There have been big developments in the hotel industry lately.
The sector was severely disrupted when Airbnb (ABNB) – Get a free report entered the scene in 2008 and allowed people to rent their homes to travelers, providing a flexible alternative to hotels.
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Especially for stays longer than a month, the 20% to 30% discount offered by many owners turned some into “Airbnb converts” who were able to save some money while also feeling like they were better connected to the local culture.
Airbnb has more than six million active listings worldwide.
So the hotels decided to take action and get into the vacation home business.
Examples include Homes & Villas by Marriott Bonvoy, Onefinestay by Accor (ACYY) – Get a free report and Mandarin Oriental Exclusive Homes. (JMHLY) – Get a free report
Offering short term rentals.
Hyatt Hotels (h) – Get a free report wants a piece of that action.
The Chicago hotel company plans a new short-term vacation rental platform, Homes & Hideaways by World of Hyatt, that will feature private homes and remote hideaways across the US.
The offering is expected to launch in the coming weeks, the company said on September 28.
World of Hyatt members will have direct access to book a collection of short-term private home rentals, from beachfront getaways to mountainside ski chalets, where they can earn and redeem points beyond the traditional hotel stay, the company said.
“We are committed to evolving access to the type of accommodations World of Hyatt members are looking for beyond our hotels, from a large family traveling together or guests looking to work from anywhere for an extended period of time,” Amy Weinberg, Hyatt’s senior vice president of brand, loyalty and data, said in a statement.
Lowe, formerly Lowe Enterprises, a Los Angeles firm that invests, develops and manages real estate, said it had acquired Hyatt’s vacation rental management business.
Airbnb faces challenges
Things have changed a bit since the beginning of Airbnb.
Between 2019 and 2023, Airbnb’s average price increased by 36%, while prices at major hotel chains like Hilton and Marriott (SEA) – Get a free report they increased only 12.8% and 7.8% respectively during the same period.
A study by UK-based travel consumer watchdog Which? found that hotels are cheaper than an equivalent one-bedroom apartment on Airbnb or short-term rental provider Vrbo in 38 of 50 destinations popular with travelers.
Airbnb called the data “flawed” and said it “overstates Airbnb prices and compares standard hotel rooms to entire places.”
The company also has problems in New York.
Under a new ordinance, rentals of less than 30 days are only allowed if hosts register with the city, agree to be physically present in the home for the duration of the rental, and share the home with their guests.
Airbnb has said the new rules amount to a “de facto ban” on the platform and CEO Brian Chesky said he was saddened and disappointed by the city’s decision.
However, he said the company is now looking at Paris and other European locations.
Chesky traveled to Paris to help the city plan for what is expected to be a huge surge of tourists for the 2024 Olympics.
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