The Alternative Accommodation Market After COVID-19
Prior to the pandemic, the alternative accommodation market (such as Airbnb or Vrbo apartments) had been steadily growing, taking away the market share of traditional accommodation providers, such as hotels and hostels.
The sector in Europe and the U.S. was maturing before the pandemic stroke, and emerging markets were also registering real growth. Just in the European Union, between 2010 and 2019, this sub-sector grew more than 1.7 times faster than hotels. In the U.S, the total short-term lodging market reached $23 billion in 2018, accounting for 8.6% of the total accommodation market, with a forecasted 10% market share in 2019 and $30 billion of revenue. In the US, Airbnb and Vrbo are the biggest market players, providing around 90% of all short-term lodging supply in the country.
The travel industry won't be the same after the coronavirus pandemic and, in this article, we'll focus on alternative accommodation. What will happen to this market after coronavirus? How will the pandemic affect Airbnb, Vrbo and other companies in the industry?
How Has Coronavirus Affected The Alternative Accommodation Market
COVID-19 has influenced the financial health of many alternative accommodation businesses. Branded home providers or hotel aggregators might lose their positions in the market and face financial difficulties because of their intermediary position in the period of a huge decrease in demand.
The decline in revenues and occupancy rates of the budget aggregator OYO has reached 50-60% as of April 13th. In OYO's COVID-19 response video, CEO Ritesh Agarwal stated he's decided to forgo his salary by the end of 2020. OYO Hotels made a decision to let go of 30% of their employees in China (3,000 people) as a part of their global labor force cut of 5,000 people.
The ability to adapt to the current circumstances is going to be a crucial factor for survival during the crisis. As an example, Airbnb has significantly changed the opening page of the website, focusing on offering long-term (monthly) stays, online experiences and frontline stays aimed for healthcare professionals and first responders. However, Airbnb also didn't escape the painful measure of laying-off 25% of its staff.
What Will Happen to The Alternative Accommodation Market?
One of the most important tasks towards regaining traveler trust would be to ensure the quality in terms of cleanliness of apartments.
Sonder, the San Francisco-based unicorn of the branded home space, has already launched enhanced cleaning protocols and provided a transparent overview on their blog regarding the measures taken for the sanitization of properties. One of the particularly topical competitive advantages that Sonder has, lies within the already established limited face-to-face interactions for their guests as they offer self-contained spaces that are serviced digitally, including check-ins and check-outs right from guests' phones. Their partnership with Postmates for door-to-door food delivery helps make the social distancing even more comfortable for travelers.
Airbnb is also taking the step towards rolling out the Airbnb Enhanced Cleaning Initiative in May 2020 to help its hosts clean more effectively during the pandemics and beyond. The new step-by-step guidelines would recommend supplies, sanitization techniques, room-by-room instruction and other relevant information for a unified approach in terms of cleaning practices.
Alternative accommodation is going to focus more on long-term stays as remote work has proved to be successful and efficient for many businesses. In order to eliminate face-to-face interactions as much as possible, hosts would have to ensure the contactless check-in and check-out solutions for their guests as well as timely communication via digital channels.
New Technologies & Startups To Help the Industry After Coronavirus
Similar to other sub-categories, contactless solutions and emphasis on disinfection and cleanliness are going to be of high importance when it comes to staying in short-term rentals. Below are some examples of startups working in the area of serving the needs of alternative accommodation owners and property managers.
- Operto Technologies: As an example, Operto Technologies offers keyless check-in besides other solutions aimed towards more efficient stay of guests, such as automated guest entry, PMS Integration, cleaner & service alerts, check in/out alerts, intercom, shared access doors and multi-entry possibilities. Their software ensures guest comfort and helps save energy costs as it integrates with energy devices for an intelligent control.
- CheKin: Another startup, CheKin, is a software solution for guest registration that automates guest identification and legal obligations to provide a frictionless check-in experience for alternative accommodation providers. CheKin offers a web dashboard and mobile APP to register guests online and on-site, thus providing a better and more seamless guest experience.
Cleanliness and guest experience
- Doinn: Doinn enables clients and technology for professional hospitality cleaning companies. They allow property owners and managers to schedule cleaning, coordinate laundry and final inspection services. It’s never been more important to guarantee professional cleanliness in private accommodations
- neu: Ensuring cleanliness of properties is one of the main tasks for vacation rental owners, especially during and after the virus outbreak, and neu has a solution for that - the managed marketplace that streamlines hotel-style cleans for short-term lodging. Neu minimizes the time-consuming process of selecting, scheduling, managing, and paying for cleaning service.
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