The Short-Lived Vacation Rental Advantage Over Hotels Is Almost Gone

This Week in Online Travel

The Covid-driven new world order in lodging, which saw vacation rental sellers such as Vrbo leading the pack among online travel brands, seems to have been short-lived — unless pandemic trends change anew.

Although Airbnb and others have argued that the pandemic has reframed travelers’ lodging choices for the long term and tilted them toward vacation rentals in mountain, beach and rural locations, the Skift Recovery Index found that global hotel bookings reached an equilibrium with vacation rentals in August compared with year-ago numbers.

“There is no doubt that vacation rentals will remain a popular accommodation option, but with the majority of hotels reopened, it seems that August might be the start of a return to some form of normality in the hotel vs. vacation rental dynamics,” according to Skift Research.

Based on data from Duetto, Hotelbeds, Key Data Dashboard, RateGain, Shiji Group, SiteMinder, and Transparent, Skift Research found that vacation rentals benefited when a recovery began in April, but bookings dropped to roughly 50 percent of year-ago levels in August, similar to hotel performance. Global hotel bookings have steadily recovered.

[Update: The rough hotel versus vacation rental equilibrium that Skift Research uncovered globally varies by market. For example, in the United States for the week starting September 6, the booking mix was 40 percent hotels versus 60 percent vacation rentals. The mix was reversed in China where it was 67.5 percent hotels versus 32.5 percent vacation rentals.]

This can all change in a flash if pandemic conditions get more dire, which is possible, but if travelers are seeking out hotels and vacation rentals, then the advantage goes to multifaceted Booking.com, Expedia and Trip.com Group, all of which offer both, rather than the alternative accommodation-mostly businesses such as Airbnb and Tujia in China.

After acquiring HotelTonight in 2019, Airbnb ended investment in its hotel business in March at the height of the coronavirus outbreak. Airbnb can turn on the hotel spigot again, but investors considering Airbnb’s pending initial public offering, in whatever form it might take, would have to consider that Airbnb is not currently as well-rounded in its lodging offerings as its largest competitors.

Airbnb CEO Brian Chesky’s peers among competitors have disagreed with his vision of the future of travel. And for those analysts and companies that may argue that vacation rentals are inherently safer from a cleanliness standpoint than hotels, global travelers apparently don’t concur when you consider their booking choices.

The Thomas Cook Experiment

Fosun Tourism Group, which owns Club Med and has offices in Hong Kong and Shanghai, announced Tuesday it relaunched the Thomas Cook brand “as an online-only travel business.”

This is not a relaunch of the Thomas Cook tour operator business, which collapsed after a 178-year run in 2019, but a diminutive resurrection of the brand, logo and all. Fosun paid $14 million last year for rights to the Thomas Cook trademark, as well as the Casa Cook and Cook’s Club hotel brands.

Incumbent online travel companies have nothing to worry about from the Thomas Cook newcomer for now. But will UK travelers, many of whom loved to book their holidays offline, transition their allegiances in droves based on brand familiarity to an online travel company that touts build-your-own getaways? In an era when any online travel startup has to worry about whether it has enough money to do ample marketing in Google to get noticed, a reincarnated Thomas Cook brand could have an advantage.

At least that’s Fosun’s bet.

In Brief

Oyo’s Global Headwinds

Economy hotel brand and online travel seller Oyo faces a catastrophic pandemic in its home base of India, a bevy of lawsuits in China, and its Latin America business just got saddled with increased oversight in the form of a joint venture with its SoftBank benefactor. Still, Oyo has reshuffled its U.S. leadership, and sees hope in a stateside reboot after downsizing even before the pandemic this year. Reuters and Hotel Business

Expedia Is Marriott’s Favorite Online Tech Partner

What a difference a few years make. Expedia Group is now the technology gatekeeper of Marriott’s wholesale rate distribution globally, as Expedia recently gave travel agents access to these discounted rooms. Formerly considered a pariah by many hoteliers, Expedia also powers flights and packages on Vacations by Marriott. Skift

OK, It’s Not a Hotel-Online Travel Agency Lovefest

UK hoteliers are calling out major online travel agencies such as Booking.com and Expedia for what the lodging companies say is their lack of support during a Covid-19 recovery. Expedia is offering marketing credits to hotel partners, Booking.com hasn’t offered much in terms of monetary relief, and the hoteliers say they haven’t done nearly enough. Hotel News Now

Property Manager HubHaus to Close Doors

Another venture-backed property manager, HubHaus, which offers co-living spaces and private rooms, plans to close up shop, barring a last-minute rescue. HubHaus would join Lyric, StayAlfred and others that ceased operations amidst the coronavirus travel shutdown. The Information

Agoda Exec Puts Pin in Travel Bubbles’ Idea

Until there is a vaccine, travel businesses should focus on domestic travel because safe corridors, or so-called travel bubbles, will not happen at scale, according to Agoda’s  vice president of corporate development Timothy Hughes. “It comes down to one word, one word only, and that’s a vaccine,” Hughes said. “I think anything else is going to be minor and not at scale.” WiT

Note: This story has been updated to include hotel and vacation rental bookings in the United States and China.