As the travel industry approaches two full years of impact
from the COVID pandemic, data is illustrating a contrast in pricing strategy
for hotels versus short-term rentals.
The data is included in a new report, Hotel
& Vacation Rental COVID-19 Recovery, from Transparent and Amadeus that charts
hotel and rental performance in 2020 and 2021 in comparison to pre-pandemic
levels of 2019 using data from millions of properties globally.
For pricing, based on the weekly average reserved price for
a one-night stay in a global hotel and in a one-bedroom vacation rental, the
data shows that hotels tried to attract maximum occupancy by dramatically
lowering rates starting in March 2020 – down to more than 40% below 2019 rates
in April and May of that year.
Since then hotel rates have gradually been
increasing, matching 2019 levels by about August 2021, then falling back a bit
again and then exceeding 2019 levels starting in the last two months of last
year. For full year 2021, hotel rates were 11% lower than 2019, but in January
2022 rates came in about 8% higher than three years ago.
For rentals, prices hardly dropped at all – even early in
the pandemic. In fact, rental rates jumped slightly above 2019 levels in late
March and again in late May, likely due to the fact people were seeking private
accommodations that allowed them to get away as work and schools went online.
At their lowest, rental rates were about 10% lower than 2019, primarily in the
fall of 2020. Since then rental rates have steadily increased, staying above
2019 levels beginning at the end of 2020 and increasing on average through 2021
by 18%. In January 2022, rental rates were 31% higher than they were at the
same time in 2019.
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According to the report, “This trend has helped close the
gap in sector pricing, yet in the final week of 2021 an average night in a
vacation rental property cost $118, while a hotel night still averaged higher
Regarding occupancy, the data shows relative recovery was
stronger for short-term rentals, with occupancy in the last half of 2021
Notes the report: “However, it is worth considering the
impact of the greater flux in rental supply. Furthermore, traditionally higher
occupancy hotels have recovered over the course of 2021 and have actually
returned to absolute occupancy levels in excess of rentals.”
Globally, year-on-year comparing 2019 to 2021, the data
shows reservations were stronger for hotels, “as business travel persists more
through continued restrictions,” says the report. And length of stay continues
to differ, with rentals’ average stay up to five days from four in 2019, compared
to two days for hotels.
“This growth helps explain the increased occupancy and
represents a greater and persistent increase in stay duration for vacation
rentals where space and amenities are typically superior, while the length of a
hotel stay has largely remained unchanged,” says the report.
The report says the data shows that when travel restrictions
ease, traveler demand rebounds quickly.