Short-term rental companies like Airbnb and Vrbo are facing tough times. Hotel giants want to take advantage.
Hospitality companies are increasingly leaning into extended-stay accommodations to make up market share from the relatively recent arrivals in the hospitality sector, Bisnow reported.
Extended-stay projects account for 32 percent of the hospitality construction pipeline, according to Lodging Economics, a share expected to increase tremendously in the next month. At the end of the second quarter, there were more than 214,000 such rooms in the pipeline.
Meanwhile, many hotel companies of note have launched a product akin to an extended-stay option. Hyatt Studios targets the upper-to-midscale category, while Marriott International is growing its more affordable, midscale extended-stay option; Marriott already has Homes & Villas by Marriott Bonvoy, an option for short-term renters.
Wyndham also recently announced plans to add more than 60 properties to its Echo Suites Extended Stay brand in North America. That move will bring the brand’s portfolio to 265 properties.
Short-term rental companies were a winner during the pandemic, as they filled a needed niche during times of social distancing and isolation. Investor interest in the sector ramped up when Blackstone and Starwood acquired Extended Stay America in 2021.
But while Airbnb was largely a step ahead of some of the major hotel companies, the ubiquitous lodging start-up has faced setbacks. Airbnb CEO Brian Chesky said in a recent interview told Bloomberg the company needed to “get our house in order,” including a need to be more competitive in areas like pricing and implementing artificial intelligence.
Airbnb recently took a big hit in New York City when Local Law 18 landed this year, virtually wiping unregistered listings off the market. In the city, the company is trying to lean more into “experiences” to cope with the loss of revenue from listings.
— Holden Walter-Warner
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