Op-Ed: Short-term rentals…facts vs. feelings
Some people make decisions and judgments on feelings, while others base their views on facts supported by objective data and information. In the business world, facts are much more important than feelings when deciding. Data and information are needed to better understand situations and reach reasonable conclusions in all fields.
The visitor accommodation segment of the tourism industry is no exception. As in many industries, new consumers are driving trends that are reshaping the market. New market players are filling these contemporary needs, impacting traditional players who for their part fight against these market changes instead of evolving with them.
A clear example, which has gained strength in recent years, is the rise of accommodations that enter the short-term rental market and how the traditional segment of hotels and inns, fight against it because they feel threatened.
Although there are important issues to attend to regarding the regulation and supervision of short-term rentals, the fear of this segment is based more on feelings than on facts. Here are seven misconceptions about short-term rentals according to Airdna, one of the largest data aggregators in the short-term rental segment:
1. Short-term rentals are in direct competition with hotels. Incorrect: 35% of STRs are in non-traditional tourist areas.
2. Travelers are willing to pay the same price for a hotel as a short-term rental. Wrong. Short-term rental guests spend an average of 65% more per night than hotel guests.
3. Travelers stay in hotels the same as they stay in short-term rentals. Wrong. Short-term rental guests tend to stay 72% longer than the average hotel guest, maximizing their economic impact.
4. Short-term rentals have no budget impact for tourism organizations. Incorrect. Like hotels, short-term rentals now collect lodging taxes for DMOs and/or municipal governments in all 50 states and US territories
5. Short-term rentals follow the same demand/sell patterns as traditional accommodation. Wrong. Short-term rentals attract a more resilient traveler and therefore seasonality curves tend to smooth out.
6. All types of short-term rental properties are the same. Wrong. Sixty percent of short-term rentals are two bedrooms or more. Larger units naturally have their own issues when it comes to rates, occupancy, seasonality, etc.
7. Destination Marketing Organizations (DMOs) are not considering short-term rentals in their marketing plans and strategies. Wrong. More and more DMOs are incorporating short-term rental data into their marketing plans. Just as hotels are a great lodging option wherever one travels, short-term accommodations provide the same value within the gaps hotels can’t fill. DMOs that understand this can better allocate funds to run effective marketing campaigns that increase demand because the supply will be there.
These are all facts and information that were researched by Airdna and can be validated by anyone. Based on these (and other data), we can conclude that because hotels and short-term rentals offer a fundamentally different visitor experience, these segments are not in direct competition, and both are important to having a destination offering. varied and complete.