There is little doubt that residential rental sites such as Airbnb, VRBO and HomeAway are disrupting the multi-billion dollar hotel business.
There is still significant debate about the long-term impact of that disruption but if a new study conducted by Hitwise, a division of Connexity, is any indication, these sites are complicating hotels’ online efforts.
According to the study, monthly visits to sites like Airbnb, VRBO and HomeAway has surged by 70% over the past three years while direct traffic to hotel sites has decreased by 3.6%.
While the latter might seem like a modest decline, consider this: Hitwise estimates that within the next 12 months, visits to residential rental sites will surpass direct visits to hotel sites.
What’s more, the Airbnbs of the world would appear to have potentially more favorable traffic profiles than their hotel site competitor.
They are slightly less dependent on search engine traffic than hotel sites and they generate more than double and triple the traffic from social channels and email, respectively.
Hitwise speculates that this “may be due to the fact that travelers seeking rentals may be emailing property links to friends” at a much higher clip, a behavior that is beneficial for rental sites for obvious reasons.
Not surprisingly, the rise of residential rental sites has not been kind to hotel aggregators like Booking.com and Hotels.com either.
According to Hitwise, their traffic has declined by nearly 8% over the past three years.
They are most dependent on search engine traffic, which when paid for can be very costly, and while they do receive more traffic from social channels and email than hotel sites, they don’t outperform them by much in these two categories.
What should hotels and aggregators do?
While the continued rise of rental sites seems all but inevitable, hotels and aggregators can’t sit on their hands.
In an effort to ensure that they don’t unnecessarily cede gains to rental sites, they should look at consumer behavior, which might explain in part why rental sites have been so successful.
According to Hitwise, ”females tend to dominate the booking of vacations” and they have very different preferences than males.
For example, female vacationeers are far more interested in booking vacation experiences that differentiate them from their friends, visit a different location every time they travel, and book through a company they have never heard of.
Rental sites arguably have greater appeal in these areas, but that doesn’t mean hotels and aggregators can’t compete.
Here are a few actions they can take…
1. Segment and personalise better
The differences between the preferences of female and male vacationeers highlight the importance of segmentation and personalistion for hotels and hotel aggregators.
While these companies do use segmentation and personalisation, this author hasn’t seen much evidence of gender-based segmentation in email marketing campaigns from hotels and hotel aggregators despite the fact that their preferences are so divergent in key areas.
2. Focus on customer experience
Given the fact that overall vacation experience is so important today, particularly for women, hotels and hotel aggregators need to think beyond offering a place to stay.
While they may not be able to offer the variety and some of the novelty of the rental sites, which have a unique portfolio of properties to offer due to the nature of their businesses, hotels still have opportunities to create unique, personalised experiences for their customers.
3. Revisit UX
The user experience of sites like Airbnb has been a big part of their success.
While hotel and hotel aggregator sites will necessarily have some differences, there are a number of UX lessons they can learn from sites like Airbnb.
4. Take advantage of their strengths
Hotels and hotel aggregators still have the ability to appeal to vacationeers in ways that their rental site competitors don’t currently.
For example, many vacationeers are interested in vacation packages in which activites are included.
Hotels and hotel aggregators are still far better positioned to offer these and they should take advantage of that while they can because it won’t remain forever.