Seven trending stories on what revenue strategists need to know about the aggressive assault from Airbnb on the hotel industry.
1. AIRBNB HAS DECLARED OTAS TO BE THEIR ENEMY
Through a deal with SiteMinder, Airbnb has opened its platform to thousands of boutique and independent hotels. As of now, the initiative won’t include what Airbnb calls mass-produced properties (a.k.a. branded) hotels.
2. AIRBNB MIGHT BE MORE LIKE A HOTEL THAN IT IS AN OTA
The prevailing thinking about Airbnb is that it’s becoming — if it already isn’t — a strong competitor to online travel agencies. But in many ways, it looks, acts and does business as do the major hotel brand companies. In fact, it bears strong resemblance to the asset-free hotel franchise companies that dominate the lodging business.
3. GUESTS WIN, HOTELS LOSE BECAUSE OF AIRBNB
The study is a few years old, but it shows that in the 10 cities with the largest Airbnb market share in the US, the entry of Airbnb resulted in 1.3% fewer hotel nights booked and a 1.5% loss in hotel revenue. The study also showed guests who book Airbnb receive a $57 “consumer surplus,” which might be a lower rate but is more often better accommodations than a hotel for the money spent.
4. AIRBNB LAUNCHES ALL-OUT ASSAULT ON HOTELS AND OTAS
Airbnb’s most ambitious announcement to date is a broadening of its platform and its site to make it easier for consumers to find the kinds of properties that suit their trips. The initiative also incudes the introduction of Airbnb Plus, an upscale product; a new collection of luxury rentals; and a loyalty program.
5. MILLENIALS PREFER HOTELS RATHER THAN AIRBNB
It seems counterintuitive, but new research shows millennial travelers — the cohort every travel company is pursuing — actually like hotels as much or more than they do sharing economy services. While more than half of those surveyed have used a sharing economy service like Airbnb, only 23% of them say it’s their preferred type of accommodation.
6. AIRBNB USES STEALTH STRATEGY TO BUILD EXPERIENCES
Instead of simply overwhelming the industry with its new Experiences platform, Airbnb appears to be deploying a more-subtle strategy that relies on a franchised model in which sightseeing operators and other suppliers are co-branded with the Airbnb name.
7. GLOBAL WAR IN THE WORKS BETWEEN BOOKING.COM, AIRBNB
Two giants in the accommodations industry — Booking.com, the leading online travel agency; and Airbnb, the undisputed leader in the sharing economy — seem to be a collision course for global dominance in travel. Not content to stand still, both companies are pursuing strategies that bolster their current platforms while making inroads in other areas of accommodations.
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