Expedia white paper counters theory that Airbnb is stealing hotel market share

Late last year, a Morgan Stanley report suggested that home-sharing sites like Airbnb could be a more of a threat to hotel market share than initially thought. According to the December report, 36 percent of hotel loyalty program members have tried Airbnb compared to 15 percent of non-loyalty members. The numbers remain higher for loyalty members, even when accounting for trip frequency. 

Another Morgan Stanley survey, released in November and conducted in conjunction with AlphaWise, found that Airbnb is an increasing threat to hotels as 18 percent of the 4,000 U.S., U.K., German and French consumers polled reported booking with Airbnb.

Still, worry over Airbnb's threat may be overblown. At least according to Expedia Media Solutions’ latest study, "Multi-Generational Travel Trends," which shows that travelers’ preference for hotel stays still outpace alternative accommodations by a wide margin—at least among the sample of 3,003 German, French and British consumers surveyed.

Hotels are Leading the Way

More than half of these travelers stayed in a hotel during their most recent trip, but at 51 percent, French travelers were the least likely to have included hotel accommodations in their travel and at 17 percent, the most likely to have stayed in alternative accommodations. Sixty-seven percent of British travelers made use of a hotel as did 66 percent of Germans polled; only six and 10 percent of each group respectively stayed in alternative lodging. Even resort didn’t fare as well as hotels, with only 8 percent of Brits, 10 percent of Germans and 9 percent of French travelers having stayed in one during their last trip.

These travelers average more than three trips annually and their vacations average more than nine days in duration, making European travelers a lucrative market for the hotel industry. Europeans, 65 percent of whom travel internationally on vacation, also allot the largest portion of their travel spend to hotel accommodations. Brits and Germans each allocate 31 percent of their travel budget to hotel stays while the French, just 22 percent. Conversely, alternative lodging costs make up a single digit of the total spend for each group, trailing the bottom of the list after flights, food, transportation, shopping and tours and attractions.

Hotels Account for Europeans’ Largest Travel Expenditure

The findings are also consistent even when broken down by age group. Across four generations of European travelers, spanning Boomers to Generation Z, hotels remain the most popular form of lodging and the single largest trip expense, averaging about 28 percent of travel budgets. Sixty-five percent of Millennials and 62 percent of the often-overlooked Generation X stayed in hotels during their most recent trip while 59 percent of Boomers and 58 percent of Generation Z followed suit. Resorts lagged behind significantly with just 10 percent of Generation X and 8 percent of Boomers perusing these accommodations for their most recent travels; Generation Z and Millennials weighed in at 9 percent each. Alternative lodgings among all four generations were only marginally more popular; 11 percent of Boomers and Generation Z stayed in a home-share on their last trip. At 9 percent Millennials were the least likely to stay in alternative accommodations and at 12 percent, Generation X was the greatest consumer of shared accommodations.

Boomers, presumably the most financially secure of the four age groups, spent 31 percent of their travel funds on hotel stays, the most of any generation. Generation Z, with their starting salaries, spent the least: 25 percent. Again, alternative lodging expenses fell to the bottom of the outlay list for each generation, with only a single digit percentage of the total budget dispersed.

OTAs Lead Hotels in Planning, Booking

But where hotels are losing the battle—and with it the war—is in the process of planning and booking. All four generations consider OTAs, search engines, travel review sites, metasearch sites and airline sites, greater resources for travel planning than they do hotel sites. OTAs and search engines attract 48 and 51 percent of Millennials respectively in the planning phase; hotel sites only capture 24 percent of that age group. Fifty-four percent of Boomers use OTAs and another 46 percent search engines when organizing their travel, but only 21 percent include a hotel site in the process.

As far as booking, OTAs are the clear winners in all four age categories, with 50 percent of both Boomers and Millennials making their travel purchases through an online travel agency and 53 percent of Generation X doing likewise. But Europeans of any age don’t have a particularly high propensity for booking direct on a hotel site; Millennials are the most likely to do so at 19 percent and Generation Z the least apt at 14 percent.

Typically, this is attributed to the fact that travelers are looking for value and they want the ability to shop comparatively and/or to book packages, as Expedia’s last white paper on package bookings found. But in this latest study, European travelers of all ages rate activities and experiences close seconds to deals and values. They’re looking for outdoor activities, bucket list and off-the-beaten path experiences and relaxing beach getaways with spa activities. In fact, these travelers prioritized activities and experiences as the driving force in their vacation choices over price, over online reviews and even over recommendations from family and friends.

Most hotel brands’ sites reveal what a destination has to offer once the consumer arrives to a specific hotel’s page. Catering first to the brand and then to the owner is a design flaw that gives OTAs like Expedia an advantage for prioritizing the consumer. Sound like a bold statement? Go to Expedia.com and see how easy the “Things to Do” tab is to navigate. It’s emblazoned across the top of the homepage along with bundle deals, hotels, cars, flights and cruises.

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