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Hotel Alternatives - US - July 2019

Covered in this report

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."
- Mike Gallinari, Travel & Leisure Analyst

This Report looks at the following areas:

  • Takeaway 1: Hotel alternatives have a bright future
  • Takeaway 2: Safety and loyalty programs are issues for hotel alternatives
  • Takeaway 3: Branding is important

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Table of contents

  1. 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

                                                                                                                Hotel Alternatives - US - July 2019

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