{"id":14407,"date":"2022-03-29T05:57:40","date_gmt":"2022-03-29T09:57:40","guid":{"rendered":"https:\/\/www.holidaykeepers.com\/?p=14407"},"modified":"2024-07-10T07:46:58","modified_gmt":"2024-07-10T07:46:58","slug":"why-vacation-home-industry-is-taking-over-hotel-industry","status":"publish","type":"post","link":"https:\/\/www.holidaykeepers.com\/blogs\/why-vacation-home-industry-is-taking-over-hotel-industry\/","title":{"rendered":"Why Vacation Home Industry is Taking Over Hotel Industry"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">While few sectors escaped the wrath of the COVID-19 impacts, none of them were impacted by the pandemic like the travel sector. Before the outbreak, the travel sector was uninterrupted by market forces for decades. History shows that the travel industry is one of the most sustaining sectors.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The industry has weathered some of the most catastrophic events globally, including the great recession and 9\/11. After every situation, the industry has climbed back and flourished. But with COVID-19, the problem is different as it is unsure for how long the virus will be a threat to the economy. But the good news is, despite the pandemic, consumers have been trying to find ways to travel under changing circumstances. This behavioral change has created some different waves in the travel industry.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Travel Industry At a Glance\u00a0<\/span><\/h2>\n<h3><strong>During the Pandemic<\/strong><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The travel and tourism industry suffered a loss of almost US$4.5 trillion, a significant drop of 49.1% over its GDP contribution.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Its global GDP contribution was nearly halved from 10.4% to 5.5% due to the pandemic travel restrictions.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Nearly 62 million jobs were lost as domestic travelers also decreased by 45% and international travelers by a staggering 69.4%\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The overall global revenue from the pandemic dropped to $447.4 billion, while the original projection estimate for 2020 was $712 billion.\u00a0<\/span><\/li>\n<\/ul>\n<h3><strong>Post Pandemic\u00a0<\/strong><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The US travel sector is anticipating a hike to generate $2 trillion to the US economy by 2022.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The jobs are expected to rise by 26.2%, increasing more than 2.9 million jobs in the US alone.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The average length of the vacation stay period increased from 5.2 days to 5.4 days.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Not only is the travel sector continuing to recover, but instead taking another direction of growth. Families started discovering the benefits of vacation rentals over hotels amid the pandemic restrictions. There has been a rise in family travelers seeking space to enjoy each others\u2019 company beyond the confines of a hotel room and enjoy extended weekend getaways fueled by continuing remote work.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While hotels are still the top choice for most short-term travelers, vacation rentals grew in popularity in 2020 and 2021. The trend is also expected to extend beyond the pandemic as concerns of COVID-19 still linger around. The Q4 of 2021 showed a spike in global accommodation bookings by 50% year-over-year for hotels and vacation rentals.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Statistics of the hotel industry\u00a0<\/span><\/h2>\n<h3><span style=\"font-weight: 400;\">The Global Hotel Market\u00a0<\/span><\/h3>\n<h4><strong>Overview\u00a0<\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The industry\u2019s revenue hit $198.6bn in 2020, after a drop of 46%. The occupancy rate for the US hotel market in 2020 was just 44%.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">On average, hotels operate at a 30% profit margin. However, during the pandemic peak, the profitability reduced to a mere 18%.\u00a0<\/span><\/li>\n<\/ul>\n<h4><strong>Hotel Booking Trend<\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">More people are planning more extended vacation stays well in advance.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The occupancy rate of hotels in the United States was 40.3% in 2020.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In 2019, the Online hotel booking market valued 38,693 million, which faced a steep decline to 15,714 million in 2020.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">But later in 2021, the market value increased to 21,260 million, which later grew to 28,552 million in 2022\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">42% of the bookings were made in rural destinations.\u00a0<\/span><\/li>\n<\/ul>\n<h4><span style=\"font-weight: 400;\"><strong>Employment<\/strong>\u00a0<\/span><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Even though there has been an increase in the employment rate post-pandemic, there is still a dip of 14% in workers &#8211; with 1.3 billion employees in the hotel industry in 2021.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In 2019, almost 2 billion employees worked in the hotel industry in the US, which was nearly halved to 1.1 billion in 2020.\u00a0<\/span><\/li>\n<\/ul>\n<h3><span style=\"font-weight: 400;\">The Global Vacation Rental Market\u00a0<\/span><\/h3>\n<h4><strong>Overview<\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The US vacation rental industry\u2019s total revenue is estimated at $13.3 billion in 2021, with an approximate 10% year-over-year rental market growth rate.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The industry is projected to get close to $20 billion in 2025.\u00a0<\/span><\/li>\n<\/ul>\n<h4><strong>Vacation Rental Booking<\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The user rate increased to 13.1% in 2021, reflecting an increasing trend in the coming years.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Before the pandemic, 80% of the bookings done for vacation rentals were for one week or less. This was reduced to only 30% post-pandemic.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">How Vacation Rental Industry Impacted the Hotel Industry\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Despite the recovery positively impacting the accommodation sector, vacation rentals are jumping back more robust than the hotel sector.\u00a0<\/span><\/p>\n<h3><strong>Quick Facts\u00a0<\/strong><\/h3>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The vacation rentals recovered better than the hotels during the COVID-19 pandemic. The occupancy drop recorded in hotels was 77%, compared to 45% recorded in vacation rentals.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Hotels lose $450 million per year to vacation rentals. There is also a proportional revenue loss for hotel bars and restaurants, room services, spas, and other services.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The top reason people choose vacation rentals is to access the kitchen and more privacy and space.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Vacation rental ADR increased during 2020, hitting an all-time peak of $202.50 in June 2020.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The vacation rentals are relatively cheaper than hotels and cater to travelers who want to feel like a \u201clocal.\u201d\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">More than half of the individuals said they preferred staying at vacation rentals while traveling in the US in a reported survey.\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">People have been exploring more personalized and budget-friendly ways to vacation for a longer time. Short-term vacation rentals that were initially niche specific to family and friends reunions have become mainstream. It is ideal and perfectly matches the demand for more extended stays and more privacy.\u00a0<\/span><\/p>\n<h3><b>References<\/b><\/h3>\n<p><a href=\"https:\/\/www.marketwatch.com\/story\/are-airbnbs-the-new-hotel-rooms-11622820973\"><b>Link 1<\/b><\/a><\/p>\n<p><a href=\"https:\/\/thepointsguy.com\/news\/families-flocking-towards-vacation-rentals\/\"><b>Link 2<\/b><\/a><\/p>\n<p><a href=\"https:\/\/www.statista.com\/topics\/7704\/hotel-industry-in-the-us\/#topicHeader__wrapper\"><b>Link 3<\/b><\/a><\/p>\n<p><a href=\"https:\/\/www.travelagewest.com\/Industry-Insight\/Opinion\/vacation-rentals-vs-hotels-expedia\"><b>Link 4<\/b><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>While few sectors escaped the wrath of the COVID-19 impacts, none of them were impacted by the pandemic like the travel sector. Before the outbreak, the travel sector was uninterrupted&#8230;<\/p>\n","protected":false},"author":2,"featured_media":111697,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":{"0":"post-14407","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-poconos"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Vacation Industry is Taking Over Hotel Industry | HolidayKeepers<\/title>\n<meta name=\"description\" content=\"Discover why the vacation home industry is taking over the hotel industry. 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