OperationsMarketingHow Hotels Can Differentiate Themselves From Short-Term Rentals and Gain Market Share

How Hotels Can Differentiate Themselves From Short-Term Rentals and Gain Market Share

Years ago, low interest rates inspired many people to buy homes and turn them into short-term rentals through platforms like Airbnb. As the short-term rental model rose in popularity, it created extra competition for hotels. Now that people are traveling more post-COVID, how can hotels differentiate themselves from short-term rentals and regain market share?

Hotels should promote the advantages of staying on their property versus a short-term rental, spotlighting their superior safety, quality, and operational excellence as key differentiators over renting someone’s house. When guests stay at a short-term rental, they never truly know what they’re getting. They’re staying in a stranger’s house, with no standards or regulations whatsoever around safety, quality, or cleanliness.

Here’s how to demonstrate that a hotel is a better option:

  • Spotlight exceptional service. Guests often want a break from their usual domestic drudgery (cleaning, laundry, picking up messes, etc.) while on vacation. Booking a short-term rental means doing chores—making the bed, washing dishes, picking up wet towels from the floor, etc. But in a hotel, exemplary housekeeping means guests don’t have to clean their rooms. They can also enjoy extra amenities—like extra pillows, toiletries, and room service. Showcase the hotel’s exceptional operational, quality, safety, and brand standards, and show guests they will experience the same best-in-class service at every property across the brand.
  • Provide consistently high cleanliness standards. The COVID-19 pandemic escalated cleaning and sanitation standards, which won’t go away. Guests expect to see spotless rooms and frequent cleaning of high-touch locations (e.g., front desk, elevator buttons, doorknobs, gym equipment). Many hotel brands have implemented sanitation programs, which include upgraded sanitation protocols, the use of hospital-grade disinfectants, and more frequent cleaning of lobbies, gyms, and other public areas. Conversely, short-term rentals don’t have set standards or quality programs, so they’re not all reliably clean.
  • Use a “combo approach” to auditing. Auditing ensures that brand standards are consistently being followed. Amplify a hotel’s auditing efforts with a combination approach of traditional third-party and remote audits, self-inspections, and internal audits where one location inspects another. Benefits of a blended approach include more frequent, cost-effective, impartial, collaborative inspections.
  • Diversify portfolios. Unique experiences, themed rooms, and special events can set properties apart from short-term rentals. Themed packages and experiences are standard for some chains, and even smaller brands are now developing cool themes. After the disruption of the COVID-19 pandemic, followed by today’s economic uncertainty, brands that haven’t historically offered themed experiences and events may now want to implement these differentiators to stay competitive.
  • Promote the luxury experience. Many hotels offer luxuries to make guests feel special, including daily housekeeping, designer toiletries, onsite personal trainers, spa services, and more. Inform guests about the hotel’s upscale services like drivers, butlers, and concierges who can help make their stay extraordinary.
  • Incentivize guests with loyalty programs. Provide a rewards system for repeat guests to build customer loyalty and combat competition. Allow guests to earn points towards perks like late checkout, room upgrades, free chocolates upon check-in, dedicated front desk teams, etc. Short-term rentals simply can’t compete with this.
  • Highlight the stress-free experience. Short-term rental hosts could suddenly cancel reservations and ruin guests’ vacations. And if guests need to change the dates of their stay, it’s far easier to adjust hotel reservations versus rental stays. When the showers don’t drain, the air conditioners are broken, or anything else goes wrong, the hotel’s staff will fix these problems immediately or change the guests’ rooms, as necessary. At a short-term rental, guests are at the mercy of their hosts, who may (or may not) be responsive.

Bottom line: Short-term rentals have no set standards around quality, safety, or cleanliness, and guests could wind up with a house that is not at all as advertised. For instance, “work-friendly” accommodations might not even have a desk or WiFi. A “gourmet kitchen” could come with only one pot and a single can opener. An “antique-filled” rental could feature ratty, old furniture from a second-hand store. Conversely, hotels follow strict standards, allowing guests to stay someplace safe, clean, and comfortable, where every need is met and help is only a phone call away.

Kelli Fox
Kelli Foxhttps://rizepoint.com/
Kelli Fox is the director of customer success at RizePoint, a technology provider in the food safety, quality management, compliance, and social responsibility space.