So ultimately, you know, when we talked to Jason, we know that Airbnb and these vacation rentals are rising, but there are still a huge opportunity to compete against these rentals by using these best practices and tips that we talked about today. If you're looking for some more information on these tips and best practices, Amber actually wrote a wonderful white paper which is included in our show notes, so if you are looking for some new ideas to compete against vacation rentals, definitely check that out. Again, we would love to hear from you, our listeners and hoteliers, questions that we can answer live here on air. So if you have a question that you want answered about digital marketing or anything that has to do with hospitality, call or text us.
Ryan Embree: Our direct line is 407-984-7455. That's 407-984-7455. We will read your question aloud on air and give you some really good insight. And that is our episode for today. I want to go ahead and thank Amber for taking the time.
Amber Wojcek: Glad to be here.
Ryan Embree: Absolutely, and thank you for listening to Suite Spot. We'll see you next time. To join our loyalty program, be sure to subscribe and give us a five star rating on iTunes. Suite Spot is produced by Travel Media Group, our editor is Anne Sandoval with cover art by Bary Gordon and content support by Amber Wojcek. I'm your host, Ryan Embree, and we hope you enjoyed your stay.
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