How the ‘collective’ is boosting alternative accommodation in Asia

Powered by a collective rather than individual perspective, the shift away from hotels to alternative accommodations in Asia is well underway, writes Daniel Rouquette, Managing Director, Villa Finder

Consumers today are spoilt for choice. And, when it comes to travel, at any one time there is a customer out there on a mobile phone, browsing through a list of travel or accommodation services for an upcoming holiday, researching competitor brands and looking for a minimum of two options to choose from.

That is nothing new, but what definitely has changed is how customers expect to have their needs met in a more personalised and engaging way. In this respect, traditional accommodation providers in the hotel industry are still playing catch up in terms of understanding a customer’s preferences, staying relevant and personalising their marketing messages until checkout is completed. Alternative accommodations like vacation rentals are filling and taking advantage of this gap.

In markets like Asia, travellers and investors alike have embraced the concept of vactional rentals. This is thanks, in part at least, to new disruptive platforms, technology and the sharing economy bringing drastic changes to the global travel market. However, it is also driven by the fact that in Asia, the concept of the collective overpowering the individual. Therefore, it comes with no surprise that 279 million travellers preferred alternative to mainstream accommodation, according to TCI Research and the Pacific Asia Travel Association (PATA). Renting a property with more than one room or suite allows for family or group travel, an option that resonates with the culture and tradition of Asian travellers.

A nuanced approach

Brands like US-based HomeAway understand this distinction. To increase its footprint in Asia, it has acquired Singapore-based vacation rental marketplace, Travelmob, which made its listings available in local languages, via local payment systems with local support facilities. HomeAway’s properties are also skewed towards entire properties making it more attractive to the average Asian customer.

The shift to localise and personalise vacation rental services is also recognised by private investors who are building properties to meet and leverage growing demand in Asia. New villas are being erected purely for rental purposes, and investors are ensuring that properties suit the preferences of the Asian customer. In 2015, Villa Finder added100 villas in Bali, and a further 200 in 2016, while turning down just as many! Just for the record, 88% of these properties were built by private investors. A similar trend is being observed in Sri Lanka where there has been a recent surge in the number of private properties. By the end of 2019, Villa Finder expects to have onboarded a total of 2,000 villas across the Asia Pacific into their directory.

Asian customers are used to a minimum degree of interaction before completing a booking

With increased competition from vacation rentals and shifting customer demands, many traditional hotels and resorts are trying to stay ahead of the game. They are adding more services and leveraging technology to offer guests a more personalised and authentic experience. However, for customers who want a high degree of interaction with the host, we believe that the hotel stay is still missing the mark. This is especially true for Asian customers who are used to a minimum degree of interaction before completing a booking. For example, for Chinese travelers, accessiblity is paramount; apps like WeChat facilitate constant communication with the seller before a final decision is made. For this reason, the Chinese customer expects to book their travel accommodation in a similar way.

Vacation rental companies in Asia go as far as providing concierge services as an added benefit when guests book a holiday property, giving customers reassurance that expert local help is available if needed. These added features make up what can be termed as affordable luxury services, and for Asian consumers, are elements that sway their decision between staying in a hotel room or a fully-serviced villa.

The Asia vacation rental market has a positive outlook for both consumers and investors. According to Statista, the market is expected to be worth $16,8 million in 2019, a year-on-year rise of over 9.1% and have a market volume of $23,2 million by 2023. In our view, the vacation rentals space is one that has and will continue to successfully marry personalisation and quality for an experience that is relevant and abreast with today’s Asian traveller.

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