You’ve probably never booked a room through Airbnb. While many veteran members of the hospitality industry may not be familiar with the community of rental properties, the recent buzz swirling around the California-based startup is making one thing clear: the company does not believe in making small plans.
Since its founding in 2008, Airbnb has welcomed more than 11 million guests in 192 countries around the world, and those numbers look like they’re set for a promising future. The company continues to raise private equity funding, and a recent article in Fast Company shows that CEO Brian Chesky sees no ceiling for the growth opportunities.
Despite these impressive numbers, many hotel experts write off Airbnb as a real threat because the massive network of individual hosts cannot come with the guarantee of customer service that guests can find at trusted hotel brands. I can’t argue with this. However, while Airbnb might not look anything like a hotel chain, the company is certainly starting to act like one. In recent weeks, Airbnb has agreed to begin paying hotel taxes in San Francisco and transient lodging taxes in Portland.
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I don’t believe loads of the professionals who attend conferences are going to look outside the room block to book a trendy loft apartment anytime soon, but Airbnb’s rise to fame does deserve more attention than it’s currently receiving. A continuing shift away from traditional accommodations carries significant implications for the future of the hotel industry.
Airbnb seems poised to attract adventurous leisure travelers who don’t care about traditional perks such as in-room dining options or the hotel’s fitness center. These aren’t business travelers with expense accounts. Still, the audience is quite large. In 2013, Airbnb welcomed more than 6 million guests around the world, and approximately 2 million of them were American travelers. How will hotels make up for all those leisure travelers who are looking elsewhere? On an equally important note, what will those unfilled rooms mean for average daily rates for loyal hotel guests?
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In addition to the travelers that are choosing Airbnb right now, this conversation must look to the future, too. Like so many other businesses, hotels are chasing after an emerging generation of travelers, and Airbnb delivers offerings that fit many of their needs with low-cost accommodations in some very unconventional locations such as tree houses and airstreams. How will hoteliers outline plans to deliver the one-of-a-kind experiences that appeal to many young guests?
And once those young guests mature into leaders who pay to attend conferences, what if some of them still prefer the unexpected authenticity of booking with Airbnb? This may seem hard to fathom right now, but it’s far from impossible. Sure, a meeting marketing campaign can promote the exclusive discounts of the host hotel and the convenience of staying near the meeting, but what if the importance of these benefits declines over the next decade?
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What do you think Airbnb means for the future of the hotel industry? Are major chains poised to deal with this unorthodox competition? Go to Catalyst to share your thoughts.