The advancement of restrictions on short-term rentals in various cities may favor the traditional hotel sector, and traditional hospitality brands are already preparing to meet this demand, at least that’s what market giants like the Hyatt chain are betting on.
In recent years, platforms like Airbnb have transformed the travel market, impacting prices, tourism, hospitality, and infrastructure in the most desired destinations. This new form of accommodation has changed the way we travel, but also brought challenges to life in major urban centers. The impact of short-term rentals goes beyond tourism, exacerbating housing shortages and prices in cities like Barcelona, Berlin, and New York.
To contain the impacts of the growth of short-duration rentals, several cities have adopted restrictions and new rules, leading to controversies among residents, property owners, and investors. In this context, the traditional hospitality sector has sought to reinforce its strengths to attract this audience.
Regulatory pressure is already reflected in the market: Airbnb’s shares fell more than 6% after the earnings conference call, accumulating a loss of over 7% since the balance sheet was released.
Given this change, hotels are strategically positioning themselves, highlighting attributes that contrast with the weaknesses of alternative accommodations, often associated with risks, lack of standards, and instability. Although seasonal rentals still attract investors, they bring challenges such as high workload, legal barriers, and unpredictable income. Hotels, on the other hand, offer consolidated advantages such as security, cleanliness, 24-hour service, and leisure options, capable of attracting increasingly demanding consumers. Highlighting these points becomes crucial amid the growing frustration of travelers with the limitations of the alternative model.
The current scenario is also an opportunity for hotels to attract digital nomads and business travelers who seek stability and professional infrastructure. Many already avoid seasonal rentals due to unpredictability and prefer hotels for long stays, according to a Morning Consult survey, which shows that 61% of business travelers prefer hotels to seasonal rentals when the stay exceeds seven days.
If Airbnb used to stand out for offering a certain ‘authenticity,’ now hotels have also started to invest in more local and personalized experiences to attract guests. An example of this is the Hyatt Inclusive Collection, the all-inclusive resorts line from Hyatt. ‘In our resorts, we began to invest in local experiences, forming partnerships with small businesses and valuing regional cuisine, without giving up on technology, with solutions like digital check-in and personalized services,’ explains Antonio Fungairino, Head of Development for the Americas at the Hyatt Inclusive Collection.
Hotels can invest more in extended stays, with third-party management by specialized operators, making the model more practical and profitable. Long-duration accommodations have more stable occupancy and predictable cash flow. Operating multiple units allows for economies of scale and higher profitability.
Investing in multiple units in extended stay hotels helps spread risks and deal with instabilities. Eyeing this market, some chains have launched new brands focused on this model, betting on greater resilience and profitability. With pressure on Airbnb for its impact on neighborhoods, hotels can reposition themselves as leaders in sustainable tourism, creating jobs and contributing to the local economy.
