house in the desert

Travelers Seek Alternatives to Hotels

Airbnb, Vrbo Poised to Benefit

Airbnb (ABNB) and Vrbo (EXPE) are expected to be big beneficiaries of a travel rebound driven by COVID-19 vaccinations and easing pandemic restrictions.

Though some patterns of pre-pandemic life are beginning to return, people are still choosing to travel to destinations closer to home, and are opting for more rural vacation spots. As a result, they are booking lodging through Airbnb and Vrbo more than they are booking hotel rooms.

The number of weekly active users on Airbnb’s app is up quarter-over-quarter and online searches for Vrbo have been exceeding 2019 levels since January. That trend in accommodation preferences is expected to continue through 2021, positioning both Airbnb and Vrbo for more growth. Won’t Get Left Behind (BKNG), which does business booking hotel rooms for travelers, does not want to be left out of the shift to alternative accommodations in the US. The company offers a large selection of alternative accommodations in Europe and plans to increase its offerings in the US.’s platform lets travelers book accommodations without a back and forth between the host and guest. The company thinks this feature gives it an edge over Airbnb.

Vrbo’s parent company, Expedia, is also working to take advantage of shifting consumer preferences. Reportedly, the company has recruited some of Airbnb’s hosts for Vrbo. That move prompted one Wall Street firm to raise Expedia’s 2021 revenue growth estimates for 2021 and 2022.

Regulations Pose Risks

Airbnb, Vrbo, and other rivals are preparing for an increase in travel. Industry watchers expect the increase will mainly be confined to domestic travel for the time being. When international travel picks up again, Airbnb will benefit given its inventory in cities around the globe.

The biggest challenge for Airbnb and Vrbo in the near future could be regulations. These companies could struggle if cities limit or regulate them to help the hotel industry.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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