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Airbnb Threat to Hoteliers

Stop Comparing and Start Delivering Guest Value

A number of boutique hotel leaders recently gathered at a Boutique Lifestyle and Lodging Association conference to discuss how Airbnb was not a significant threat to their businesses.

The key theme was that Airbnb cannot match their services, and that “big box,” versus the boutique hoteliers, are more at risk of losing business in this new “sharing economy” model.

However, some of the panelists acknowledged the business threat.

“[Airbnb] is going to take a chunk and they are going to take a piece of the pie and be part of our lives,” said Niki Leondakis, CEO of Commune Hotels + Resorts, in this Skift article. “We have to recognize that and we have to be nimble and respond to that which I think our segment has a better ability to do.”

One of the key considerations of the discussion was that boutiques are now offering experience-focused models that cater to more affluent guests. The typical Airbnb guest is more influenced by price and geography. It is clearly cheaper to rent a one-bedroom apartment in Washington, D.C. through Airbnb, than it is to stay at The Donovan, for example.

The big takeaway was that now is the time to stop comparing the boutique hotels to Airbnb, and focus on delivering value to the guest. While many hoteliers pride themselves on their services, they should keep pushing the boundaries when it comes to pleasing guests.

By having the right analytical insights on guest preferences, boutiques can drive the concept of personalized services to a whole new level. Boutiques can stay one-step ahead of Airbnb if they make the effort to provide for the guest before, during and after their stays.

Of course, the most important audience benefits from all of this, which is the guest.

 

How to Combat the Rise of Airbnb

It is nearly impossible to open a business magazine these days and not see a glowing story about how Airbnb is shaking up the travel industry. The company is leading the new peer-to-peer services sector with more than 350,000 properties and is valued at $10 billion.

And now the company recently announced that it is offering last-minute booking in San Francisco and Los Angeles – clearly another shot across the bow at the hotel industry.

But just what does this category-shaker of a company mean for major hotel brands?

Larger hoteliers will now have to move away from being commoditized to win the war of capturing the millennials’ market and much more. Here’s how:

  • Cool Lobbies: Major hotel brands should consider making their lobbies a true social destination for millennials. This includes offering the right food, beverage, atmosphere, as well as charging stations for mobile devices.
  • End-to-End Mobile Presence: From booking to checkout, hoteliers should seek new and innovative ways for connecting with millennials in a mobile environment.
  • Appease the Anonymous Traveler: One of the benefits of Airbnb is that travelers can remain completely anonymous without interacting with the property owners. There’s a growing segment of travelers who like to remain completely under the radar, which means creating contact-less check-in where guests never need to interact with hotel staff.
  • Break Down Silos: Airbnb has a very simple offering: connecting travelers with rental properties, while offering a revenue stream for property owners. The company does not have a complex internal structure where internal silos create barriers to embracing innovation. Major hotel brands could take a page from this simplified structure, which will allow them to be more nimble and provide new innovations at the “speed of life.”

While Airbnb is not causing the sky to fall, hotel brands should consider ways to help combat the revenue losses that could come about from travelers embracing this new peer-to-peer revolution.

By remaining hip, focusing on mobility and more, it is possible to remain competitive, and create true differentiation from other hotel brands at the same time.