Leading Meeting Professionals

Professional Convention Management Association

February 13 2017

Why Marriott Wants to Explore the Sharing Economy

David McMillin

jwmarriott

As more travelers book apartments, homes, and castles through services like Airbnb and VRBO, the major players in the traditional hotel industry want to be part of the action, too. This week, Marriott announced that it will test a new communal approach to the guest experience at 23 of its Element properties around the world. The design includes a communal room in the center of four individual guest rooms, which will give guests a kitchen, dining room, and lounge to share. Marriott believes it will provide “more collaborative space for groups who would like to spend time together in a more private setting.”

The move holds obvious potential for groups of attendees traveling to conferences. For example, consider a team of exhibitors that has reserved booth space at a trade show; the communal living room might offer a place to unwind and discuss sales leads in a more private location than the hotel bar. Toni Stoeckl, vice president of lifestyle brands for Marriott, told Rich Demuro at KTLA that it’s a natural in today’s business climate. “Really, it’s about a much more shared economy these days,” Stoeckl said. “It’s much more about socializing and a sense of community when you travel.”

Some of those business guests may have already replaced a stay in a Marriott property or another traditional hotel with an Airbnb booking. A 2016 Morgan Stanley report revealed that members of hotel loyalty programs are actually more likely to use Airbnb than other travelers. CBRE Hotels also recently released a study that highlighted Airbnb’s continuing growth path and its potential impact on compression nights. “The fluid nature of Airbnb’s supply suggests that [a] traditional hotel’s historic price premiums realized during peak demand periods will be mitigated,” R. Mark Woodworth, senior managing director of CBRE Hotels, said. “The other impact may be on new hotel construction. Airbnb may be an impediment to traditional hotel construction and could reduce traditional hotel supply growth in many markets.”

SEE ALSO: How Airbnb Open Is Changing the Attendee Experience

Hostels Get Hip

Airbnb isn’t the only threat to Marriott or the rest of the traditional hotel industry, though. While the San Francisco–based company has enjoyed tremendous success over the past eight years, there is another rising star in the accommodation landscape: hostels. No, not the dingy, $20-per-night building you might remember from backpacking across Europe 20 years ago. There’s a new cast of super-hip shared spaces popping up around the world. Consider Freehand, a collection of hostels with locations in Miami, Los Angeles, New York, and Chicago. The Windy City location is approximately two miles from my apartment, and I regularly meet friends for drinks at Broken Shaker, the property’s cocktail bar. Generator Hostels is another growing hostel brand that combines “affordable luxury rooms with unique social events.” Fast Company recently covered the hostel movement, too, citing a statistic that proves hostels are here to stay: The market will grow between seven and eight percent each year through 2018 and represent $7 billion in revenue.

From renting a stranger’s house to sleeping in a bunk bed above a stranger, it’s clear that an emerging generation of guests will continue to change the expectations of accommodations. Hoteliers and conference professionals must be ready to adapt as the members of that generation register for conferences and events. Interested in more insights on rethinking the room block? Click here to watch a complimentary webinar.

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