During Episode #7 of the HCH Podcast we spoke to Alex Caravitis, CEO and Co-Founder of Hosthub – a top-rated property management solution.
Alex spoke about his journey in the short-term rentals industry, the growth of HostHub, booking trends in 2023, the impact of AI, and professionalisation in the sector.
Click here to listen to the podcast, which was hosted by HCH Founder, James Varley. Below are some key excerpts from the interview, including Alex’s analysis of some data from the Hosthub platform.
Alex Caravitis: All this data comes from bookings that belong to customers using Hosthub. It's a fairly sizeable audience in the UK. This data we’re seeing comes from around 1,100-1,200 properties – so it does not represent the entirety of the market. However, when I compare this data to others in the industry, in terms of the percentages, it’s on par. So, this gives a good indication, and we use this to see the trends in our customer base.
The first slide (above) is bookings per year for the whole world, which includes tens of thousands of properties in our database. We can see 2022 was explosive.
We try to reduce the data set to properties that have been on our platform throughout the years, so they are not skewed by the growth of Hosthub. But this also includes some new properties that did not exist in 2019. You can see here the trend is that we’re going to stop just short of where 2022 reached.
Alex Caravitis: Now, if we see the same chart for the UK (above), you can see the same trend. A very strong 2022 – and 2023 is going to reach maybe 10% lower than 2022. And then if we see the percentages and distribution per channel, in a global view, Airbnb and Booking.com are fairly similar. So, in 2023, the distribution is almost 44% for Airbnb and 35% for Booking.com. The reason for this is the strong American market. So, the US don’t use Booking.com – they only use Airbnb and Vrbo, and maybe a direct website, and Expedia, and a few other channels.
While Booking.com is not strong in the US, it’s very strong in the rest of the world (below). However, the trend we’re seeing here is a very strong direct booking year in 2020. And this makes sense because in 2020 people lost all their bookings. They tried to find new ways to get bookings – and they used Instagram, Facebook, they built a website, direct marketing, email marketing, trying to squeeze every possible booking out of the year. And that’s why direct bookings grew so fast. Now, that’s shrinking a little bit and normalising at around 12%, which is on par with what we saw before COVID.
Alex Caravitis: Now, if we see the same chart for the UK (below), this is very interesting. Look at the percentage of direct bookings in 2020 – it’s the largest segment, 43% of bookings in our customer base in the UK, with the rest divided between Airbnb and Booking.com.
As the years go by, you see that Airbnb stays relatively flat – but Booking.com grows. Then we see it’s very close to what we’re seeing for the whole of Europe and very close to what we’re seeing for other European countries. The reason for that is Booking.com invested aggressively in marketing and did some promotion that Airbnb never did. For example, Booking.com were absorbing the commission for a long time. They were offering the commission – 15% – as a discount to guests, which automatically made all the properties cheaper on Booking.com. If anyone was trying to find a place to stay on Airbnb and compared it on Booking.com, they would see it was 15% cheaper on Booking.com.
The next interesting thing is the shrinking of the direct booking movement, which was so strong in 2020. Now it’s normalising but I believe it will increase in the coming years – because as the amount of bookings globally starts to flatten out and maybe drop a little bit, people will start looking at ways to increase their revenue again, which means investing in direct bookings and saving money from the commissions the channels are keeping from them.
Click here to listen to Episode #7 of the HCH Podcast with Alex Caravitis. For the very latest from the short-term rentals industry, including tips and advice for hosts and property managers, sign up for our weekly newsletter.
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