3 competitive advantages Airbnb has over hotels
Airbnb (NASDAQ: ABNB) was growing its customer base and income rapidly before the start of the pandemic. The advantages inherent in its business model fueled its growth, making it an attractive choice for travelers.
As widespread COVID-19 vaccinations make a return to travel more likely, here are three use cases where travelers can choose Airbnb over hotels.
1. Group trip
Traveling in a group increases your chances of choosing Airbnb. The company’s platform offers entire accommodations to book for short stays. Unlike a hotel, where you may need to book multiple rooms for your group, on Airbnb you can book a house for your entire party. In many cases, the experience on Airbnb will also be better. If you book a house with a pool, for example, you won’t have to share it with anyone outside the group, unlike a hotel.
It is important to note that group and family travelers spend more on their trips than individuals. With the need for more space to accommodate more people, Airbnb has a lucrative edge over hotels in this category. Airbnb has already seen an increase in group travel as the company recovers from the pandemic.
2. Remote places
Hotels generally focus their offers on places where the number of tourists is high. Think of Los Angeles, Paris, London and Miami. These are cities that hundreds of thousands of people want to visit every year. Hotels need large markets to justify the costs of constructing expensive buildings. They generally avoid rural areas which do not attract large swarms of visitors.
This is another area where Airbnb is winning. With far fewer hotels in non-urban areas, Airbnb offers listings of rooms, and even entire homes, in non-urban areas. Indeed, from the first quarter of 2019 to the first quarter of 2021, active ads in non-urban areas increased by 30% on Airbnb. The company now has 4 million hosts with listings in 100,000 cities around the world.
3. Long term stays
People looking for accommodation for an extended period are more likely to choose Airbnb. A hotel is not very comfortable for a stay of more than a week. Few of them have kitchens, laundry rooms or other accommodation that becomes more important during long stays. On Airbnb, the host will often make such accommodations available to guests renting a room. And they’re definitely available for customers who rent an entire house, condo, guesthouse, or apartment.
The coronavirus pandemic is making remote working a real possibility for many professionals around the world. This means that you don’t have to stay close to your workplace. You can live somewhere for two months and another for three weeks. Airbnb is watching this trend develop. In its fiscal first quarter, 24% of stays lasted more than 28 days, a substantial increase from 14% in 2019.
Airbnb was already gaining favor with travelers before the pandemic. Major lifestyle changes caused by the pandemic are expected to reignite this trend. Investors looking for a stock that will benefit as economies reopen can put Airbnb on their lists.
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