Understanding how your local rental market is performing around you is a fundamental part of a successful destination marketing strategy. This kind of benchmarking can reveal if properties in your area are underperforming and give you the chance to adjust your marketing strategy to attract more visitors to your destination.
But benchmarking against vacation rental companies alone doesn’t give DMOs the full picture — it’s easy to forget how data from other areas of the hospitality industry can help maximize revenues too.
Data Across The Hospitality Market
Very few people are loyal to just one category of hospitality, be it serviced apartments, vacation rentals, guesthouses, resorts or hotels. Guided by the purpose of their trip, they will compare prices, amenities, service levels, and locations each time they book.
The way guests move between these different types of operators means that, while benchmarking against local competing destinations in the short term rental sector is incredibly valuable, the more types of accommodations tracked, the more complete the picture. After all, short term rentals still only represent a minority of accommodation options globally — vacation rentals were expected to account for 23% of the US market in 2020.
Adding hotel market data, like that offered through our partnership with travel data provider Amadeus, provides more accurate insights into overall demand and emerging travel trends. By monitoring short term rental and hotel performance, destination marketers can have a more complete picture of demand and performance. So, they can adjust their strategy and target their marketing spend with purpose.
The value of combining hotel and short term rental data lies in the correlation that exists between the two. While booking windows for hotels and vacation rentals will differ — and the pace of bookings will vary — occupancy rates tend to reach a similar level at both hotels and short term rentals roughly two to three weeks before the stay date.
Take Account of Lag
However, the relationship between vacation rental and hotel bookings will vary. Short term rentals will usually start getting booked up sooner than hotels but this isn’t always the case. In some destinations, it’s the other way around. This is why it’s important to understand the relationship between the two in your own market, so you can spot when this correlation breaks down, which is where our DestinationData dashboard comes in.
In markets where short term rental bookings lag hotel bookings, it will be possible to get a head start in adjusting your strategy to meet any slowdown in occupancy or ADR.
This is just one example of how using hotel market data analytics in addition to short term rental data can lead you to make strategic decisions different from those based on short term rental market data alone.
Changing Travel Trends
Hotel market data can also help identify the bigger trends that may emerge over longer periods of time. For example, if demand for hotels increases, it may provide a clue that the demographic of visitors to a destination has shifted or, perhaps, the proportion of guests traveling for business has increased. That could be the result of a campaign by the local Destination Marketing Organization or municipal government, or maybe fewer international tourists want to visit because fluctuating exchange rates have made it more expensive.
Whatever the reason, this change in trend may first be reflected in changes within the hotel market. However, if you only looked at how other short term rentals in the same area were performing, a new trend could easily be missed.
In the case of increased business travel, for example, the property manager could respond by simply reducing the minimum length of stay to support demand from guests looking for shorter stays — they may even be able to raise average daily rates (ADR) too.
- Benchmarking rental performance against hotel price data can lead to better insights and help property managers react to emerging trends early
- Don’t assume that the relative performance of short term rentals vs hotels remains the same throughout the booking window
- Understand the correlation in your specific area so that you can measure underperformance and react at the earliest opportunity
Ready to learn more about using hotel data powered by Amadeus Hospitality to benchmark the performance of your destination? Book a demo in with one of our team members.