How Short-Term Rentals Are Faring Better Online Than Hotels During Crisis: New Skift Research

In our latest report, Skift Research explores the damage done to the online travel industry by the coronavirus at both the industry and individual company level.

We believe that the largest seven public online travel agencies will lose at least $11.5 billion in revenue this year due to the virus. The impact could even go higher, potentially as much as $20 billion in missed revenue. We also find some signs that businesses which cater to the short-term rentals and airline segments are outperforming the hotel business.

Finally this report analyzes public statements made by the largest three online travel agencies in the world, Booking Holdings, Expedia Group, and Trip.com. We break down and quantify what those management teams have said specifically about Covid-19.

Below is an excerpt from our Skift Research Report. Get the full report here to stay ahead of this trend.

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Online Travel Sub-Sectors

The online travel sector encompasses several different business models and clienteles. We wanted to delve into three major business types — full-service OTAs, short-term rental OTAs, and metasearch — to understand how each is being impacted.

We turned back to SimilarWeb to answer this question from a traffic perspective. This time we looked at total page visits, not just limiting ourselves to transactions. That’s because metasearch sites will have different transaction conversion rates than booking sites and we wanted to be able to compare apples-to-apples metrics. We also used individual domains, rather than rolling up to the parent level, so that we could see how a parent company’s metasearch sites performed differently from its other properties. The websites analyzed were airbnb.com, booking.com, expedia.com, kayak.com, priceline.com, skyscanner.com, tripadvisor.com, trivago.com, vrbo.com.

Each site was aggregated across seven countries: The U.S., UK, Italy, France, Germany, Japan, and Hong Kong (e.g. booking.com, booking.it, and booking.de all roll up to booking.com). Again, we created a moving average and index to compare relative changes in page visit volume.

What we found was that in aggregate, web traffic to online travel websites is down by 70 percent globally. However, splitting the online sites into different sub-sectors shows varying degrees of damage.

Exhibit 5: Online travel web traffic down 70 percent-plus globally

Online booking sites focused on short-term rentals seem to be outperforming their hotel-heavy, full-service peers. We suspect that this reflects the recent phenomenon of families temporarily leaving their homes in dense cities, where the coronavirus outbreak is worse and where home confinement in a small apartment is more restricting, to temporarily relocate to less-crowded suburban or rural destinations. This appears to be true at both Airbnb and Vrbo.

Exhibit 6: Some evidence suggests that short term rental sites are doing a bit better than hotel peers

The comparison of Expedia Group’s main websites demonstrates this relative dynamic nicely. Vrbo is the best performing of all three sites with its focus on short-term rentals, many of which are full-sized homes in vacation destinations. The full-service OTA is in the middle of the pack, whereas hotel-heavy metasearch site Trivago is doing the worst.

Exhibit 7: Vrbo seems to be among Expedia Group’s best performing sites

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This is the latest in a series of research reports, analyst sessions, and data sheets aimed at analyzing the fault lines of disruption in travel. These reports are intended for the busy travel industry decision-maker. Tap into the opinions and insights of our seasoned network of staffers and contributors. Over 200 hours of desk research, data collection, and/or analysis goes into each report.

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