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 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 curb the impacts of the growth of short-term rentals, various cities have adopted restrictions and new rules, which has sparked controversy among residents, property owners, and investors. In this context, the traditional hospitality sector has sought to reinforce its differentiators to win over this audience.
Regulatory pressure is already reflected in the market: Airbnb’s stock fell more than 6% after the earnings conference call, accumulating a loss of over 7% since the release of the financial statement.
Faced with this change, hotels have been 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 like security, cleanliness, 24-hour service, and leisure options, capable of attracting increasingly demanding consumers. Highlighting these points becomes crucial amid growing traveler frustration with the limitations of the alternative model.
The current scenario is also an opportunity for hotels to attract digital nomads and corporate tourists, 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 corporate travelers prefer hotels over seasonal rentals when the stay exceeds seven days.
If Airbnb once stood out for offering a certain ‘authenticity,’ hotels have now also started investing in more local and personalized experiences to attract guests. An example of this is the Hyatt Inclusive Collection, Hyatt’s all-inclusive resort line. ‘In our resort line, we have started investing in local experiences, partnering with small businesses and valuing 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 higher profitability.
Investing in multiple units in extended-stay hotels helps dilute risks and face instabilities. Eyeing 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, generating jobs and contributing to the local economy.
