Is Airbnb Beating Resorts for Millennial Travel Bookings?
Most Airbnb business comes from millennial travel, so resort marketing needs to offer the travel experiences millennials still crave.
Like a lot of services offered by the new sharing economy, Airbnb’s business model appeals to many millennial travelers. And since millennials now make up not only the largest generation — but the biggest one in history — any travel audience development agency needs to see courting them as key to finding more customers and sustaining growth. Learn why Airbnb appeals to millennials and how hotel and resort marketing might transform to court this large and well-traveled generation.
The popularity of Airbnb for millennial travel business
In order to understand why Airbnb has offered such fierce competition for traditional hotels and resorts, it’s important for an audience development agency to learn more about how millennials view travel. According to Slice Intelligence data, sourced directly from digital consumer receipts, Airbnb enjoyed an almost 90-percent revenue growth during the same period when the large hotel booking sites only increased earnings by about 19 percent.
Slice Intelligence also found:
- Just about half of the Airbnb customers fell between the ages of 18 and 34. At the same time, that age group accounted for less than 30 percent of Marriott guests.
- Airbnb customers paid average nightly rates about 25-percent cheaper than hotel guests did. At the same time, they tended to stay longer.
- While average Airbnb prices matched most closely with budget motels, guests stayed an average of 3.5 nights, which tends to reflect typical stays of more luxurious hotels and resorts.
- Slice also found that almost 40 percent of their guests booked at least a month in advance, compared to an average of 23 percent on other large hotel booking websites.
Since the Airbnb guests tended to stay longer, it’s fair to assume that many of Airbnb’s customers didn’t necessarily plan to save money on their overall trip. Judging by the fact that they were also more likely to book rooms well in advance, it looks like many of these travelers made careful plans to maximize value.
Choosing Airbnb isn’t all about price for millennial travelers
According to Airbnb’s own survey of its millennial customers, choosing the home-sharing service isn’t all about prices and value. They found this group considers travel an important aspect of their life and many prioritize it over reducing debt, saving for a home, and other long-term goals. Over 80 percent of the millennials surveyed said they wanted travel to offer them a unique and personal experience with a chance to experience local culture. A majority expressed an interest in staying in interesting neighborhoods, dining in locally run restaurants, meeting new people, and enjoying a more adventurous trip.
These travelers probably don’t mind getting a good deal on their room, but they’re also motivated by the chance to set their own itineraries and experience a destination outside of what they may consider the facade of an all-inclusive resort or planned tour. Any travel audience targeting agency needs to focus on the importance of experience for younger adults and not just on prices. Younger adults also felt like Airbnb had a more sustainable and eco-friendly business model since at least originally, it focused upon simply sharing a room in a family home.
How can hotel and resort marketing better compete with Airbnb?
While the millennial generation makes up a large portion of Airbnb’s customers, Resonance Consultancy surveyed members of this group who had booked overnight stays within the past year. A majority still picked hotels and resorts as their first choice. By taking a look at some of the things that these travelers considered important, an audience targeting agency can demonstrate how their resorts and hotels deliver.
Safety and privacy
While respondents typically said that they considered price important, they also cared about safety and privacy. They felt traditional lodgings did a better job of delivering these two important considerations.
Wellness, comfort, and luxury amenities
Millennials may value their travel experience; however, not all prioritized the experience of staying in a local neighborhood over everything else people tend to associate with a hotel or resort stay. For instance, most Airbnb lodging lack the sort of spas and swimming pools found at luxury hotels and resorts.
Some businesses have even turned to Airbnb for employee travel. At the same time, hotels generally offer such services as business centers, meeting rooms, and high-speed WiFi to court business travelers.
People tend to associate Airbnb with moderate prices, but according to Hotels Online, that comparison doesn’t always hold up. Particularly in some markets, average prices for Airbnb rooms sometimes meet or even exceed the average daily rates in hotels.
Promotions and packages
Hotels can run loyalty programs that improve the chance of repeat businesses. They also generally have the resources to put together experiential packages that might include dining, tours, and other experiences to provide a good experience and a good value.
If some guests hope for more immersion in local culture, resorts and hotels are in a good position to come up with such creative ideas as a locally owned restaurant, bar hop, or street market tour. Also, traditional lodging businesses tend to employ lots of local people who can provide friendly, face-to-face service and interaction with guests 24/7. That’s not a resource that Airbnb guests can typically count on.
While sharing a home with local residents appears more sustainable than maintaining a hotel or resort, these traditional travel businesses can do their part and make certain guests know about it. Also, Airbnb has generated quite a bit of controversy lately since some property owners have invested in homes just to use as rentals, which has caused housing problems in some cities and driven up rental rates.
Finding more customers by courting millennial travel
Naturally, successful hotels focus upon knowing their customers. These days, they also need to court more customers by getting to know travelers who may have made decisions to book with Airbnb or other alternative kinds of lodging in the past. If these guests want particular amenities or experiences, traditional travel businesses just need to let their market know that they can provide them and much more.