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 sought-after destinations. This new form of accommodation has changed the way we travel, but it has 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 effects of the growth of short-term rentals, many cities have adopted restrictions and new rules, sparking controversy among residents, property owners, and investors. In this context, the traditional hospitality sector has sought to reinforce its competitive advantages to win over this audience.
Regulatory pressure is already reflected in the market: Airbnb’s stock fell more than 6% after its earnings call, accumulating losses of over 7% since the release of its balance sheet.
In light of this shift, hotels have been strategically positioning themselves, highlighting attributes that contrast with the weaknesses of alternative accommodations, often associated with risks, lack of standardization, and instability. While short-term rentals still attract investors, they come with challenges such as high workload, legal barriers, and unpredictable income. Hotels, on the other hand, offer established advantages like security, cleanliness, 24/7 service, and leisure options, capable of attracting increasingly demanding consumers. Emphasizing these points becomes crucial amid growing traveler frustration with the limitations of alternative models.
The current scenario also presents an opportunity for hotels to attract digital nomads and corporate travelers who seek stability and professional infrastructure. Many now avoid short-term rentals due to unpredictability and prefer hotels for long stays, according to Morning Consult research, which shows that 61% of corporate travelers prefer hotels over short-term rentals for stays exceeding seven days.
If Airbnb once stood out for offering a certain ‘authenticity,’ now hotels have also started investing in more local and personalized experiences to attract guests—an example being the Hyatt Inclusive Collection, Hyatt’s all-inclusive resort line. ‘In our resort line, we’ve started investing in local experiences, partnering with small businesses, and highlighting regional cuisine, without sacrificing technology, with solutions like digital check-in and personalized services,’ explains Antonio Fungairino, Head of Development for the Americas at Hyatt Inclusive Collection.
Hotels can invest more in extended stays, with management outsourced to specialized operators, making the model more practical and profitable. Long-term accommodations have more stable occupancy and predictable cash flow. Operating multiple units allows for economies of scale and greater profitability.
Investing in multiple extended-stay hotel units helps dilute risks and face instability. With an eye on this market, some chains have launched new brands focused on this model, betting on greater resilience and profitability. With pressure on Airbnb over its impact on neighborhoods, hotels can reposition themselves as leaders in sustainable tourism, creating jobs and contributing to the local economy.
