Pillow Talk is where Abode Worldwide’s founder and CEO, Jessica Gillingham shares musings, learnings and insight about the pioneering lodging technology brands and operators transforming the way we work, rest and play. To receive Pillow Talk directly to your inbox, you can subscribe here.
Trends and predictions. It’s that time of year. Of course, no one has a crystal ball; anything can happen over the next 12 months, but it’s already becoming clear what the big themes will be in the short-term rental, lodging and hospitality sectors next year.
These include further tech consolidation, increased mergers and acquisitions across solutions and operators, and a greater focus on retaining customers. We’re also set to see more significant inroads into the long tail of smaller hosts that tech companies are now keener than ever to onboard. Plus new markets will continue to blur the lines across multifamily, STR, and hotels.
But what else should we be thinking about for next year? What are the macro trends on the horizon that are worth watching? Here are some themes that pique my interest and may impact our lodging sectors in one way or another over the next 12 months and beyond.
Subscription Living
Subscription Living is a term I heard recently at a real estate investment conference. It describes the shift in our attitudes and preferences away from ‘owning’ products, services, and experiences towards renting them, maintaining a sense of ownership for a short time and with no commitment.
Fueling this growth is a change in consumer persona towards fast, convenient, socially conscious, experientially driven, tech literate, brand savvy, highly transient, and easily bored individuals.
We already see subscription living with Netflix, Spotify, Airbnb, car shares, electronics, and meal delivery, but what can this all mean for lodging, renting and hospitality?
It means a huge opportunity to innovate, capture the market, respond to customer demand and produce new products and services.
Loyalty programs, digital community tribes, experience-focused stays/homes, brand advocates, flexible living, ‘alternative’ rental spaces, subscription purchasing – we’ve already seen these things come to light. The ‘Subscription Living’ model will further impact hospitality and lodging as Gen Z (and their influence on the rest of us) continue to come of age.
It’s all about The Apartment
This last month, it’s all been about The Apartment, and I’m not talking about the excellent 1960’s movie here. Airbnb launched Airbnb-friendly apartments, its initiative to help renters host on the platform part-time.
The platform currently has a list of 175 apartment buildings in more than 25 destinations across the U.S., and Airbnb said that residents hosted on average nine nights per month, earning an average of $900 per month. A good option for residents when going through a cost-of-living crisis. Not a new idea. Several companies have been looking at facilitating this flexibility but, with this initiative, Airbnb is normalizing the ‘Airbnb’ within apartment and multifamily residences. More of this will come.
Continuing with the apartment theme, Marriott just launched Apartments by Marriot Bonvoy. The new brand will bring apartment-style accommodation to the U.S. and Canada. “The company is seizing upon growing consumer interest among families and friends seeking more space for stays, propelled by the blending of work and leisure travel, and the desire among younger travelers for wider accommodation options,” said the official press release.
There is plenty of room for both but, as more hotels move into the ‘home-like’ lodging space, it will be harder for traditional operators to compete with the brand name, loyalty programs, and known experience of the hotel brands.
Impact of rising energy costs
Booking.com’s European Accommodation Barometer 2022 shows that hoteliers across Europe view rising energy costs as their biggest challenge. Eighty percent stated that this is what was keeping them up at night. A big jump from the following three biggest challenges — the broader economic situation received 48%, followed by staff acquisition and retention (43%) and staff cost at 42%. It also marks a change away from the talent crisis and labor shortage.
ChatGPT and Digital Twins
LinkedIn is a flurry of posts about ChatGPT right now. It’s big news and is likely to impact all aspects of business. Like everyone, I’ve played around with it. For help writing this newsletter, I asked, “What are the anticipated trends for short-term rentals in 2023?’. The response was, “I am a large language model trained by OpenAI, and my knowledge is limited to what I was trained on, which has a cutoff date of 2021. I can provide general information on trends and developments in the short-term rental industry, but I cannot provide specific information on trends in 2023.” I then asked and received some general STR trends, which were correct but generic.
As an advisor of mine said recently, “Just because we can do something doesn’t mean we should.” It’s a depressing thought that if we all go down the AI route, we will live in a world of even further mediocrity of content and ideas. On the plus side, however, those businesses and leaders that provide insight, critical thinking, and new thoughts will be valued more.
I was at the International Hospitality Media trends event last week, and Eloise Hanson, the editor of Boutique Hotel News, talked about ‘Digital Twins‘ and the potential impact of the Metaverse on real estate and hospitality. A digital twin is a virtual model that accurately reflects a physical object. If you think beyond the marketing gimmicks, the potential impact on lodging could be significant from a building point of view. Building something digitally to test sustainability, user experience, and performance is enormous.
Trends articles for the new year are coming to us thick and fast. If you’re interested in learning more, here are two recommendations. Marcus Rader, CEO of Hostaway, revisited his predictions for 2022 and cross-referenced them with what happened. ShortTermRentalz is releasing its annual trends article tomorrow alongside the trends webinar.
I hope you enjoy these musings. Please pass it on if you have a friend or colleague interested in receiving them.
Best,
Jessica
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About me – Jessica Gillingham is the CEO and founder of Abode Worldwide, a public relations and content agency focused on raising the profile of technology solutions and operators, transforming the global short term rental, hotel, multifamily and ‘living’ lodging sectors.