Can Online Rental Marketplaces Upend Student Travel?

Shared space rentals – the renting of a room or space in a private home – has garnered enormous attentionover the past several years with the rise of Airbnb and other startups entering the fray. But this type of accommodation is actually not so new at all. Students of high school or secondary school age and university seeking to learn a new language or study abroad have long sought out accommodation with local host families. The traveler's objective is straightforward: cultural and language immersion.

The student homestay market globally is both large and very fragmented. The 2012 report – Youth and Student Travel Market, Industry Review No. 3: Product Development – from WYSE Travel Confederation projected the total worldwide student travel opportunity in 2011 at 196 million arrivals and US$173 billion in value. That same study says host family stays are the most popular form of accommodation overall, and especially so with students on study abroad language programs.

The accommodation for study abroad programs may be organized in a number of ways. Many programs organize the accommodation on behalf of their students, either directly or through the use of homestay networks that cater to the student market. The rapid rise of online private accommodation marketplaces, however, is poised to disrupt long-standing practices for organizing student travel homestays.

TWO WAYS ONLINE MARKETPLACES CAN CHANGE STUDENT STAYS

1. Transparency. Within the education segment, homestay placement has largely been opaque to both guests (the students, and by extension, their parents) and the hosts. Most homestay organizations or educational programs that handle their own accommodation do not provide transparent, online marketplaces where students can browse possible accommodations and interact with potential host families in advance. There are no online reviews from other students or aggregate review scores. Likewise, the host families have limited choice in terms of who will be staying with them – often for extended stays of several weeks or months.
   
   By comparison, online marketplaces have made photography, property and room descriptions, numerous guest reviews and the ability to interact prior to booking central to the trip-planning process. These features have now become widely expected by travelers (and, presumably, the parents of student travelers), the vast majority of whom shop for accommodation and plan their trips online.
   
   
2. Liquidity. Traditional homestay networks are generally smaller and less liquid. They have a smaller pool of hosts and more constraints around demand. Organizations that serve schools will be tied to the calendars of educational institutions and only be able to place guests in homes around the school schedule. Typically, the homestay networks set the rates they pay host families, as well as the arrival and departure times, lengths of stay and which students will stay with which hosts.
   
   Families that have used homestay organizations to host international students and earn a little extra income may find that listing their home on an online marketplace will be more lucrative and offer greater flexibility. Online marketplaces allow the hosts to set their own rates and calendars, and usually provide them with some means of interacting with potential guests prior to accepting a booking.

HIGHER ED MEANS HIGHER STANDARDS

However, the complete supplanting of the traditional homestay placement process will not be easy. There are some significant elements that online accommodation marketplaces may not be able to address without significant adjustments to their own models:

• Vetting of hosts. While rental websites may require little more than some form of ID verification, educational placement services are often responsible for youth travelers under 18, so they typically take additional steps to ensure that the environment is safe and suitable for students. This may include home inspections, host interviews and criminal background checks, not to mention increased liability.
  
  
• Less appealing locations. Educational homestays are often located in secondary or tertiary locations that are not as interesting to travelers. They are more likely to be in neighborhoods convenient to schools and universities, but with little to offer tourists. Online marketplaces may not be able to provide adequate demand into those accommodations unless they specifically target the student travel marketplace and the needs of student travelers. This could allow space for smaller organizations focused on the educational homestay to continue serving those markets.
  
  
• Host motivations. For many hosts, but especially those serving the student homestay market, the income from hosting the students is not the primary motivation for hosting. In many cases, they want to meet people from other countries and learn about other cultures. They may have children who they want to expose to people from other cultures.

Today's travelers expect more transparency in the accommodation selection process and want to have more say in where – and with whom – they may be staying. If homestay networks that have traditionally served the student travel market do not adapt to offer some of the new standards of online accommodation marketplaces, they may find themselves increasingly competing with the likes of rental websites to win over students and their parents. And perhaps more importantly, they will also find themselves increasingly competing with the more transparent and flexible online marketplaces for hosts and inventory.

For more information about the rise of shared space accommodation and its impact on the global travel, tourism and hospitality industry, read Phocuswright's new study The Global State of Shared Space, available for free download.