The first time I wrote about peer-to-peer booking site Airbnb was 17 May 2013. Back then the nimble upstart listed 300,000 privately-owned hotels, apartments, flats and other accommodations. It had 4 million guests. And it wasn’t on the hotel industry’s radar.
When I reached out to various hotel professionals to get their input, the most common response was, “What’s Airbnb?” The second was, “We’re not paying much attention to it.”
“There may be some incremental leakages, but we don’t see it as being anything really substantial,” said PhoCusWright’s Douglas Quinby regarding the platform’s ability to steal share from hotels.
Fast forward six months, and Airbnb has become the topic du jour at most industry conferences and events. It’s the “pool lift” of 2013, although fewer people understand it.
What’s changed? An increase in traffic, for one. Airbnb now has more than 500,000 listings worldwide in 192 countries. The site’s been used by more than 9 million total guests.
Also of note: Airbnb hired Chip Conley, founder of Joie de Vivre Hospitality, as its head of global hospitality charged with improving the guest experience.
Beyond that, the little-distribution-platform-that-could has elbowed its way into the consciousness of savvy travelers throughout the globe. They may not all use it. They may not all trust it. But they’re all aware of it, and winning that kind of brand recognition is often half the battle.
Airbnb is finally on industry executives’ radars as well.
During the recent Independent Lodging Congress in Philadelphia, Expedia’s Amy Severson said, “I think they absolutely have a place. It’s a different segment, but there are some consumers that are craving that type of product. I think they’re going to continue to gain steam. It’s providing tools and making it easier for people that are wanting that type of product to find it.”
Mark Woodworth of PKF Hospitality Research, who was speaking on the same panel, agreed. “It certainly seems like it would have a lot of potential.”
Less enthusiastic about Airbnb’s growth potential were some elder hoteliers of the industry, who largely downplayed its influence during a panel at the World Travel Market in London.
“I don’t think it’s a serious threat to the traditional, conventional hotel business. It’s just another aspect of our hospitality industry,” said Michael Flaxman, former COO of the Americas for Accor.
“I think it has a short lifespan,” said Russell Kett, chairman of HVS London, who pointed to increasing pressure from municipalities to impose occupancy taxes and other regulations on property owners who list their spare rooms or apartments on Airbnb. “Once you pop those sort of conditions on it, it becomes more of a challenge and less interesting—a nice flash in the pan.”
Kett was right to point out the taxation issue. It’s a formidable hurdle, but one I believe Airbnb will overcome. When customer demand begins to swell for a new service or platform, issues such as taxation and regulations become necessary wrinkles that must get ironed out.
What’s more interesting, to me at least, is how perception and opinions framing this discussion so routinely fall along demographic lines. Put another way: The older the speakers, the more likely they are to dismiss Airbnb. The younger speakers are more inclined to speak of its potential.
The generational gap is indicative of broader divisions separating young and old over rates of technological adoption and social media engagement. This is why there’s so much focus on developing hotel offerings that appeal to the next wave of travelers; millennials are a different breed who are more inclined to seek authentic experiences at affordable prices through social and digital channels.
That’s exactly what Airbnb provides and why I’m excited to see how this conversation continues to evolve during the next six months.
Now on to the usual goodies …
What’s making me happy this week
The art deco stylings of Miami’s South Beach hotels. I hesitate to admit I’ve never been to South Beach. Though my travels have taken me as far as Dubai and India, this domestic pocket of concentrated culture has always eluded me—until Wednesday when I flew down to moderate a panel for the Tour de Data Miami event, hosted by HNN and our sister company STR Analytics, in partnership with the Cornell School of Hotel Administration.
Our event was held in the penthouse room of The Raleigh Hotel, which served as a perfect vista from which to take in a row of iconic beachfront properties in all their splendor. The Richmond, the Shelborne, the Marseilles, the Dorchester and more—each was a wonderful representation of that iconic design aesthetic that has made the region such a hotbed for hotel investment.
Stat of the week
More than $1 million: Approximate price per room paid for the 50-room Calistoga Ranch in Napa Valley, California, one of the highest (if not the highest) prices paid on a per-room basis ever in the United States.
Quote of the week
“It’s very unscientific. … Understanding that X factor is something you have to do yourself, ultimately.”
—Thompson Hotels and Sixty Hotels founder Jason Pomeranc describing how he chooses locations for his trendy boutique hotels.
The comment was part of a fascinating discussion of how psychographics drive development in the independent hotel sector. Whereas chain-affiliated properties are typically real-estate and demographic plays (i.e., a Courtyard by Marriott is built next to a grade-A office complex), many boutique hotels are built based on cultural epicenters, such as New York’s artistic SoHo district, where Pomeranc built the 60 Thompson years ago.
Reader comment of the week
“There are two things that strike me after reading this article. First is that in speaking with numerous managers and even regional managers, many companies are not seeking entrepreneurial spirits. More and more frequently, the decision is made to make a safe hire or safe play, instead of looking to be innovative, or as I was taught to think, to embrace the entrepreneurial spirit either as an individual, or as a corporate entity. Second, who is going to break the cycle. Hotels as individuals can’t (and shouldn’t) be the ones to cut out their bottom line. This is a brand decision in exploring which OTA’s if any provide actual partnerships, and letting those who are to parasitic die on the vine. Unfortunately, the brands have not been willing to make the tough calls that are necessary to lead. Instead they try not to ruffle the waters and in winning the short term battle, they are ceding the power to win the war.”
—Reader “Curt P. Baker” responding to Jason Q. Freed’s article, “Hoteliers look to innovation to save industry.”
This was one of many thought-provoking comments sparked by Jason Q. Freed’s coverage of the Revenue Strategy Summit in New York. If you haven’t read the piece yet, or if you have not shared your thoughts, I encourage you to do so.
Email Patrick Mayock or find him on Twitter.
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