The war is over and Airbnb has won
08 JUNE 2015 6:30 AM
The sharing economy has a permanent place in the accommodations industry, and hoteliers need to learn how to coexist with this new reality.
When it comes to the sharing economy, and Airbnb in particular, a lot of hoteliers have their heads in the sand. Disruption is a fact of life for many industries, and the hotel business is no exception. To put it another way: The war is over, and Airbnb has won.
That’s a harsh statement, but it is one hotel executives—including owners, GMs, marketing directors and chain officials—need to understand if they hope to coexist with the new realities of the accommodations marketplace. While the sharing economy has won the hearts, minds and wallets of many travelers, young and old, it doesn’t mean the end for the hotel industry.
In order to fight back, however, hotel owners and operators need to understand how Airbnb and others have so quickly become a major force in the consumer economy:
1. The millennial mindset
Hoteliers must realize Airbnb (which I’m using here as proxy for all accommodations sharing sites) is selling a different product than are hoteliers, and a growing segment of the population—namely millennials and Gen Xers—consider it to be a superior product.
Much has been written about millennial travelers and their wants, needs and expectations, so it should be no surprise this cohort wants accommodations that are unique, cheap, hassle-free and not what their parents use.
2. A product with old-fashioned hospitality
While millennials are most closely associated with the sharing-economy lifestyle, they’re not the only consumers who believe Airbnb might be a superior product in certain circumstances. You can count me among this group.
My wife and I recently took our friends’ 17-year-old daughter to New York City as her high-school graduation gift. Normally, we would stay in a hotel, but we needed two bedrooms, a requirement which would have cost as much as $500 a night at even a modest midscale property. Instead, on Airbnb we found a great condo unit on the 55thth floor of a Midtown building overlooking the East River for about $600 for the weekend.
What separated this arrangement from a hotel stay—and which is the true essence of what Airbnb is about—is the two-way personal relationship it provided between us as guests and the condo owner as host. She called us several times before arrival to see if we had any questions. She also contacted us during our weekend, again to see if she could do anything for us. And she called about an hour after we left to ask about our stay.
And while it wasn’t included in the listing for the apartment, the host left breakfast food and other snacks for us to enjoy.
Sure, some hotels offer this kind of personalized service, but you can’t get it for $600 for two nights for three people in New York City. As a result, I’ve become a fan of Airbnb—not for every trip or stay, but it in situations like I described it’s a solution that clearly is the best way to go.
3. Masterful public and government relations
Airbnb’s brilliance in communicating its message to the public and to government officials can’t be overlooked in discussing its success to date. Correctly or not, it has portrayed itself as a fighter for the rights of the little guy, guest and host alike, that pumps billions of dollars into local economies while affording the gift of travel to thousands of people. It all sounds very heart-warming, and it is very effective.
At least in part because of the positive press generated by the sharing economy, hoteliers in many communities have had difficulty passing legislation restricting these services and/or enforcing existing legislation that could crimp their activities.
That’s beginning to change as more tales are told of so-called “kingpin” hosts who gobble up apartments and houses and become de facto hotel moguls. Also news of sordid activities by some Airbnb guests further sours the kumbaya spirit the Airbnb PR machine is generating.
And while neither Airbnb nor its hosts should be allowed a free pass on issues such as taxation and safety and security, we must all realize the sharing economy is here to stay and, at least for some consumers, it has supplanted the hotel industry as the place to stay on the road.
Ed Watkins, former editor-at-large for HNN, is a freelance writer with 40 years’ experience covering the business of the hotel industry.
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