As travel sentiment picks up pace among lockdown-weary consumers, the battle for the ever-growing short-term rental guest is waging even stronger, with hotel traditionalists like Marriott International and Accor taking on established heavyweights Airbnb and Vrbo. In fact, Homes & Villas by Marriott International (HVMI) experienced a 720% increase in demand Q1 of 2021.
As more consumers are opting for non-traditional lifestyles untethered from their germ-filled offices and daily commutes, it can more often also lend itself to making non-traditional, nomadic in nature, away from the big crowds lodging choices.
Even before the pandemic, the short-term rental industry was fast emerging as a disruptor in the hospitality business, almost forcing established hotel chains like Marriott and Accor to leap into the sector. While Accor forayed into the luxury home rental market by acquiring Onefinestay in 2016, Marriott launched HVMI in 2019.
Both Marriott and Accor compete by stressing premium properties and brand exclusivity. With their established standards of cleanliness, safety and amenities, as well as their loyalty programs, they can sell the idea of offering much more than merely renting out homes and villas.
Huge inventories
With over 30,000 homes, Marriott curates premium and luxury properties, which are managed by professional property managers instead of individual property owners. All of their homes are professionally cleaned and have a 24×7 support from their property managers.
“Private home rental offerings are tremendously popular, largely thanks to how well they speak to the trend of combining remote work and school with leisure. Homes & Villas by Marriott International is still a relatively small?but fast-growing?part of the company’s overall business,” Jennifer Hseih, vice president, HVMI, told HOTELS. “HVMI experienced a 720% increase in demand Q1 of 2021 compared to Q1 2020, driven by both increasing consumer demand and a higher number of homes on our platform.”
Marriott aims to complement their hotel business with whole homes in leisure destinations, Hseih said. “HVMI is spread across 250 markets, with nearly 40% of those markets being new to the Marriott portfolio – this gives our members more places to travel when staying with us.”
Accor, on the other hand, has over 15 extended-stay hotel brands (including including Adagio, Mantra, and Hyde Living), as well as the company’s portfolio of branded private residences, which are privately owned and frequently included in managed rental programs (Raffles Residences, Banyan Tree Residences, Delano Residences, Fairmont Residences, SLS Residences, etc.) and private rentals (Onefinestay) in over 350 destinations.
“We offer something very different because the flats we rent are within our facilities and have the services and hospitality of a hotel,” an Accor spokesperson told HOTELS. “Guests always have someone to help them and a technician on hand to solve any problem. It is a very safe way to experience the city while enjoying the freedom of a flat.”
Accor continues to develop initiatives in consultation with local shopkeepers and residents to make its communal areas places of meeting and exchange, which it says is a good way of forging links and feeling even more integrated into the city for long stays.
Besides maintaining stringent cleanliness protocols, especially during an ongoing pandemic, Marriot has launched a ‘Quality Assurance Program’ where they conduct audits on homes, cleanliness, safety, service and performance delivered by their property management companies. This has resulted in an uptick of guest satisfaction, Hseih said.
“Contactless check-in is something we know our guests appreciate and so more than 90% of our homes in the U.S. offer it. During the last year, travel has been unpredictable – so we created more flexible cancellation policies to support any last-minute changes in plans,” Hseih added.
According to Accor, fully-equipped kitchens in their apartments make it a safe option for guests. As a result, leisure short-term rentals are overperforming, especially in resort destinations, for summer.
Expansion plans
Both Accor and Marriott have been expanding their inventory of short rental properties, backed by guests’ preferences for active, outdoor destinations.
Hseih noted that there has been a strong demand for premium homes in drive-to and ocean or mountain destinations, and renewed interest in fly-to destinations like Hawaii, Mexico and some of their Caribbean destinations.
“This summer and beyond, HVMI is poised for significant growth, including expansion into new markets globally, particularly in locations where Marriott does not have hotels or where hotels are not economically feasible. One area of focus is Asia Pacific, where we will look to add homes in key leisure destinations,” Hseih said.
For Accor, managed rental programs are sought after by purchasers of branded residences in resort locations. The Paris-based hotel company has an ambitious renovation plan for Aparthotel Adagio, which was launched in 2018, along with plans new properties in Dubai, and in the French cities of Freiburg, Suresnes and Lyon this summer.
While Accor’s branded residences with rental programs have performed well in markets like Acapulco, Mexico, and Telluride, Colorado, they see robust demand for luxury extended-stay brands in oceanfront locations in Dubai.
“Short terms rentals at our Fairmont branded residence project in Acapulco increased 26% year-over-year, as residents of Mexico City sought luxury residence rentals in drive-to oceanfront locations. Similarly, in Telluride, summer 2021 short-term rentals at our Fairmont branded residence property are 127% ahead of last year’s pace,” the spokesperson said. “Fairmont Residences and Estates have been launched in Marrakech, developed along the fairways of the Fairmont Royal Palm Marrakech golf course. Our first Mondrian Residence in Australia was recently launched on the Gold Coast.”
Extending loyalty programs
Extending hotel loyalty programs to short-term rentals has paid off to better compete with the likes of Airbnb.
For Marriott, 27% of Marriott Bonvoy members were already staying at home rentals in 2018. According to Hseih, over 90% of those who book home rentals on their platform are Marriott Bonvoy members.
“HVMI is in nearly 100 destinations where we currently do not have a hotel, giving our members more accommodation options and places to stay.?Those who book through us earn 5 points per US$1 spent and can earn an additional 6 points per US$1 spent when they book using one of our Marriott Bonvoy co-branded credit cards,” she added.
Similarly for Accor, extended-stays, short-term rentals and branded residences with optional rental programs are all integrated into their loyalty program.
Quality over scale
While the likes of Airbnb introduced a unique aspect in the hospitality business, Hseih feels that Marriott’s entry into the short-term rental industry has elevated the sector’s standards in service.
“We care about design, cleanliness, safety and high-end amenities,?and not just scale – which candidly can be overwhelming for the consumer,” she said.
However, the biggest challenge is to maintain a balance between the demand and supply of homes, particularly in summer leisure destinations. “We have a curated approach to each home and only allow homes that meet our rigorous brand standards onto the platform. While this approach requires more time, effort and rigor, we believe it is what differentiates HVMI versus other open platforms that allow anything to be listed for customers.”