The presentation of 1st quarter results by two distribution giants, Airbnb and Booking, reveals a growing trend. Whatever the context, the number of overnight stays booked in “alternative” accommodation is rising steadily.
Brian Chesky, despite a drop in the profitability of his operations, welcomed a further surge in bookings in Q1, despite the uncertain climate. “No matter what happens in the world, people will continue to choose Airbnb, because of the inherent flexibility of the model,” he told financial analysts. “The world seems uncertain again, but as we’ve proven in the past, Airbnb will be able to adapt.”
While the U.S. market is in retreat due to Trumpian politics, the ever-increasing number of vacation rental enthusiasts are turning to other fashionable destinations – Mexico, Brazil, France, Japan – but certainly not giving up on travel.
Sales for the 1st quarter exceeded $2.3 billion (up 6% on the same period in 2024), for a global booking volume of $24.5 billion (up 7%), and 143.1 million overnight stays (up 8%). To support the booking flow, Airbnb has spent $563m (+9.5%) on digital marketing and other channels.
Booking turns up the heat on vacation rentals
The volumes recorded in a single quarter and the financial clout available further explain the race to the top by “classic” hotel groups, who are finding it hard to compete in the battle of the giants.
The other giant in hotel distribution, Booking Holdings (Booking, Priceline, Kayak, Open Table, etc.), also announced an increase in its Q1 results: 319 million room nights booked (+7%), a figure never before achieved, which represents a total booking volume of $46.7 billion (+7%), i.e. $4.8 billion in commissions received and a quarterly gross margin of $1.1 billion, which the Accor group has only managed to achieve over a full year.
What is notable in the results presented by Glen Fogel, CEO of Booking Holdings, is the growing share of bookings for “alternative accommodations”. In Q1 2024, the growth in bookings of short-term rental apartments jumped by almost 20%, and the curve has flattened in Q1 2025, but growth is still in double figures.
“Dry” accommodation vs. the ”hotel experience”
It’s becoming increasingly clear that some of the clientele of the classic hotel industry, particularly budget hotels, are escaping to seasonal rentals, which have never been so easy to distribute. For travellers looking for a place to stay and organizing their own activities, vacation rentals offer flexibility and affordable rates. The decline in budget hotel business can be partly explained by this, in addition to the drop in economic activity and construction sites.
Hotel guests are increasingly looking for an experience in an establishment that offers increasingly complete, diversified and complementary services, with a level of service that justifies the higher prices in the name of the “experience” on offer.
This is a phenomenon to watch out for, unless local government regulations put the brakes on the spread of seasonal rentals.
