With the number of travelers continuing to increase yearly, hotels have consequently been experiencing growth in sales for the past decade. However, with the home or vacation rental market also expanding, the hotel industry is coming up against an unprecedented threat.
According to global market research firm Euromonitor International, rental business pioneer Airbnb will drive in more or less $40 billion in short-term rental sales by 2020. That projection would be higher than the sales of other hospitality companies except for the Marriott-Starwood group.
Hotels have responded to the rise of the rental market in various ways, with some of them in the extremes, such as denial that the likes of Airbnb and HomeAway cater to a different, distinct market segment. The best way to respond is to adapt to them and treat them as competition, since every business has to deal with a myriad of challenges, anyway. And competitors of any form is just one of them.
Hotels need to continuously improve their amenities and services to keep up with the vacation rental market. Most hotels are already in prime locations, one of the most important factors for travelers when choosing accommodation. But they should also go to great, reasonable lengths, to meet customer demands and provide them a positive customer experience, one that would push them to revisit the hotel or refer the place to other people.
Hotels also have to fight back in the marketing arena, which has been one of the fortes of vacation rental market sites or apps. Investing in relevant marketing channels can help up drive up sales or revenue.