Data on AirBnB Bookers Shows They Seek Choice, Cheaper Rooms
Never before have travelers had so much choice when it comes to travel accommodations. Many of us Google “[city] + hotel,” and are given direct links to hotel brands, as well as online travel agents like Travelocity. Even Google is getting in on the action, with its interactive map of hotel results. Travelers can compare prices, zero in on a particular neighborhood, and shop based on features or stars a hotel holds.
And yet, most hotel chains have seen declines in conversions in recent months. The reason? It might be the little upstart that could, AirBnB. While conversion rates have held relatively steady for the top three hotel chain brands (IHG, Hilton, Marriott), AirBnB has the lowest conversion rates among these four.
However, this is where things get interesting. AirBnB has shown significant growth, now accounting for 33% of conversions among these top four players in the accommodation space. Their year-over-year growth is striking when measured by monthly conversions:
But since AirBnB has a relatively low conversion rate, they’re making up the difference with sheer traffic. In the first four months of the year, Airbnb.com gained 12% more traffic year-over-year. More traffic means more conversions, even if comparatively, it’s seeing that lower rate than the more established hotel chains.
Why AirBnB is Killing It
We can speculate as to why people are flocking to AirBnB. Perhaps they’re tired of cookie-cutter hotel chains and prefer more exotic accommodations like tree houses and riverboats. Maybe they prefer staying in a home or apartment that allows them to have more of a local’s perspective of a city rather than that of a tourist.
More than likely, the biggest driver for AirBnB’s success is the unbeatable selection and more affordable options.
While it’s certainly not true for every city where AirBnB has a presence, the site sometimes offers the most affordable accommodation options, as it does in cities like New York City, Tokyo, and Moscow, as shown in this slide from Mary Meeker’s Internet Trends 2018.
AirBnB’s growth shows no signs of slowing down. With an incredibly easy onboarding process for people who want to rent out their homes, active listings have climbed at an impressive rate, doubling from 2015 to 2016.
Who Does AirBnB Draw?
Booking.com has recognized AirBnB’s success in the non-hotel lodging space, and has said they’ve hit 5 million non-hotel listings, just ahead of AirBnB’s 4.85 million listings. They still have to make up the gap they have in getting people to book these listings. To do so, Booking.com (as well as their hotel chain competitors) might look to the behaviors of AirBnB bookers may be able to shed some light into how to compete.
Compared to individuals who booked on Hilton.com and Marriott.com. Jumpshot data shows that AirBnB bookers were twice as likely to search “Google Flights” and almost 4x more likely to search for “skyscanner.” Though they do search for airlines such as “american airlines” or “united airlines” on Google, using meta search tools for flights seems to be the preferred route.
These metasearch solutions track with the the data that shows AirBnB’s expansion in listings is correlated with their growth. They prefer to compare their options from a broad set of options.
Not surprisingly, AirBnB bookers seem to be of a younger generation. They’re 3.5 times more likely to than bookers on hilton.com and marriott.com to search for “urban outfitters” and 2.5x more to search for “forever 21” over Marriott and Hilton shoppers. But is it just a question of youth?
Marriott.com bookers also seem to veer younger compared to hilton.com bookers. They’re 2x as likely to view pop music videos like by artists like G-Eazy & Halsey and Justin Timberlake. There’s still room for Marriott to grow into that audience, and they can target an audience that tends towards AirBnB bookings but is also in their market. If hotel chains are going to compete, they need to find these routes towards competitive conquesting.