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HOTEL ALTERNATIVES - US - JULY 2019

Published By :

Mintel

Published Date : Jul 2019

Category :

Hotels & Restaurants

No. of Pages : N/A

For the purposes of this report, Mintel has used the following definitions:

  • Hotel alternative: Paid lodging other than hotels, motels or casino hotels. This report focuses on the following hotel alternatives:
  • Homeshares: Private residences that are rented by the owner in whole or in part to overnight guests.
  • Vacation rentals: Similar to homeshares, but generally rented as entire residences (opposed to smaller units) for longer terms.
  • Apartment rentals: Residential units within multi-unit buildings that are rented on per-night or per-week basis, as opposed to monthly leases.
  • Campgrounds: Outdoor areas that provide spaces for guests to camp in tents or RVs. Also includes areas that provide on-site lodging such as cabins.
  • Hostel: A building that accommodates many overnight guests in a setting with more basic amenities than a hotel. For instance, many hostels have dormitory- or barracksstyle sleeping areas with minimal privacy, as well as more residential-style common areas.
  • Bed and breakfast: Lodging that tends to be small and privately-owned and is typically rented for one- or twonight stays. Differs from a homeshare in that while many are converted residences, they are fully considered to be businesses.

"The number of non-hotel lodging choices available to travelers has exploded in the last decade, becoming a categorical juggernaut in the travel industry. Younger, more experience-minded travelers jumped on early, and in fact remain hotel alternatives’ strongest supporters. Now, while hotel alternatives are still attractive to current young travelers and grown-up early adopters, they have to start filling the gaps in satisfaction to prevent their fans from “aging out” of alternatives and into hotels."

Table of contents
OVERVIEW
What you need to know
Definitions
EXECUTIVE SUMMARY
Overview
Observations
Takeaway 1: Hotel alternatives have a bright future
Figure 1: Hotel alternative brand usage and reasons for usage, by age group, April 2019
Figure 2: Perceptions of affordability of homeshares vs hotels, by age group, April 2019
Opportunity
Takeaway 2: Safety and loyalty programs are issues for hotel alternatives
Opportunities
Figure 3: Desired features of hotel alternative loyalty programs, by experience with alternatives, April 2019
Takeaway 3: Branding is important
Opportunities
Figure 4: Hotel alternative preference, by age group and parental status, April 2019
What it means
THE MARKET – WHAT YOU NEED TO KNOW
A “hotel alternative” by any name
The big players are doing well
Vacation trends are shifting
The wild is calling
An unpredictable economy gives homesharing a boost
MARKET BREAKDOWN
Airbnb
Company Financials
Expedia Group
Figure 5: Vrbo logo and mobile site redesign, June 2019
Company Financials
Booking Holdings
Company Financials
OYO
Sonder
Kampgrounds of America (KOA)
MARKET PERSPECTIVE
Vacation trends favor homeshares
Figure 6: Preferred vacation length and frequency – by age, 2014-18
Vacationers are seeking the road less traveled
Figure 7: Attitudes toward vacation destinations, February 2019
The outdoors are getting greater
Figure 8: Enjoyment of camping/hiking, by age group, 2014-18
Working retirees provide a good host base
Figure 9: Boomer attitudes towards continued employment, March 2019
MARKET FACTORS
Economic gains are unpredictable
Figure 10: GDP change from previous period, Q1 2007-Q1 2019
Hotel ADR climbing
Figure 11: Monthly hotel ADR, March 2017-April 2019
Pass-through income makes hosting worth its SALT
High participation in the gig economy works for alternatives
Figure 12: Percentage of employed adults with a “side gig,” by generation, March 2019
KEY PLAYERS – WHAT YOU NEED TO KNOW
Hotels and alternatives are moving on each other
Recreational vehicles look forward, not at the rear view
Loyalty programs aren’t helping alternatives
Homeshares have a lot against them
Hostels, but less hostile
Temporary rooms for temporary guests
Wellness gives new areas a shot in the arm
WHAT’S UP?
Hotels are getting into alternatives
Airbnb is getting into everything
Limited-time hotels
RVs are rolling out updates
Figure 13: Airstream “Bambi” trailer features
WHAT’S DOWN?
Loyalty programs aren’t great for alts
Perception that homeshares hurt local economies
Regulation threatens the homeshare model
Alternatives make headlines with issues of safety and prejudice
WHAT’S NEXT?
A hostel by any other name
Hotels will deploy their own mod squads
Figure 14: Flying Nest modular accommodation
Wellness tourism give alts a leg up
THE CONSUMER – WHAT YOU NEED TO KNOW
Airbnb is the industry leader
Younger travelers get to stay in alternatives, older ones have to
The proof is in the pudding
Safety is paramount
People want unique lodging, not unique FTPs
Hotels are seen as more responsive
Host expertise is nice, but not necessary
HOTEL ALTERNATIVE GUEST SEGMENTATION
Factors
Avid Adventurers (AAs) (37%)
Leery Lodgers (LLs) (26%)
Traveling Traditionalists (TTs) (38%)
Figure 15: Hotel alternative guest segments, April 2019
NUMBER AND TYPE OF STAYS
Alternatives are seeing lots of repeat business
Figure 16: Mean and median stays in paid accommodations, 2017-19
Alternatives have lots of room to grow
Figure 17: Types of accommodations stayed, April 2019
There’s Airbnb, and everyone else
Figure 18: Alternative brands used, April 2019
Homeshares and the outdoors more popular with younger lodgers
Figure 19: Hotel alternative brands used, by age group, April 2019
REASONS FOR USING HOTEL ALTERNATIVES
Perceptions of alternatives improve with experience
Figure 20: Reasons for using hotel alternatives, April 2019
Younger travelers seek alternatives; older travelers settle for them
Figure 21: Reasons for using hotel alternatives, by age group, April 2019
Even older travelers can be won over
Figure 22: Reasons for using hotel alternatives among age 45+, by experience, April 2019
Parents want to be part of the action, but only part-time
Figure 23: Reasons for using hotel alternatives among ages 18-44, by parental status, April 2019
Alts have appeal to different segments
Figure 24: Reasons for using hotel alternatives, by segment, April 2019
PERCEPTIONS OF HOMESHARES VS HOTELS
Homeshares win on uniqueness and experiences
Figure 25: Perceptions of homeshares vs hotels, April 2019
Experience matters
Figure 26: Perceptions of homeshares vs hotels, by experience with homeshares April 2019
Homeshares aren’t hip
Figure 27: Perceptions of homeshares, by age group, April 2019
Homeshares lose any perception of affordability with age
Figure 28: Perceptions of affordability of homeshares vs hotels, by age group, April 2019
Homeshares aren’t “for” the over-55 crowd
Figure 29: Perceptions of appropriateness of homeshares, by age group, April 2019
Leery Lodgers stay in alternates despite views favoring hotels
Figure 30: Perceptions of hotels vs homeshares, by segment, April 2019
Even homeshare champions don’t think they’re safer
Figure 31: Perceptions of safety, by segment, April 2019
CHOOSING A HOTEL ALTERNATIVE
Security is the top priority
Figure 32: Reasons for choosing a hotel alternative, April 2019
Figure 33: Reasons for choosing a hotel alternative, by gender, April 2019
“A” for Safety
Figure 34: TURF analysis – decision factors for choosing hotel alternatives, April 2019
Leery Lodgers want to be close to the action
Figure 35: Proximity factors in choosing hotel alternatives, by segment, April 2019
HOTEL ALTERNATIVE LOYALTY PROGRAMS
Preferred FTP features
Figure 36: TURF analysis – Hotel alternative loyalty programs, April 2019
Hotel alternative FTPs don’t need to be unique
Figure 37: Desired features of hotel alternative loyalty programs, by experience with alternatives, April 2019
Parents are more interested in perks
Figure 38: Desired features of hotel alternative loyalty programs, by parental status, April 2019
ATTITUDES TOWARD HOTEL ALTERNATIVES
Hotel alternatives are preferred by parents, younger travelers
Figure 39: Hotel alternative preference, by age group and parental status, April 2019
Alternative guests are more complacent about hotels
Figure 40: Attitudes of lodging as simple quarters, April 2019
Hotels are seen as more responsive
Figure 41: Attitudes toward service, April 2019
Alternative guests value (but don’t seek) their hosts’ expertise
Figure 42: Attitudes toward host value, April 2019
Alternatives have ease of navigation, some level of trustworthiness
Figure 43: Attitudes toward hotel alternative infrastructure, April 2019
More digitally savvy travelers have the most concerns about contact
Figure 44: Concerns about online communication, by age group, April 2019
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Abbreviations and terms
Abbreviations
APPENDIX – THE MARKET
Figure 45: Preferred vacation length and frequency – nets, by age, 2014-18
Figure 46: Enjoyment of camping/hiking, by age group, 2014-18
Figure 47: Attitudes toward hotel alternatives, April 2019
Figure 48: Monthly hotel ADR, March 2017-April 2019

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