What’s alternative is becoming the new normal
 
What’s alternative is becoming the new normal
05 FEBRUARY 2016 7:16 AM
Alternative-accommodations companies aren’t going away—they’re becoming more popular—so hoteliers should get ready.
The data discussed in a recent Phocuswright webinar on the sharing economy’s impact on travel should come as no surprise to anyone: It’s becoming more mainstream, and not just with millennials.
 
The percentage of U.S. travelers who stayed in a private accommodation on a leisure trip rose from 1 in 10 in 2011 to 1 in 4 by 2014, according to Douglas Quinby, VP of research for Phocuswright. He also said one of the fastest growing age groups for the rental marketplace isn’t millennials, but travelers age 35 to 44. 
 
“There’s been a huge jump the last couple of years,” he said. “There’s some pretty significant growth, not just among millennials, but across older travelers as well. HomeAway and Airbnb—the millennial brand is becoming more mainstream.”
 
It makes a lot of sense when you think about it. The alternative accommodation companies have been around for a number of years now. As should be obvious from the terminology, they provide an alternative to the hotels and motels travelers have traditionally used, potentially offering lower prices, a more organically local experience or, for some, just something different.
 
Without any major scandals or horror stories gone viral, the companies have gained credibility with the demographic groups that were likely wary of them when they started. The initial ick factor of staying in somebody else’s home has ebbed away to perhaps being an exciting adventure or at least a cheaper place to stay in an otherwise expensive area. 
 
Now, alternative accommodations, which come in many different forms, are by no means perfect. There are safety, tax and other regulatory issues to work through that would help level the playing field some and better protect guests staying at hosts’ houses or apartments, but that’s not my point here.
 
Even if there are insurance requirements, safety standards and comparable tax rates established for companies like Airbnb and HomeAway, they will continue to exist, in some form or another, and they’ll probably do pretty well for the reasons I mentioned before. 
 
There are studies, analyses and reports coming out on a regular basis trying to determine whether alternative accommodations are true competitors of hotels and, if so, whether they are hurting hotels. Some hotel company CEOs say they aren’t concerned, that they aren’t competing for the same guests, while others are exploring options similar to the sharing economy. 
 
So what does that mean for the hotel industry? If I could predict the future, I’d have hoteliers, along with everyone else, lined up around the block waiting to talk to me. Instead, let’s try working through it this way.
 
There’s always going to be another company doing something a bit different, changing things up for the hotel industry. In all likelihood, the best approach to these will simply be to be flexible. Sure, that’s easier said than done, but what other approach is going to work better?
 
Be flexible. If it’s not Airbnb, it’s going to be somebody else. See what is working for them, what’s drawing guests to them. Can you do something similar, something better? Can you work with them rather than against them? Can you become a disruptor yourself?
 
There are a lot of options out there for hoteliers, some probably not even thought of yet. That’s OK. There’s time for trial and error because alternative accommodations aren’t going anywhere.
 
Email Bryan Wroten or find him on Twitter.
 
The opinions expressed in this blog do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact and editor with any questions or concerns.
 

6 Comments

  • KL February 8, 2016 5:14 AM

    AirBnB can just be a better, cheaper product. Why spend $300/night for a small room and property amenities I won't use (gym, business center, giant and overpriced buffet breakfasts when I only eat a banana and coffee for breakfast), when I can pay half that and get exactly what I need, plus double the space? Loyalty programs won't get me to spend upwards of $100+ per night, so hotels need to figure out how to offer things AirBnB can't offer, at reasonable prices, or free.

  • LB February 8, 2016 6:01 AM

    Mr. Wroten's airy dismissal of horror stories and regulatory battles being fought is from a fanciful world. The millions being spent by Airbnb to fight regulations particularly in big cities like New York suggests that the "alternative" accommodations industry's eventual profile is going to be quite different to that projected in sky high valuations by the PE folks. Sorry, Bryan but hotels cannot compete with Airbnb dollar for dollar when taxes from RE to mortgage to regulations on handicapped access and fire-safety disproportionately favour Airbnb. Please get your head out of the sand

  • Fred G February 8, 2016 7:51 AM

    Any news organization that carries this story is negligent. It references a Phocuswright study and adds layers of the reporter's biased opinions to sway the reader to an incorrect conclusion of acceptability. Yes a traveler, can be swayed by lower pricing. That lower pricing is caused by the sharing economy's non payment of taxes, proper cleaning, fire/life safety and many other reasons. These accommodations are sometimes in sketchy areas and in others cases outright illegal (see DA Schneidermans report in NY). In the article Mr. Wroten says " I’d have hoteliers, along with everyone else, lined up around the block waiting to talk to me." What he doesn't say is there would be no one on that line.

  • jeffhigley11 February 8, 2016 8:05 AM

    Fred G, thanks for posting and adding to the conversation. To put this into context, the blog is designed to carry Bryan's opinion because it is a column rather than a news story. We realize we can do a better job labeling content as opinion, so our redesigned site that is due to go live soon will better differentiate opinion-based columns from news articles.--Jeff Higley, Hotel News Now

  • SV February 8, 2016 11:12 AM

    Why has the ACLU not taken action against Airbnb? I imagine a majority of homes are not inhabitable by ADA guests.

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