Once travel rebounds and hotel rates start trending up, Airbnb could once again have an edge with its presumed more affordable rates. However, promoting all-inclusive prices, longer-term nightly discounts, F&B credits and other tactics could keep hotels competitive for economy-minded guests.
Today, in Part 3 of this series on competing with short-term rental companies like Airbnb, HOTELS Contributor Megan Rowe reports about how to compete with more thoughtful approaches to rates, fees and bookings. Here are links to Part 1 and Part 2 of the series.
Cancellation penalties, common to Airbnb users, are not typically an issue with hotel stays, although high-demand dates and locations tend to be exceptions, and that will likely continue. And short-term rental cleaning fees, which can tack on hundreds to a week-long stay, often inflate the effective rate enough to erase any savings. A weekly rate at a hotel becomes attractive.
During 2020, hotel staycations and workcations, which bundled amenities and discounted rates for longer stays, kept many resorts relatively busy. Proper Hospitality’s Brian De Lowe said his group will continue to offer long-term stay rates and packages. “While not the most attractive option for the most price-sensitive traveler, our long-stay rates do provide great value without sacrifice,” De Lowe said.
Value also matters, and determining what guests consider value will be key to competing. For Proper’s guests, the idea of reducing COVID-related stress and fatigue inspired a recent Proper Reset Weekend at the Austin, Texas, location. It featured meditation, sound healing, yoga and other restorative services. A recently opened spa at the Santa Monica Proper offers a wellness experience rooted in modern Ayurveda that restores balance to the body and mind.
Loyalty remains a huge trump card for hotel companies, and with so much pent-up travel demand, redeeming and earning points will take priority when choosing accommodations. “Travelers are sitting on a massive stockpile of points that they’re itching to use right now,” observes Scott Mayerowitz, executive editorial director at The Points Guy, a website for frequent travelers. “For those who have cared about loyalty, it still remains at the center of their universe.”
In the end, Jeff Doane, chief commercial officer for Accor, North & Central America, said loyalty programs are part of the value equation that will encourage hotel bookings. The best way to drive direct bookings, he argued, is “to make a brand promise that is differentiating and compelling. As there is so much transparency in the marketplace today, companies have to keep their promise and ensure there is a value proposition to entice customers to book directly rather than search the general marketplace.”