Michael is a Research Analyst at LendEDU, a personal finance company. In his role, Michael works hands-on with polling data to tell unique stories. Some of Michael’s favorite hobbies include going to major horse races, hiking with his dog, and re-watching Game of Thrones.
Millennials are the driving force behind a slow but steady shift from conventional travel accommodations, like hotels, toward more novel spaces, like those provided by the Airbnb industry. More than ever before the trend is moving away from hotels, as a younger generation chooses to book through vacation rental services like Airbnb and VRBO.
According to a recent survey from LendEDU, which explored the opinions of millennials on travel accommodations, more than a quarter of current college students polled had experience staying in an Airbnb. Considering Airbnb launched just over a decade ago, they have already witnessed an incredible shift in perception about where people would consider staying.
Not only have a quarter of millennials stayed in an Airbnb, but 37 percent of them also have a positive opinion of the service. When asked how Airbnb compares to staying at a hotel, well over a third of respondents felt that Airbnb offered a more affordable and preferable service.
Although these statistics are gleaned from a relatively small survey, the ramifications for the hotel industry could be huge. In just over 10 years of operation, Airbnb has helped shape consumer opinion. In fact, while roughly 35 percent of the millennials surveyed are of the opinion that hotels may offer better service for a higher rate, more respondents supported Airbnb’s lower-cost services.
Why is it important what millennials think about Airbnbs?
Millennials – ages 22 to 37 – are increasingly spending money on travel, vacations, and accommodation. While the most recent statistics indicate this age group still spends less than older generations in travel every year, the statistics also say that millennials would much rather spend money on travel than on buying a home. Millennials are the generation to target as they gain full-time employment and acquire more disposable income.
Since millennials are the future of travel, their opinions matter. If new accommodation options, like Airbnb, woo more millennials, they will likely gain a more significant foothold in the market. So far, there is little evidence to support any financial hardship in the hotel industry due to the booming vacation rental industry, but this doesn’t mean there won’t be market encroachment in the future.
Comparing apples to oranges, Airbnbs vs. hotels
Airbnb offers full or partial home rentals (including apartments, condos, sheds, and other unique offerings) for short- and long-term rentals. Hotels offer a markedly different service: a standardized bedroom and bathroom. The two services are different enough that it’s hard to compare one to the other.
Airbnbs provide guests with access to full kitchens, larger living spaces, and a unique experience. Often, these rentals come at a much cheaper cost than similar services provided by the hotel industry. Perhaps because of the price and experience, millennials favor Airbnbs over hotels. This age group still recognizes, at least to some extent, that hotels offer more services for an added cost, yet more millennials prefer accommodation with a vacation rental company.
Airbnbs are not pushing hotels out of the market yet because they are not competing directly with the standard hotel room. Without the more affordable accommodation, perhaps millennials wouldn’t have traveled at all. The twenty- and thirty-something crowd might be more open to the more economical Airbnb option but they still recognize the services of the hotel industry.
What does the future hold for millennials and Airbnb
Given it’s only been 10 years since Airbnb started hosting its first guests, they have come a long way in convincing millennials they are the more affordable and preferred option for accommodation. In only a decade, more than 40 percent of college students choose Airbnb when given a choice, and more than a quarter have already experienced the service.
As more millennials enter the job market, earning a disposable income, it looks likely they’ll be spending it on travel. It’s yet to be seen if the current trends in the tourist industry will continue as millennials age and earn higher wages – and if hotels will keep the market share.