Whether you call it the sharing, collaborative or even gig economy, this tech-driven business model centered on peer-to-peer transactions for resources is undeniably on the rise—its number of $1 billion+ companies has almost doubled annually since 2012, according to VentureBeat. And travel is, hands down, one of the most affected industries. So we’re taking you on a deeper dive into the sharing economy and tourism.
A prickly cohabitation
Airbnb, now estimated to be worth over $25 billion, boasts two million individual listings across 57,000 cities that are chipping away at hotels’ coveted heads in beds. One recent Boston University study concluded that Airbnb has a measurable, negative impact on monthly hotel revenues. Putting it in hard numbers, a report conducted for the Hotel Association of New York City calculated direct losses at more than $450 million for a one-year period (September 2014 to August 2015) in NYC alone.
It’s facts and figures like these that have led many hotel brands and the hospitality industry as a whole to lobby every level of government for regulation and taxation of Airbnb—particularly those operators with multiple full-time listings—to level the playing field for travelers’ dollars. Heated skirmishes are currently being fought in both New York City and San Francisco.
The latest triple threat
It’s not just the leisure market at stake anymore. Last month, Airbnb signed partnership deals with three top travel management companies—American Express Global Business Travel, Carlson Wagonlit Travel and BCD Travel. With large corporations soon able to book Airbnb listings the same way they’ve always reserved hotel rooms, the sharing economy darling is in good position to increase its revenues—and its impact on the hospitality industry.
What’s a hotel to do?
Airbnb has certainly shaken things up with its disruptive business model, ever-expanding size and ambitious pursuit of new markets. But the company’s whimsical accommodations—including tree houses, clock tower suites, castles and animal-shaped abodes—pose yet another threat to your bottom line. In this age of experiential travel, traditional hotels need to play it smart to compete. At Dana, we consider these challenges to be real opportunities.
First…think local. Whether it’s the design of your lobby, a specialty drink, city-centric cuisine, quintessential local experiences, a digital destination guide or—better yet—all of the above. Make sure your property is embracing the local culture so guests can feel that true sense of place they crave while traveling.
Always…leverage benefits. Hotels have some across-the-board advantages over Airbnb. Among them are a greater sense of personal safety, superior service and amenities, plus the comfort of knowing the room product will meet expectations—or be addressed immediately so it does. Every one of your communications should highlight your property’s distinctive benefits so guests understand what’s really in it for them.
When it comes to the sharing economy and tourism, it’s simply a whole new world out there. Let Dana help you navigate the way to beat the competition—including the hotel down the road and the glass house around the block. To get started, contact Lynn Kaniper today at firstname.lastname@example.org or 609.466.9187 ext. 117.