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Autonomous vehicles: Impact on hotels?

Earlier this month in Pittsburgh, Uber rolled out a fleet of self-driving automobiles for its ride-hailing service. Self-driving cars, also known as autonomous vehicles (AVs) and robotic cars, are capable of sensing their environments and navigating without human input. While the new technology is being rolled out, these AVs will have an engineer and a safety driver in the front seats for safety.

From a regulatory/legal standpoint, much more needs to occur before human drivers become completely obsolete. In the not too distant future, cars will increasingly resemble mobile apartments, and service stations along highways will evolve to support them, offering drivers facilities for washing, dining and shopping. Check out the Mercedes-Benz F 015 Luxury in Motion, which is an autonomous pod-like vehicle designed to function as a communal living room on wheels.

AVs have the potential to bring about sweeping and transformative changes to society. Beyond the obvious effects on car manufacturing and automobile insurance, the advent of AVs will also transform a wide variety of industries including: retail, car rental, communication, fast food, convenience stores, media/entertainment, parking, trucking, airlines, and lodging.  It is not a matter of if but when self-driving cars will disrupt the airline and hotel industries as people will have the option of sleeping in their vehicles on the road. Short-haul travel will be transformed and the hassle of getting to and from airports eliminated. Corporate travelers will be able to avoid taking domestic flights to meetings and will be able to sleep and work in their cars instead of checking into business oriented hotels. 

Although differing prognostications relative to what the emergence of AVs will bring and when they will arrive, the world continues to progress towards an autonomous future that undoubtedly will have major ramifications for real estate including lodging facilities. The technology driven sharing-economy has come on so quickly and powerfully that regulators and economists struggle to keep up with and understand its impact. One consequence is already clear in that technology platforms are disrupting the wide variety of existing industries they invade. Until only recently, the hotel sector has been too slow in aggressively and strategically reacting to the intrusion of technology platforms and the industry has thus risked losing control of its destiny.

The good news for lodging and other industries is that there appears to be at least a decade of lead time to prepare for scenarios that might be, however implausible as it may seem, a foregone conclusion at this point. Lodging platforms that are proactive in staying ahead of the curve will be well-positioned to capitalize on new technological trends such as AVs rather than be disrupted by it.

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