Rise of the alternative accommodation

This mirrored house in Pittsburgh, USA, is a fine example of alternative accommodations on offer

 Things have changed since, with the advent of three major players in the alternate accommodation market: Airbnb,, and Homeaway (Expedia). And segmentation within the accommodations market is slowly vanishing, as the same traveller now considers both options - hotels and VR - depending on the requirements of each trip. Business travellers tend to favour hotels more, while private homes seem to become the go-to option for long stays, group and family vacations. The latter tends to be booked much more in advance, with a booking window of 15 days; whereas hotels are usually booked a bit over a week prior to check-in. As a result, we are seeing alternative accommodations turn into a commonly considered lodging choice – opening up huge growth prospects for OTAs.

Ready to cash in on this opportunity, the giants of global hotel distribution are in a race to increase their private home inventory, whereas Airbnb is welcoming selected hotels to start listing on their platform on very enticing commission terms. It will be very interesting to see how this consolidation trend evolves.

As a travel aggregator Wego works towards promptly adding new hotel openings and alternative property types. For us, it is a never-ending process of improving the ability to search for all available accommodation options (hotels, apartments, homes, and villas across all the providers) – reinforcing the key value proposition of a travel aggregator.

The need to include VR to the existing pool of traditional hotel listings is further validated, on analysis of our Middle Eastern users’ trip planning behaviour. KSA, followed by Kuwait, has always boasted the highest average number of rooms per booking; amongst the 60 markets served by Wego. So typically, a quarter of hotels searches, out of KSA, are for more than one room. Another striking finding was that the average length of stay (LOS) is one of the highest for Mena markets, and KSA takes the lead with 45 per cent of the nation’s travellers looking for accommodation for four nights and more.

 What’s more, especially in big cities like Paris, London, New York, and regional destinations such as Marrakesh, Beirut, Amman, and Istanbul – we see homes as a great addition to hotel accommodation options. This is primarily because trips to these cities are normally longer, six nights or more; and private lodging offers travellers greater cost-efficiency.

Combining all these factors - longer stays, more than one room per booking, and favourability in top urban destinations – VR appear to be the perfect alternative to traditional hotel accommodation options, especially for the young tech-savvy population in the Mena region.

Yet, metasearch platforms need to be mindful of several challenges when adding private home inventory alongside of hotel inventory:

• Homes and apartments for rent need to be properly differentiated from traditional hotel listings, in search results User Interface (UI), in order to manage guest expectations, especially when it comes to the check-in experience.

• Matching and aggregation of offers on metasearch is done by property and there usually is significant price disparity between sellers. For alternative lodging this gets a lot more problematic as apartments in the same building may appear in multiple listings, from different hosts.

• Lack of any widely adopted industry standards for categorising different types of alternative accommodations makes it a challenge to present and filter the results.

• Not all the private homes listed on VR sites are instantly bookable. This poses a problem because instant booking options for holiday homes is a clear preference for most travellers, particularly when being shown next to instantly bookable hotels.

• A lack of Arabic language support on VR merchant sites will hold back the growth of alternative accommodation, with many Mena users. Travel accommodation is a high consideration product and it would not be prudent to redirect metasearch users from an Arabic search experience to a merchant website that does not support Arabic.

The role of Wego as a travel metasearch is fairly simple – we aggregate all the available inventory supply and compare the offerings from all the relevant merchants helping user find what they need and connect them with the right merchant. Ultimately though, we believe that the end consumers will benefit from the sheer variety of accommodation options. And that the advantages, which differential supply bring, will outweigh all the challenges posed. 


* The author is director-Hotels for Wego, a leading travel aggregator