While it is crystal clear to me and many other hoteliers that Airbnb is a harbinger of doom for regular hotels geared towards leisure guests, there are still quite a few members of the hospitality industry – and the greater community at large for that matter – who see it as a positive force for change. Such individuals posit that the effects this company, and others like it, are having on hotels will ultimately benefit their incumbent municipalities or have no negative impact on other travel sectors.
For clarification, while I am hardly a luddite and fully understand that disruption is inevitable, I am still quite worried for the long-term successes of many traditional hotels, particularly those operating in the midscale and select service segments. Glass half full, the rapid proliferation of all these sharing economy accommodations should not be mere doom and gloom, however, but an opportunity for you to improve your own properties.
On this note, there is indeed ample evidence showing that Airbnb and other prominent members of the alternate lodging provider economy are significantly affecting the greater hotel and real estate markets. But rather than selfishly framing this ongoing issue through the lens of our own plight, another way to argue our point of view is to look at the top purported advantages of Airbnb then see how we can counter these ideas or make incremental upgrades to our products to help close the gap.
More character than a hotel.
While it may be true that Airbnb listings each bring their own unique charm accrued through years or decades of hosts living in their units and populating them with all manner of eclectic furnishings and artwork, it is nevertheless quite calming about entering a guestroom where you are already guaranteed that everything will be in its right place. This is especially true for bathroom amenities and towel services, two features that I rarely see hotels emphasizing.
That said, hotels can and should improve the individuality of their guestrooms so that we can better emulate the success that Airbnb has derived from this primary feature. While every initiative you take to make your rooms distinctive will require some form of capex, something nevertheless has to be done in this regard, lest you get labeled as ‘just another boring hotel’.
Listings are embedded in cool neighborhoods.
No hotel is built on a whim. Unlike an Airbnb rental, every new construction must first be justified through some form of market assessment which all inevitably steer properties towards high traffic areas and not necessarily the ‘cool’ parts of town. But dare I suggest that these high traffic areas became just that because they were already cool in some way, shape or form? In more ways than one, this point is a marketing ploy by alternate lodging provider advocates to cover up the fact that many listings are not all that convenient for newcomers to a given municipality.
Hence, one key advantage of hotels that can be leveraged is the fact that many of them are in fact very centrally located in the ‘coolest’ parts of town. The apt word to embrace here is ‘hyperlocal’ whereby you must all become experts in everything happening within a three-block radius around your property, and then advertise accordingly along with any local partnerships you can stir up.
Access to kitchens and laundry.
Alas, traditional guestrooms are not built like apartments. Instead of dropping millions to transform your property into a long-term residence with short-term rentals, hotels can compete by better promoting their in-house laundry services as well as their culinary excellence. After all, what’s better than doing laundry? Having it done for you! What’s better than making your own meals? Having a professional chef cook for you while you enjoy the ambiance of a great restaurant with even better service. Of course, there is a stark difference in terms of cost to the consumer, so it’s up to you to find a pricing strategy that convinces guests to prefer your amenities over doing it all themselves.
The modern traveler wants a new kind of experience.
They sure do, and Airbnb is giving them just that! It’s up to every hotelier – and not just the general managers – to come up with interesting activities, events, partnerships and all other manner of experiences to get our guests excited about staying with us. Again, the onus is on us to adapt to the times. Unlike individual hosts, though, hotels a full team of experts capable of brainstorming great concepts as well as executing them to perfection. As a senior executive, it’s your job to vet ideas and delegate so your team is accountable and so projects actually get done.
Airbnb supports the everyday homeowner who is only trying to earn a few extra bucks.
There are indeed a fair number of listings that are spare rooms or basement suites, but one quick look at the website will reveal that most rentals are whole apartments or houses entirely separate from the host’s primary residence. These aren’t the sob stories you hear about people with no pensions using Airbnb just to scrape by. These are full-fledged landlords without the proper commercial licenses (and often without the proper tax payments) to do so.
Only circumstantial evidence to support claims of disruption to rental and real estate markets.
Yes, we’re going on the defensive here, but it is worth stating nonetheless. Put aside the latest statistical findings for a minute and just think in terms of rational economic incentives. If sharing economy accommodations didn’t exist, what would all these homeowners do with their surplus residences? Leaving them vacant is a poor use of capital, so they would most likely throw them back into the long-term rental market or put them up for sale in order to benefit from the greatest financial gain.
Nowadays, however, because such popular entities as Airbnb do exist, homeowners have collectively realized that they can earn more money by utilizing this website rather than going the traditional route, thereby reducing the overall pool of units in both the rental and the real estate markets. This is bad news for everyone as it inexorably leads to less neighborhood renewal with a decreasing number of new homeowners who decide to renovate, fewer contributions to municipal property taxes, and skyrocketing prices for both buyers and renters as the stunted supply can’t keep pace with demand.
(Article by Larry Mogelonsky, originally published in Hotel News Now on February 13, 2018)