JLLHotels & Hospitality I June 2022ResearchAlternativeAccommodationsLatestGlobaltrendsandoutlook thesectorThe a.temative accommodations sector has undergone a transformational shift over the past decad e. What started asa marketplace for individuals to rent out their primary or secondary homes as a means of generating extra income hasevolved into a complex, highly matrixed space akin to the traditional lodging inclustry. The sector's evolution inten sifiedduring the Covid-19 pandemic as increasing flexibility to work remotely coupled with a heightened focus on quality of lifeges in the workplace. Professi onal digital nomads, generation-Zentenng the workplace, and millennials, many in management and senior management positions,feel empowered tolive, work, stay, and play wherever they wish, albeit these spaces must comfortably accommodate all their needs. ThisCriginally designed to appeal to younger, cash-strapped leisure travelers, the altemative accommodations sector'sdemand tase has e panded significantly due to the pandemic. Now, corporate travelers, bleisure, business groups, andaffluent families onacation make up a greater share of the sector's consumer base. This has resulted in the creation of amultitude of sub-se:tors as the space matures from purely short-term rentals to the formation ofDistributionplatformsBrandedhomepropertymanagersBrandedmultifamilyalternativesMembershipprogramsSharedaccommodations Hotels & Hospitality |Alternative Accommocations Trends & Outlook | June 20Z2The following commentary offers additional details on eachof the sub-sectors and highlights major players:Short-term rentals (STR) - A shortterm rental is ty picallydefined as the rental of an entire furnished home, accessorydwelling, or room for a short period of ti me. This generall,includ es stays of less than 3O days. This sub-sector competesmost directly with traditional hotels and as such, attractscorporate and group travelers. Its margins closely align to thoseof select-service hotels as the sub-sector benefits frorn leanstaffing models given its tech-forward features. STR landlords/owners can face clifficulties navigeting regulatory and financingenvironments as local markets have diffen ng STR policies inplace, which inhibits their ability to quickly grow in 5cale, Manycompanies embrace an asset-light strategy, which can also slowdown expansion efforts. Over the past decade, the sub-sectorhas matured significantly from predominately morn-and-pop players to be more instituti onal and branded, which haschanged ownership structures and distnbution of the productAs an example, Sonder leverages master leases, where they leasepapu eq o, Buiplinq tuawede au gua ue Jo jo ed e auos Joshort-terrn rentals. In recent years, companies in this space haveaunched their own distribution platforrms, making this aspect ofthe sector more segmented.Major ployers Sonder, Casai, Mint HouseDistribution platforms - Companies in this sub-sectoract strictly as distribution interrrediaries and often featurecompanies from across all other sub-sectors within the broadleralternative accommodat ons inclustry. Distr bution platformsgrew in prominence as the sharing economy became morecommon place. The sub-sector has evolved to enable travelersto not only book accommodations but to also purchase tripexperiences and more.Major players Booking. com, Airbnb, Expedia//rboBranded home property managers - The companies inthis sub-sector have enhanced the professi onalization of thealternative accomrnodation space by focusing on managing therental, maintenance, and design of luxury vacation homes.As such, these platforms succeed in providing a more consistentand higher-end accommodations expenience to travelers.Technology is at the core of these companies' operating system5,albeit lzbor costs are higher relative to STRs. Similar to the STRsector, branded horne property managers are challenged withbuilcling scale quickly given regulatory and financing challengesand the fact that they rely on homeow ner's wilingness tohire them.Major ployers Vocasa, Avant Stay, VTrips Branded multi-housing alternatives - Companiesin this sub-sector most closely align to traditional multihousing units but feature short-term leases, furnished units, tech-enabled operation solutions and consumerinterfaces. Akin to other alternative accornmodations su b-sectors, branded rmulti-housing alternatives faceSeasons. Additionally,in Furope and Asia Pacific, serviced apartments have been around foryears and featureapartment-li ke units, housekeeping amenities, and guests stay from one to tvo years at a time.Major players = Zeus, Sentral, Edyn, Kasaexclusive club/accom modation experience, discounted hotel deals, orunlimited travel and have been aroundfor some time. Over the pandemic, these types of programs grew more popular as they offered travelersche ability to stay at multiple locztions, often global in nature, for one flat fee. In fact, Soho House, whichrecently went public and wa