For Millennial Travelers, Does Airbnb Beat Hotels?
Airbnb has cut into the hospitality marketplace in a major way. But Millennials are more split on their preferences than one might expect of the "Uber generation."
Millennials are 23 percent more likely to travel than their older demographic counterparts, and they’ll spend an estimated 1.4 trillion per year by 2020 — but when it comes to booking their vacations, has Airbnb supplanted traditional hotel accommodations for the Uber generation?
According to new research from LendEDU, the jury is still out: 37 percent of Millennial say Airbnb is a “cheaper, preferred option,” but another 35 percent say the benefits of a hotel are worth the added cost — meaning that Millennials are effectively split when it comes to their preferences.
Additionally, 26 percent have stayed in an Airbnb before, and LendEDU’s research found they had mostly positive things to say — but a separate faction said that Airbnb still “feels sketchy and not as accommodating” (27 percent). So, what does this mean for hotels and for Airbnb?
Know Your Audience
Well, the fact that nearly 40 percent of Millennials say they prefer Airbnb is good news for the (relatively) young upstart — and for the online hospitality marketplace in general. As for the customers who are put off, it’s likely that one of Airbnb’s primary objectives will be to continue its marketing efforts so as to tell brand stories from consumers who had positive experiences.
Airbnb has undeniably taken a bite out of a hospitality market that remained largely unchanged for decades. But there’s good news for hotels in these stats, too: As stated, over one-third of Millennial customers (35 percent) still say they actively prefer hotels, even if it means paying more for an upgraded experience.
As such, the report suggests that — rather than needing to convert the entirety of Airbnb customers to hotels, or vice versa — there is a solid market within the Millennial demographic for different types of experiences.
Traditional hotels must first know their target consumer: Is it older Millennials who have more disposable income, and can they offer them luxury upgrades and services that Airbnb by its very nature can’t provide? Is it consumers on-the-go looking for a last minute deal, who could perhaps be won over by relevant, geo-targeted messages at the right moment? Or perhaps its both, depending on their past stays and search history. But understanding this starts with research about what strengths play to which audience — and then targeting that audience accordingly across devices.