What Is Airbnb Actually Doing to the Hospitality Industry? – Hospitality & Catering News

 

What Is Airbnb Actually Doing to the Hospitality Industry? – Hospitality & Catering News

Roseanne Luth, Founder of Luth Research Airbnb sailed onto the lodging scene eight years ago, and the industry hasn’t been the same since. One estimate claims that by 2020, Airbnb hosts will take a staggering 500 million bookings a night. Hoteliers will be closely following as Airbnb’s legal battles wind their way through courts in San Francisco and New York City.

hospitalityandcateringnews.com

Airbnb sailed onto the lodging scene eight years ago, and the industry hasn’t been the same since. Today, Airbnb operates in 191 countries and 34,000 cities. One estimate claims that by 2020, Airbnb hosts will take a staggering 500 million bookings a night.

It hasn’t all been smooth sailing, however. New York City, Barcelona, and Iceland are among the places that have mounted fierce resistance to the company, which enables people to list or rent short-term lodging. Hoteliers will be closely following as Airbnb’s legal battles wind their way through courts in San Francisco and New York City. But regardless of how individual court cases go, Airbnb has already had a huge impact on hotels, and it is unlikely to disappear anytime soon.

There’s no question that Airbnb has disrupted the lodging industry, and hotels need to adapt by making better business decisions and better meeting their guests’ needs. Here’s how Airbnb is affecting hotels — and what hotels can do about it.  It’s important to state up front that the sky is not falling. A CBRE Hotels’ Americas Research study found travelers spent $2.4 billion on Airbnb lodging from October 2014 to September 2015.

In the grand scheme of things, that’s not a huge amount of money — just 1.7% of the $141 billion generated by hotels over the same period. Yet it was a significant jump in Airbnb lodging from the same period the previous year, and most hoteliers believe Airbnb is affecting their bottom line.

In January, Pennsylvania State University released a report commissioned by the American Hotel & Lodging Association which estimated that nearly 40% of Airbnb’s revenue in the 12 largest US metropolitan areas came from hosts with at least two units.

The “at least” part is crucial. Some Airbnb hosts had more than two units, suggesting these are not merely hosts renting out a spare bedroom or their apartment while they’re out of town. These are hosts running unregulated hotels.

That’s why hotel advocates say the 1.6% room-rate decline New York hoteliers experienced in 2015 was no accident; it was the result of Airbnb.

The evidence is mounting. A 2015 study estimated Airbnb’s operations had a negative impact of $2.1 billion on the lodging industry and the economy of New York City as a whole in the previous year. The report estimated that hotels lose approximately $450 million in direct revenues to Airbnb on an annual basis.

Clearly, the lodging industry is in upheaval. It’s time for hotels to find ways to do something about it.

The hospitality industry has often been slow to adopt new technologies or find ways to improve its guests’ overall experience. With new players like Airbnb, innovation is a must for hotels that want to thrive.

Hotels need to evolve and adopt practices and technologies to better compete with services like Airbnb. Here are a few strategies they can try.

Airbnb knows an incredible amount about its users. It maps the user’s complete journey from browsing listings, booking and completing their stay, and leaving a review of their host once they have left. Because this is all completed through their own channel, Airbnb is able to use user data to improve the guest experience, tweak their product, and find growth opportunities.

Hotels would do well to adopt a similarly data-minded approach. Currently, many hotels have a piecemeal approach to technology, using many different technologies and platforms for various functions. This makes it hard to follow a guest’s journey, much less analyze it. Hotels need to adopt single platforms to give them a complete view of guests’ interactions with the hotel, from booking to checkout.

With the proper technology in place, hotels could use data to make better business decisions. Comprehensive data can help identify a new target market, present a new marketing angle, or open avenues for tailored offerings.

Those decisions need to be driven by data rather than instinct. The first step is for hotels to deeply invest in data and the technology required to capture it.

About 70-75% of Airbnb hosts and guests review one another within 14 days. In contrast, only 2-10% of hotel guests leave feedback.

This is a huge missed opportunity for hotels to better understand their guests’ needs and wants, and for hotel staff to see how their work impacts guests. There is no feedback loop between guests and staff, which makes it harder to build trust and deliver personalized service.

Hotels should consider how they can strengthen the feedback loop to get input from their guests, and how they can communicate back to their guests what they have done with that feedback.

The strength of hotels comes from the traditional elements of hospitality and service that Airbnb can’t offer. Hotels are more reliable and flexible with arrival times, and guests are less likely to be disturbed by rowdy neighbors. Many guests enjoy going to hotels for the entire hotel experience, with amenities like spas, concierge, and room service. These features are simply not available through Airbnb.

Collecting good data and strengthening the feedback loop will also help hotels to identify what their guests value. Perhaps it’s a flexible arrival time that appeals most, or having hotel staff a phone call away, 24 hours a day. The best way to know is to collect data and to ask guests directly. By investing in customer research and communication, hotels can find their unique advantages and leverage them.

Airbnb will continue its legal, regulatory, and public opinion battles. Smart hoteliers won’t wait for the outcomes to make changes that set their hotels apart.

Copyright © · Hospitality & Catering News

 

 

 

Author

View all posts from

Bringing you chef news from around the UK and beyond.

Get social with us!