Since it’s inception in a San Francisco loft apartment in 2008, Airbnb has come a long way. As the largest peer-to-peer hospitality service, it’s certainly not going anywhere any time soon. Quirky studios, townhouses, beach villas, house boats, castles, you name it– there’s a homely environment to accommodate every requirement, from solo travel to large-scale team-building trips. The real question is, what does Airbnb mean for hoteliers?
So far, Airbnb is yet to tap into the high-end hotel landscape: Offering affordable holiday rentals to low budget customers. It doesn’t yet operate in the same space. But, this isn’t to say all hotels are safe from the clutches of AirbnB, with mid-range to budget hotels facing iminent losses. With the average hotel room offering consumers a bed, bathroom and storage in varying levels of comfort, an Airbnb apartment provides the same luxuries plus kitchen and larger, more comfortable living spaces. For families or groups in particular, an apartment can seem far more practical and appealing.
Trends are also showing that an increasing number of Airbnb bookings are being made among corporate clients. Not surprisingly, after they rolled out streamlined ways to record receipts and reservations through a widely used corporate software for filing expenses. Then there’s also the convenience aspect, listings in virtually every country and any street, stocked kitchens, private parking spaces… By paving the way for business customers, the brand is signalling a desire to eat a bigger slice of the market share.
So, what does a hotel chain do to respond to the threat of Airbnb’s sharing economy?
Importantly, it’s not about criticizing the “rival” business model. Established brands should not attempt to pick holes in the Airbnb proposition – it leaves them looking dangerously out of touch with the changing marketplace. We need to accept Airbnb has a place in hospitality, but there will always be room for traditional hotels. What is is that hotels offer that Airbnb can’t? In my eyes, it’s service, trust and safety. Hotels are highly regulated organizations – we manage expectations, we control consumables, we employ security and we monitor risks. If someone breaks into an AirbnB property, there’s no protocol.
The key is to promote the virtues of our own business models while still considering how best to evolve with the trend of sharing economy brands. Take Marriott, they’ve launched Workspace on Demand, offering on-the-go locations for the younger workforce who need places to meet and work on a flexible basis. They have acknowledged that next-generation professionals are looking for non-traditional environments, attracting a new segment for the hotel, while capitalising on previously untapped opportunity for revenue in empty spaces. Above all, the renting of space is at the core of the existing business model – meaning this effort of this new business avenue is minimal compared to the gains.
As we close in on our learnings from Airbnb, there’s no doubt they’ll be watching our every move. We have all seen the way that Uber have blind-sided traditional taxis – we just need to make sure we keep our eyes open.