The Airbnb vs Hotel Industry Fight Isn’t As One-Sided As You Think

By: on November 13, 2017

The “battle” between the short-term rental (STR) providers like Airbnb and independent hotels is overstated: both types cater to different traveler segments, wanting different types of lodging at different times.

But try telling that to the hotelier finding their market flooded with new short-term rentals to compete with—many operated by commercial ventures. The paranoia is real.

A hotelier, trying not to think about Airbnb

Naturally, independent hotels are seeking ways to convey their value and unique offerings. To help out, we surveyed travelers who book lodging at least once a year about the kinds they prefer and why.

Key Takeaways:


• Less-frequent travelers are more likely to book independent hotels, implying they may be willing to pay for a unique experience. [Read more]

• Travelers want the local flavor and utility access from STRs—not necessarily the perceived price difference. [Read more]

• Consistency, reliability, safety and privacy are the top reasons travelers choose independent hotels over STRs. [Read more]

Independent Hotels Attract Less-Frequent Travelers

With more flexibility than large chains, independent hotels can offer a more specialized, personal experience for guests. Large hotel brands began investing in their own boutique-style properties years ago to stake a claim in this growing traveler desire for authentic experiences instead of homogenous chain stays.

Because of this, independent boutique hotels are often chosen for personal vacations and special occasions, and can charge more for the unique experience travelers are willing to pay for. This likely leads to the results below:

Types of Preferred Lodging by # of Annual Trips

We see that more-frequent travelers tend to choose Airbnb’s or other STRs over independent hotels. Even though STRs aren’t always cheaper than hotels—it depends heavily on your location—we’ll see below that the price difference is a lingering traveler perception.

Local Experience, Utilities Drive Travelers to STRs

Airbnb, HomeAway and other companies are riding the wave of the growing sharing-economy, giving travelers lodging options that may better suit their needs and wants than traditional hotels.

A “local experience” attracts many travelers to rent rooms or entire homes, and frequent travelers may be able to find cheaper spots to stay to avoid overspending.

Reasons Travelers Choose Short-Term Rentals Over Hotels

So, sure, traveler’s don’t often find a full, usable kitchen in independent hotels, but they can certainly find the local experience.

Hotels editor Jeff Weinstein said it best in a recent interview:

People want to feel that they’ve been somewhere special, that they’ve learned something new, that they’ve had some exposure to music or art.

Jeff Weinstein, editor of Hotels magazine

As a hotel owner in your city, you’re much more capable of tapping into insider knowledge about what’s really hip and special in your area than the giant Marriott downtown, and your connections gives you leverage to partner with other businesses to maximize the local feel.

Smartly marketing that extra effort to learn about and provide the best authentic experience can sway guests to choose your hotel over a rental.

Independent Hotel Strengths: Consistency and Safety

As for what independent hotels offer that travelers value: a consistent experience and safety.

Of course, these aren’t universally true, but according to our survey, many travelers are uneasy about staying in someone else’s home.

Reasons Travelers Choose Hotels Over Short-Term Rentals

Independent hotels have much more to lose by disappointing customers with unclean rooms and lax safety standards. And we already know how negative reviews can impact a hotel’s reputation: The most recent surveys show 95 percent of travelers read hotel reviews before booking.

What people say they do and what they actually do don’t always match, but online reviews play a major role in the rapid growth of travel planning of all types—through 2020, the travel industry will own the highest percentage of online payments compared to every other industry.

Reputation management and social media monitoring are necessary additions to hotel management suites, allowing you to spot any mention of your property online so you can respond and identify common issues with your service.

So when independent hotels can combine consistency, safety and the ability to also offer a localized experience, they have a greater chance of driving positive reviews. Again, marketing that value and authenticity can help change traveler perception and win guests.

Discounts and Upgrades Can Sway Traveler Choice

Offer cash or discounts as an incentive and people respond.

In a past report about hotel incentives, we showed that hotels have long been able to win over guests from online travel agencies with discounts for booking direct from the hotel website. Specialized landing pages with calls-to-action have a respectable success rate.

Preferred Incentives to Choose Hotels Over Short-Term Rentals

But there are other options to meet the preferences of our respondents that STRs simply can’t offer:

  • Room upgrades at the point of booking adds a lot of value for guests and generally don’t create a great burden for hotels.
  • A free meal or drink from your in-house kitchen or restaurant is a way to delight guests while also encouraging them to visit for another.

A couple hotel technologies can assist here as well.

An online booking engine, a standard part of any modern hotel reservation system, allows hotels to customize the offers guests receive when booking online—these calls-to-action can be compelling and drive direct bookings.

A hotel CRM can be used to track the guests you respond to. Then you can personalize your outreach to boost loyalty with your most lucrative customers.

Incentives won’t sway every type of guest, but for those looking for value instead of pure pricing or to stay in a particular part of the city, these kinds of incentives can make a difference.

How Can I Win Over Guests from STRs?

Keep in mind, your hotel isn’t necessarily in direct competition with Airbnb, but you can offer the same localized, authentic experience they want, more reliably, with a little work. Then you must convey this through marketing.

I mentioned a lot of different marketing tactics here, so read more content about how to:

And reach out to me at taylorshort@softwareadvice.com if you have any questions or would like assistance finding a solution to help automate your hotel.

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