HotelsShort-term rentals continue to hold sway, but hotels are also gaining lost ground: STR report.

Hotels vs short-term rentals: Who's winning the traveller preference war?

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Most travellers are opting to use hotels, which signals strong underlying interest in this traditional form of accommodation.
Most travellers are opting to use hotels, which signals strong underlying interest in this traditional form of accommodation. Photo Credit: GettyImages/Boyloso

Hotels are slowly gaining ground over short-term rental units as more and more people took to travelling in the last few months, according to STR’s latest hotel performance report.

Its data showed that 51% of travellers for an upcoming or recently undertaken trip selected a hotel as their top choice in July 2022, which is four percent more than the same period last year.

“Indeed, since July 2021, most travellers have opted to use hotels, which signals strong underlying interest in this traditional form of accommodation,” the report stated.

However, a slight decline in hotel engagement in July 2022 was detected compared to May 2022 (56%).

Hotels vs short-term rentals: Who's winning the traveller preference war?

But STR said this could be related to seasonal travel patterns where customers choose different accommodations, such as camping and caravanning, or participated in other type of trips compared to those earlier this year.

For leisure trips though, hotels were less preferred than short-term rentals, suggesting that although there has been some progress in hotel preference since May, there is ground to regain yet.

Released early September, the findings generally show a positive trajectory for travel. Thus, understanding consumer preferences and actual behaviour regarding choosing accommodation and destinations is crucial intelligence to enable more effective marketing.

Accordingly, STR’s data revealed that urban destinations continued to intrigue travellers as nearly half of those surveyed booked such trips.

In fact, those who selected those destinations were “far more likely” to pick hotels as their accommodation choice, as opposed to rural destinations where short-term rentals were more appealing.

“Hotels are more common in urban destinations while short-term rentals are more often found in rural destinations. Nonetheless, the analysis reveals an important link between urban destinations and hotel performance recovery,” STR said.

Hotels vs short-term rentals: Who's winning the traveller preference war?

Having said that, the report highlighted that countryside destinations continue to pique travellers’ interest as outdoors trips were higher than other trip types.

Meanwhile, full-service hotels, which are defined by STR as having multiple facilities onsite, including restaurants, are in “high demand”.

“Leading the way as the most popular hotel type, this property type has grown in favour recently. This is likely due to a shift in needs as consumers, eager to make up for lost time after restrictions, seek additional levels of service and comfort,” it wrote.

As for smaller hotels with less than 50 rooms, surveyed travellers found them to be appealing in the current environment, possibly due to “lingering concerns and increased desire” for personal space as a result of Covid-19.

Conversely, limited-service hotels, as the name suggests, are the “least sought-after” type of hotel, currently, the report stated.

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