Domestic vacation rentals are the current success story in the lodging industry

Globaldata Travel and Tourism 11th June 2020 (Last Updated June 11th, 2020 15:00)
Domestic vacation rentals are the current success story in the lodging industry

The likes of Airbnb, Expedia Group’s Vrbo and Booking Holdings have all experienced a recent spike in domestic bookings in rural areas.

Would-be travellers have been confined to their homes for a number of months, they may have less disposable income due to mass job losses and furloughs across the globe and do not want to travel internationally due to ongoing fears around Covid-19. These factors have now driven travellers towards vacation rentals in domestic, rural areas where they will benefit from a change of scenery at a relatively low price, while feeling safe and secure in a low traffic area.

Airbnb said it booked more nights for US listings between 17 May and 3 June compared to the same weeks one year ago. Since the pandemic began four months ago, the percentage of bookings on Airbnb within 200 miles of the guest’s residence has grown from one-third in February to more than 50% in May. This trend is not just specific to the US, it is now being emulated across the globe.

Data from Airbnb suggests that New Zealand has also seen a resurgence in short-term rental bookings in May. Domestic bookings through the site saw a sharp rise as the country moved into its second week of level 2 restrictions, which started to permit some domestic travel. In line with findings in the United States, New Zealanders are increasingly deciding to book stays at nearby, drivable destinations, with over half of trips booked within a 320km distance and just over a quarter booked within 80km from guests’ homes between May 9 and May 16, according to AirDNA.

According to GlobalData’s 2019 Q3 consumer survey, 44% of global respondents now use online travel agencies such as Expedia and Booking.com when booking a holiday. This should mean that home-sharing related ventures initiated by major companies in the online travel agency space would be providing current success.

However, Expedia is now planning to shut a short term-rental business it birthed two years ago. The current streamlining of operations within Expedia, combined with a lack of urban demand due to Covid-19, means that the group is phasing out a suite of software tools called ‘Flexible Living platform’. This platform was created to help landlords – particularly in urban areas – to attract short-term rental bookings for empty apartments. With the financial implications created by Covid-19, it is not uncommon for large-scale travel companies to cut back on more experimental ventures to focus on their core operations, in order to create a more sustainable business.