Skift: Airbnb quietly positioning to disrupt the MICE industry

Airbnb has been very vocal in recent years about its rising popularity during large international events, such as the World Cup in Brazil in 2014, the New York Marathon last year, and Super Bowl 50 last weekend in San Francisco, Skift magazine reports in the following article:

The specific message has focused on the room-sharing company’s value in fulfilling the demand for bedrooms that the hotels themselves alone could not.

By doing that, Airbnb has also slowly been positioning itself as a more viable hospitality product for business travelers attending conferences and large events who want an alternative, more personalized travel experience.

The vast majority of meeting planners and conference organizers have been slow to embrace room-sharing companies. The reasons are many. They range from a lack of consistent room product for large groups to questions about security and insurance, billing and payments, room block management and general logistics, etc.

That’s beginning to change. As Airbnb bookings grow exponentially year-over-year, there are growing numbers of business travelers who’ve booked Airbnb previously for leisure travel, and now they want the same customized experience when they travel on business.

Spurring that shift, both Airbnb and members of the meetings industry are formalizing products and partnerships to help planners incorporate Airbnb listings into their programs.

Formalizing Airbnb For Meetings

Experient is part of Maritz Travel, which is one of the world’s largest third-party meeting management companies. In January 2015, Gary Schirmacher, senior VP, industry presence & strategic development at Experient, met with Michael Brous, senior business development lead at Airbnb, to discuss ways Experient could offer Airbnb inventory to its clients.

Schirmacher says he and Brous initially weren’t exactly sure how Airbnb could work with an event planning company. Although, he told Brous, the demand was certainly there on two fronts.

First, many major cities with significant convention business exceed traditional hotel room capacity on a regular basis, making it difficult to drive higher attendance. Second, more and more meeting attendees are asking specifically for Airbnb accommodations rather than hotels.

Especially in the association market, it is incumbent on planners to cater to their attendee preferences to drive membership.

After repeated discussions, Schirmacher and Brous saw a value in Airbnb being able to provide planners with detailed metrics about attendee booking patterns on Airbnb. Attendees have been booking outside the official room block anyway in increasing numbers in recent years, so by teaming up with Airbnb, Experient could offer its clients insight that no one else was providing.

Teaming up with Airbnb

In September 2015, Experient announced that it would begin offering its meeting clients the ability to include Airbnb listings in their room blocks. That was the first time that a company of Experient’s scale officially offered planners that option.

“We teamed up with Airbnb to really assist our customers, especially in major markets with condo and apartment dwellings downtown close to the convention center,” Schirmacher told Skift. “It’s a really good option for our customers when there’s significant compression where the blocks are sold out. And then some customers are really looking at it when they have a segment of attendees who might want that kind of product. It’s been a good option for us to date.”

In October 2015, Schirmacher discussed the rise of the sharing economy’s impact on the meetings and events industry at the inaugural Lanyon Live 2015 conference in Dallas, with Dorian Stonie, senior manager global travel & tech solutions at Salesforce, and Karoline Mayr, global head of travel & expense at Uber.

“People in my company and some of our customers didn’t think this was viable,” Schirmacher said during the session. “But this is here to stay, and we’re in it for the long haul.”

Stonie added that sharing companies like Airbnb provide a “relief valve” when demand exceeds room supply. He explained that Salesforce’s annual Dreamforce conference in San Francisco was only able to grow because of the added Airbnb inventory, with the biggest demand for room-sharing coming from international attendees in Europe and Asia.

This idea of pigeonholing Airbnb as a relief valve for the hotel industry seems to be the angle that everyone in the meetings industry is adopting because it’s safe. However, it undermines the present value and future potential of Airbnb’s impact at conferences, considering the company’s growth and consumer demand.

For now, Airbnb can ride that wave of perception because it helps negate the ongoing confrontation with hotels over everything from bed taxes to duty of care. Eventually, Airbnb will promote itself to the meetings market more aggressively with messaging promoting the company as a first-choice option, versus a “We’re here if you can’t find a hotel” positioning.

Airbnb’s ‘Business Travel Ready’ Listings

Chip Conley, head of hospitality at Airbnb, told Skift that business travel makes up about 10% of overall bookings on the platform. He explained that Airbnb often embeds its listings in conference websites, and it promotes the company’s value proposition in convention materials to provide attendees an alternative user experience at various price points.

Conley also wants to correct a myth about Airbnb that he feels is pervasive in the travel industry at large.

“Airbnb is often identified as a great option only for the younger traveler,” he told us. “However we see a wide distribution across age groups and demos, with 33% of our business travelers being between the ages of 36 to 50.”

Regarding the company’s engagement with meeting planners to date, Conley reiterated Airbnb’s growing niche in destinations struggling with enough hotel capacity to meet demand, either seasonally or during big events.

“Airbnb has worked closely with planners in the past to highlight our listings as a great option during times of high supply compression,” he said. “We identify events where Airbnb can provide both a unique experience and alleviate cost pressure, because one of the goals of our partnerships with conferences is to ensure that Airbnb is differentiated from the traditional hotel experience.”

The bit about “alleviating cost pressure” is a big differentiator for Airbnb, which can often provide rates that traditional hotels can’t match. But for now, relating to the meetings sector, Airbnb is placing more emphasis on its new business traveler initiative.

In November, Airbnb launched its Business Travel Ready program that identifies specific listings with a Business Travel badge. That certifies that the hosts are providing additional amenities suitable for business travelers that both attendees and companies require. Those range from ironing boards to fire alarms and CO2 detectors.

Heightened level of attention

Airbnb is positioning that program to meeting attendees as an enticement to expect a heightened level of attention toward their specific needs. And then it’s promoting the business platform to planners with the added benefit of detailed reporting and direct billing.

“Airbnb has done a nice job being able to segment their inventory and being able to provide clients the ability to report on who might be taking advantage of those type of places they have,” says Schirmacher. “We have people at Airbnb that we work with, and they’ll set up an actual block so that we can track and know who’s going into that Airbnb block, and then we can report on it for our customers.”

Presently, Airbnb doesn’t provide a meetings-specific section on its website to engage planners directly, but that could change down the road. Meeting planners by and large are a very specific niche in the global tourism industry, and they respond best to messaging that specifically speaks to their highly nuanced needs.

While Airbnb’s Business Travel Ready platform moves in that direction somewhat, there’s a huge opportunity here to tap an entirely new global market in a much more targeted fashion.

“It’s possible that we will create a meeting planner section in the future,” Marc McCabe, business development lead at Airbnb, told us. “We’ve chosen for now to go the route of bringing the tools to business travelers that they can choose to use in any context. Conferences and meeting participants are a big part of that, but that also includes small meetings and corporate retreats.”

We asked McCabe about the issue of regulation around transient occupancy taxes, because that’s the main bone of contention coming from the hotel sector, which feels Airbnb is enjoying the benefits of an uneven playing field.

“We want to work with any city that wants to work with us,” he said. “I think we’ve shown that anyone who comes to us and wants a structured arrangement around occupancy tax, that’s equivalent to what’s already in place, then we’ll jump in with both feet. It’s a gradual process, though. It’s not just something you turn on overnight.”

Read more here.

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