A massive shift in consumer behavior has transformed the travel industry as millions of travelers shifted from hotels to private homes and spacious apartments as their first choice for accommodations. Sites like AirBnB, VRBO and HomeAway process thousands of lodging transactions weekly.
According to CBRE, by 2019 AirBnB accommodations alone accounted for 9% of all lodging units in the 10 largest U.S. markets. What’s more, AirBnB units are doubling annually, while the hotel industry is adding new units at only about 1% each year. After Coronavirus, hotel demands are down while private homes are in high demand for vacationers and business travelers!
The truly remarkable thing about the growth in short-term rentals is that only about 10% of travelers today are even aware of their existence! Yet, according to Bloomberg, once people have tried renting a private home at least once, they’re hooked, with under 39% saying they still prefer hotels.
Goldman Sachs research into this consumer trend confirms that “people ‘do a 180’" in their preferences once they use a private home rental. They move directly from preferring traditional hotels to preferring private home accommodations.
While the COVID19 pandemic temporarily impacts the travel industry, larger private home rentals are in higher demand than ever before, as families seek spacious, uncrowded accommodations with plenty of outdoor space and private recreation.
Meanwhile, Millennials are fueling future growth in the private home rental sector.
According to research conducted by Travelport, 55% of millennials plan to travel more in the next 12 months, compared to 31% of Generation X respondents and 20% of boomer respondents. According to Forbes, Millennials took an average of 3.5 vacations during the past 12 months, and 35% of Millennials intend to take even more vacations in the upcoming months post-Covid.
Millennials are also more likely to spend bigger money on upcoming vacations. Thirty-four percent plan to spend over $5,000 on upcoming vacations, which was the most of any of the age groups surveyed.