Expedia closing multifamily business shows slow demand recovery in urban areas
Following a recent announcement that Expedia Group has permanently closed its multifamily solutions business, travel industry analysts comment that the current streamlining of operations within Expedia, combined with a lack of urban demand due to COVID-19, means the company will continue to cut costs where appropriate.
The phasing out of a suite of software tools called ‘Flexible Living platform’, which acted as an urban focused multifamily solutions business, was a wise decision.
This platform was created to help landlords – particularly in metropolitan areas – to attract short-term rental bookings for empty apartments. With the financial implications created by COVID-19, it is not uncommon for large-scale travel companies to now cut back on more experimental ventures to focus on their core operations, in order to create a more sustainable business for the future.
However, Expedia’s vacation rental business Vrbo noted an uptick in bookings for May 2020. This is unsurprising – these rentals offer travelers a wider array of options in comparison to city-focused hotel companies. Rentals can be chosen across more rural areas and away from large groups of people or high traffic areas. This wide choice for travelers will be beneficial for Expedia’s severely hit balance sheet.
Would-be travelers have been confined to their homes for a number of months now, often have less disposable income due to mass job losses and furloughs across the globe, and do not want to travel internationally due to ongoing fears around COVID-19. These factors have now driven travelers towards vacation rentals in nearby rural areas, where they will benefit from a change of scenery at a relatively low price in comparison to many reputable hotel brands.