For travelers, investors, and online marketplaces, the lines are blurring that divide extended stay hotels, apartment hotels (apartotels), condo hotels (condotels), corporate housing, serviced apartments, vacation rentals, and short-term rentals.
At today’s Serviced Apartment Summit in New York, executives from the serviced apartment and extended stay industries discussed their expanding and overlapping verticals with attendees from the vacation rental and corporate housing sectors.
Currently, the verticals are largely differentiated by location (metro vs. beach/mountain/lake) and reason for travel (business vs leisure).
According to Piers Brown, CEO of International Hospitality Media and founder of Serviced Apartment News, “Both [serviced apartments and vacation rentals] have leisure guests. Serviced apartments attract those looking for an urban experience and have a corporate guest to target (versus hotels), which is less prevalent in vacation rentals or holiday lets.”
While additional contrasts exist between the models (including zoning, on-site staff, hotel-like amenities, private outdoor spaces, and in-unit laundry), investors and accommodations platforms that serve non-hotel lodging options are quickly recognizing that the similarities in the booking path outweigh the differences for leisure, business, and medical travelers looking for lodging alternatives that offer more space than a hotel.
OBASA CEO, Gordon Doell, recognized convergence early in the company’s growth cycle, saying, “We started off in single-family residences and got involved in corporate housing as a mistake.”
Doell continued, “Our goal is to create healthy living environments where travelers can wake up and start their day as they would at home. We can help in that way and help them save some money.”
Two factors that are speeding up the convergence of these industries are the consolidation of online marketplace platforms and the new funding flowing into the sectors with the goal of “owning” the inventory. According to Larry Korman, president of AKA Hotel Residences, AKA is currently working with Airbnb on the new Airbnb Plus initiative designed to provide more standardized alternative lodging options to its guests and is investing heavily in the product.
In addition, the vacation rental and serviced apartment industries are both rapidly coming to the conclusion that inventory control is becoming more of a necessity in catering to guest expectations and providing a consistent experience. “People who own the inventory have the power,” said Jon Wohlfert, co-CEO, RESIDE Worldwide. “If you control the experience, then you can differentiate the product.”
As the industries continue to explore the opportunities and synergies that exist within the expanding vertical, the non-hotel accommodations sector appears to be consolidating and professionalizing rapidly.