According to recent survey conducted by LendEDU, vacation rentals are preferred by millennials as compared to big-name hotels. This shift in short-term vacation stay preferences is having a major impact on the hospitality industry since millennials are predicted to spend $1.4 trillion on travel each year by 2020. These numbers are quickly making millennials the most lucrative and sought-after demographic for hospitality service organizations. Now more than ever, the vacation rental industry has an opportunity to dominate the hospitality market by providing a predictable, consistent, and reliable experience similar to what’s expected from a hotel. However, the question is how to get there.
In LendEDU’s survey, 37% respondents indicated that Airbnb was the “cheaper, preferred option” when compared specifically hotels. While respondents agreed that “the benefits of a hotel are worth the added cost” the fact that short-term vacation rentals are now preferred could mark the end of the hotel’s monopoly on the hospitality industry that has been looming for decades.
How Millennials Are Making Way for Short Term Vacation Rentals
One of the first reported impacts of short-term vacation rentals dates back to 2015 when Fast Company shared Marriott’s attempt to win over millennial travelers. In fact, Wolfgang Lindlbauer, Chief Discipline Leader, Global Operations at Marriott International stated that “what we’re seeing is that the next-generation of consumer wants the exact opposite of what we’re providing.” Since 2015, this conservative hotel brand has been transforming its traditional image into a hot, hip, sexy brand to attract younger travelers. The brand did an enormous amount of market research and discovered that Millennials enjoy travel brands that have strong local connections and provide one-of-a-kind experiences.
Meanwhile, other hospitality brands are taking different approaches ranging from the acquisition of full-service property management companies catering to vacation rentals to launching brand new product lines. Rather than restructuring a brand’s offerings, they are creating new hotel brands with an experiential focus, along with the digital and social comforts craved by Millennials. For example, Radisson brought its Radisson Red hotel chain to the USA. This boutique offshoot of the global chain offers guests extreme personalization through a mobile app. This app powers a guest’s experience, from hotel check-in to amenity arrangements, to stocking the in-room mini bar. This will meet young travelers’ needs for mobile convenience and digital access.
Yet, based on LendEDU’s recent survey, these types of efforts do not appear to be enough to keep up with unique, one-of-a-kind vacation rental options now offering the same hotel-like guest experience.
Frankly, the Millennial market has a new, and interesting set of expectations when traveling and it’s a lot to balance.
Unique Cultural Experiences
Millennials said they would pick a destination because they want a unique life experience or to experience a particular culture. In fact 72% of are choosing to spend more money on experiences than material items, while 78% want to learn something new while they travel.
“Bleisure” Travel Introduction
Along with new trends come, of course, come new terms. Mixing business with leisure, “bleisure” travel is more popular than ever amongst Millennials. According to Expedia, employees under 30 are traveling 4.7 times per year on business compared to 3.6 times for those above 30 years old. From there, 62% are more likely to extend their business vacations to gain cultural experience and see more of the world, all on their company’s dime.
Increase in Group Travel
Travel is becoming increasingly attractive, safe, and less expensive when planned with a group. Millennials enjoy the freedom to explore while in the safety net of a larger group should something go awry.
Interestingly enough, this idea of group travel doesn’t only apply to younger crowds. TurnKey’s CEO, John Banczak, was recently quoted in US News stating, “travelers with families used to skip going to cities like New York, Los Angeles, San Francisco or Chicago because of the high cost of one or more hotel rooms. Now, they will because they can find a short term vacation rental home with enough space and home amenities at affordable prices.”
Where Short Term Vacation Rentals Have an Opportunity to Dominate
Despite the positive outlook for Airbnb and other vacation rental services, just over a quarter of survey participants (27%) claimed that “Airbnb feels sketchy and not as accommodating” (see chart above). If Airbnb and other vacation rental services can make every experience with their platform and properties an enjoyable one, they will be able to shift the mindset to join the 37% who feel Airbnb or vacation rental as their preferred lodging option.
The key to the success of short-term vacation rental is to ensure every visit and every property provides a constant experience but at a fraction of the cost. This is our goal at TurnKey Vacation Rentals.
Every TurnKey-managed home is clean and ready to be enjoyed. It should be just as easy to rate the cleanliness and your rental experience as it is to rate your Uber driver. At TurnKey it is; each guest rates the clean upon arrival. Our housekeepers keep track of their average rating for their cleaning jobs and if their rating dips below 4 stars, TurnKey re-trains them or chooses another housekeeper.
Guests provide the final seal of approval but there are many measures in place to make sure our homes are clean to the highest standard. In each market, we recruit the best housekeepers to partner with and pay a high living wage. We’ve even implemented a unique housekeeper photo verification process to ensure perfect execution. In-person inspections are executed by local staff periodically.
Over the past 4 years, the percentage of guests booking online has increased from 53% to 77%, according to Phocuswright. TurnKey’s properties are fully bookable online with clear cancellation policies and 24/7 phone reservation support—making our vacation rentals as easy, or easier to book than hotels.
Guests Know What to Expect
With TurnKey, you can expect high-end accommodations that are consistently comfortable and in perfect working order. All of TurnKey’s listings are photographed by a professional photographer who accurately highlights each home’s amenities. Each caption details exactly what each photo is depicting so guests know what to expect. The location is accurately shown so guests have a clear indication of where they will be staying.
Safety and Convenience Technology
When guests choose to book a vacation rental rather than a hotel room, we want arriving and entering that rental to be even easier than checking-in at a front desk to receive a room key.
All homes under TurnKey management are outfitted with an advanced digital lock at no cost to the homeowner. In addition to providing security through unique door codes to each guest, TurnKey’s digital locks provide exceptional convenience to guests.
Always Guest Ready
Guests are always supported if any issue arises. Our guest support agents are available 24×7 to courteously answer any question. If there is an urgent issue, our local team will respond quickly day or night.
If you’re interested in how TurnKey Vacation Rentals can provide a hotel-grade guest experience to help increase your property’s revenue simply fill out the form below and a member of our team will be in touch!