By Julian Castelli — Worldwide online travel sales are robust, with continued growth projected through 2019. For determined Property Management Companies (PMCs), striking while the iron is hot is imperative to take advantage of new guest opportunities. Emerging markets that could reap big profit rewards include Millenials and the mostly untapped business travel market. PMCs also need to gear their marketing strategies to a changing traveler mindset that includes mobile bookers and “Connected Travelers.”
Today’s fast-evolving vacation rental distribution landscape threatens laggard PMCs who are likely to lose owners to more dynamic PMCs who adopt new channels successfully. Many may lose owners to self-management with the growing ability to “go direct” with channels like VRBO. To combat this threat and tap into lucrative, new guest markets, LeisureLink offers PMCs the ability to provide state-of-the-art, integrated distribution programs to their property owners who cannot possibly replicate this on their own by using VRBO.
Here are some valuable insights to help management companies take advantage of new guest trends with a broader distribution strategy and optimized rate and inventory management.
For all the attention Millennials receive in the travel industry, the generation is often undersold as wanting to travel often but not being especially big spenders. While they are still working on their full income potential, there are several reasons Millennials are more than worth targeting for PMCs. First, Millennials are the only generation increasing their budget this year. According to the 2016 TripAdvisor Travel Barometer, 40 percent of Millennials will spend more on travel this year than last. While Baby Boomers still have more buying power at this point, Millennials have some noteworthy, valuable characteristics. They have a distinct preference for experiential travel, which makes them especially well suited to vacation rentals, and though they are budget conscious, they are willing to spend on aspects of travel that support this endeavor.
What to Know About Millennials:
- Three-quarters do their own travel planning.
- 50 percent prefer booking on Online Travel Sites (OTAs).
- Millennials are the most likely generation to extend a business trip into a personal vacation (62 percent did so last year).
- Many will move to alternate accommodations to make it more affordable.
PMCs have traditionally given less consideration to business travelers than the leisure or group segment ̶ until now. Business travel expenditure is anticipated to grow 3.7 percent in 2016 and with the continued blurring of the lines between business and leisure, the opportunity for PMCs to capture business travelers has availed itself. Business travelers who use Airbnb, for instance, stay longer and spend 156 percent more than those staying at hotels. Some PMCs also note that business travelers are low maintenance and gentle on the property.
What to Know About Business Travelers:
- Over 50 percent of travelers bring a family member or significant other with them.
- Of business travelers who booked their own travel, 50 percent of business travelers ages 18-24 booked via OTA, and 45 percent of travelers ages 35-54 reserved on third-party sites.
Though mobile is technically a sales avenue, it has an evolving demographic of its own and the potential to convert new guests is high among this segment. Mobile bookers are avid travelers, spanning multiple generations. 42 percent percent of travelers worldwide are what TripAdvisor calls “Connected Travelers” ̶ travelers who are twice as likely to book their accommodations on a smartphone.
What to Know About Mobile Travelers:
- Mobile travelers are frequent travelers, taking 3+ trips annually.
- 52 percent of luxury travelers are likely to book via mobile device versus the 29 percent average of other travel segments.
U.S. smartphone shoppers are three times more likely to shop for accommodations on an OTA rather than on a direct website.
For each of these travel segments, appealing to their quick pace, their desire for flexibility, and their movement across platforms during the planning and purchasing process is essential to capturing and converting their business. This requires a robust direct and third-party strategy, generous minimum stays and competitive (but not too low) pricing as well as an all-around mobile-friendly ethos.
“The best way to play these new opportunities is to be on the most cutting-edge distribution channels and partner with LeisureLink ̶ who delivers the tools to cater to the trends,” explains Julian Castelli, CEO of LeisureLink. “We offer solutions that drive bookings by providing integrated, easy-to-use access to all the key online distribution channels, so PMCs can increase revenue without increasing staff. The way many PMCs do this now ̶ managing siloed relationships with a variety of discrete online channel vendors manually or worse, with a tool designed for hotels ̶ is cumbersome and cost-prohibitive. LeisureLink offers a much better way with a more effective, more efficient approach to increase reservations, supported by industry experts, so managers can grow their business and deliver market-leading services to their property owners.”