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Airbnb isn’t killing the hotel industry; a lack of innovation and creativity is.

There has been a noticeable ‘Airbnb effect’ in the tourism industry. This has been especially evident in the accommodation sector as hotels seek to become more ‘Experiential,’ access-oriented, intimate, personalised, and on-demand. For larger hotel groups, this has led both strategic investments. In 2017, AccorHotels combined three of its ‘Airbnb like’ rental brands – onefinestay, Travel Keys, and Squarebreak into a single unit, while Hyatt invested in Oasis, which has access to alternative accommodations in local neighbourhoods. Unlike Airbnb, Oasis has employees in each destination who welcome guests and act as local concierges. Guests have access to a series of private members’ clubs in each destination, which replicate lifestyle hotel lobbies. In 2016, Expedia purchased Homeaway for US$3.9 billion to add vacation rentals to its online travel booking options. Other hotel groups have sought to develop experiential brands, such as Marriott International’s ‘Moxy’ brand, Hilton’s Tru brand and Home2 Suites and Best Western’s upper-scale Vib and budget-friendly Glo brands. However, as the United States remains Airbnb’s biggest market with 660,000 listings, the American Hotel and Lodging Association and other umbrella organizations have also sought to fend off Airbnb through lobbying and attack ads, spawning spawned pro and anti-Airbnb proxy groups. The recent news that Airbnb is stepping up its challenge to traditional hotel operators by launching branded, purpose-built apartments in the US will only exacerbate tensions.

How then can hotels react? New brands and Independent hotels have sought to redesign hotel (lobby and rooms), so that they are a ‘home away from home’ and locally oriented. They have sought to create bright common spaces, such as rooftop bars and spaces which are both intimate, connected, and communal. From getting rid of clunky wardrobes and desks to adding ‘lifestyle ethos’ bars, restaurants and coffee shops to the lobby area, hotels have also sought to incorporate and sell real life ‘experiences,’ by making better use of customer data and utilize techniques prevalent in Airbnb such as user feedback, flexibility (e.g. self-laundry, flexible check out, co-working spaces), authentic local interactions (i.e. linking guests to local guides) and easier, friction-free transactions. Hotels and other accommodation providers increasingly use events, shareable moments and content that speak to customer values, and address the desire for authenticity, flexibility, accessibility, efficiency and adventure. The ‘Airbnb effect’ has also led hotels to follow Airbnb into incorporating and selling real life ‘experiences’ and working with collaborative platform businesses. Many hotels now facilitate food delivery platforms to deliver food to guests via the front desk. Hyatt Centric, a Hyatt chain aimed at younger travellers, launched a ‘Restaurant to Go‘ service so that guests can order from restaurants and have food delivered to their rooms in 20 minutes. Hotels are also working / investing with platforms to provide guest access to local experiences. Marriott International recently took a stake in PlacePass, to offer tour- and activity-experiences. However, some hotels have reacted by taking the worst elements of Airbnb by adding fees and surcharges, such as mandatory gratuities for the housekeeping staff, fees for holding luggage, fees for early departures or even fees for having a safe in your room.

 

Hotels need to work with the collaborative economy and be open to change. Otherwise, their businesses may be cannibalized. In many ways, the collaborative economy has revitalised the travel and tourism industry. While many regulatory issues have yet to be solved, it has introduced new quality processes, efficiency innovations and ways to think about sustainability, wealth distribution, customer care and working with their communities. As traditional travel and tourism businesses already know and work within communities, they are best placed to offer their customers personalised rather than a uniform experiences. From offering walking tours to guests, showcasing local’s bands/artists in a hotel lobby, or a local restaurant working with a local hotel to offer food to room deliveries, businesses can often work outside Silicon Valley based platforms. The efficiencies of the internet do draw on economies of scale and scope. A platform such as Hello Scout offers concierge services to hotels who cannot afford a full-time one, BonAppetour an authentic local dining experiences and vayable.com a local tour guide. Business need to work with platforms that gives value to their customers, who increasingly want to live like a local, even for an overnight trip. If that gives value to customers, it provides impetus for customer satisfaction, positive reviews and positive (digital) word of mouth. It is these benefits that traditional businesses should focus on, rather than focusing on losing control over guest experience, or moving away from any uniform, standardized experiential offering in which they may have become dependent. This opening up to the collaborative economy can be daunting for businesses and staff who may not know how working with collaborative economy platforms may take them. Passing their guests onto tour guide from vayable.com rather than in-house staff member is not about losing control, but restructuring their business to facilitate a better customer experience.

https://www.linkedin.com/pulse/airbnb-isnt-killing-hotel-industry-lack-innovation-o-regan-phd/