Yes, it’s finally happened. The beast which lives under the bed - and in the minds - of the hotel sector has come alive and it’s bigger than the lot of you, by market cap as well as number of listings. Think two Marriotts by close of play on the first day of trading.
Airbnb is now a real, live thing which must be reckoned with, not that it hasn’t appreciated the many efforts made over the years by the hotel sector to shut it down. And yes, the next phase is likely to be registration and licensing - legislators are about as down with current trends as the hotel sector, if anyone’s wondering why this has taken so long. So long and it still hasn’t happened.
But when registration comes it’s unlikely to slow Airbnb down and even if it did, even if you cut it down to 3 million listings, it compares quite bullishly to Marriott’s 1.3 million rooms. And yes, all Marriott’s rooms are available all the time and Airbnb’s are not, but that’s not really a factor to quibble over at this point.
Will the ability to buy shares in one’s demons persuade the sector to stand up to it, Buffy style? Can the beast be slain? As they say in Buffy: “In every generation, there is a chosen one…”. Was this Airbnb and did the sector move from ignorance to fear to pretending it didn’t exist, only to be consumed by it?
No, it’s a platform giving people with access to real estate access to people who might like to sleep in it. Get a grip. And like any platform, it will be outmoded at some point, or beaten down and then consumed by someone else - maybe even a hotel company. But before that happens, the hotel sector would do well to be reminded that it’s not beyond a light crushing itself if it doesn’t move with the times. It doesn’t tend to work out so well for the vampires who try to blend into modern day Seattle in lace and frock coats, one recalls from Buffy. Or possibly Twilight. Or that film with Tom Cruise.
Airbnb’s weak spots are, other than the fear of falling supply (and the economic grief following the pandemic should keep homes coming to the market), others doing better. What Airbnb has done well is brand a transaction between strangers and add a veneer of trust and a promise of a unique experience. And it will be a masterclass in branding for some time to come. But it’s not flawless. Stories abounded this summer of bad practice by Airbnb hosts, as well as fake listings and all manner of nonsense. At the moment it’s the market leader so can shake this off for now.
But not for long. The OTAs noticed that alternative accommodations, as it likes to call them, came into their own this year and started piling in. The OTAs also have trusted brands and fearsome marketing machines, as the hotel sector will tell you.
But for the hotel sector to feel less fretful about What Airbnb Means, it needs to start competing.
Marriott's president & CEO Arne Sorenson said at its Q3 results that the company had seen inceased demand amongst its Bonvoy members for whole home rentals during the pandemic, and was looking to developers to create similar products, commenting: “We will remain focused on whole home, warm weather, ski country, resort destinations. I am quite convinced that that will continue to grow substantially, and it will be a nice complementary feature to the traditional hotel business for us.”
Marriott has been in the alternative accommodations business for a while, as has Accor, with its ownership of Onefinestay. But it was only in the past few days that Accor started to look at the volume side, with the launch of the Apartments and Villas portfolio, bringing together its extended-stay hotel brands, branded private residences and Onefinestay brand.
Yassine Hachem, the company’s VP, guest digital product, added: “Apartments & Villas site reflects our ongoing commitment to innovation as consumer travel needs evolve, and allows all of our clients to discover an incredible collection of accommodations around the world on one digital platform, as well as to live an exceptional travel experience: the space, comfort and privacy of a home for a weekend, a vacation or working in a new setting, allied to the convenience of hotel services from Accor brands and to the best of loyalty advantages.”
The site includes more than 50,000 apartments, villas and chalets, in over 350 destinations. So no, not six million. But what the hotel sector learned from the OTAs was that the consumer wants choice and ease of booking. Efforts on booking direct and building loyalty programmes are seeing progress on these. The realisation that what the client wants, the client better get, will see ever-deeper moves into alternatives.
So take a stake, or face a stake to the heart.