Advertising Blitz Is Underway as Americans Are Hungry To Travel | SoFi
Airbnb in Cities
Throughout the pandemic, remote work capability has allowed people to travel to far off destinations and take advantage of longer term stays. The reality of COVID-19 and its spread within cities also depressed the number of people booking trips in urban settings.
Now, things seem to be getting back to pre-2020 levels. During this month’s Q1 earnings call, Airbnb (ABNB) explained urban destinations have rebounded, while short-term stays are on a similar upswing. The company has enjoyed higher margins amid the pandemic in comparison to its rivals, as industry observers note many customers have been organically trying out Airbnb for the first time.
Competition Heats Up
Other than the COVID-induced shutdown experienced across the entire industry, success is not a new phenomenon for Airbnb. Going back to 2019, the company’s sales grew by 80% during its first quarter. Meanwhile, Expedia Group (EXPE), who owns rival Vrbo, saw its sales shrink slightly.
Now, both Expedia and the more-traditional Bookings Holdings (BKNG) are looking to grow their market share as pandemic-related restrictions fade and the summer travel season kicks into gear. Expedia spent nearly 60% of its first-quarter revenue on marketing, while Booking Holdings took a similar approach and put 55% of its revenue going toward sales and marketing expenses.
There’s some data suggesting Americans are opting for hotels more often as the pandemic eases. Rental data provider AirDNA says bookings in urban areas are up 45% compared to this time last year. Industry observers note city visitors are more likely to choose hotels, while data from tracking firm STR backs that up in terms of current occupancy rates.
The hotel sector could also get a boost as a result of inflation. Airbnb’s prices rose 37% on average during the first quarter compared to the same period in 2019. Hotels could be a more attractive option when trying to save money. America is on the move this summer and the competition is heating up among companies that provide lodging.
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