Airbnb and hoteliers agree at conference that room exists for mutual growth

Despite the persistent hand-wringing about what effect the sharing economy will have on the hotel industry going forward, an official with Airbnb who spoke at the Hotel Data Conference insisted the company views itself as just a piece of the pie, hotelnewsnow.com reports in the following article:

"Speaking during the “Hotels in the sharing economy” panel, Peter Coles, head economist for Airbnb, said he is confident his company can peacefully coexist with an intact hotel industry.

“Airbnb is not interested in destroying the hotel industry,” Coles said. “We think of ourselves as a complement. Airbnb thinks about offering a local experience, but there are times that it’s better to stay at a hotel. If I didn’t have to stay at an Airbnb for work, I’d love to stay 20 floors up at this hotel (the Omni Nashville Hotel).”

Coles rejected comparisons to other prominent disruptors in other industries, like Amazon and Uber, which Jennifer Yacenda, director of channel intelligence and digital analytics for Starwood Hotels & Resorts Worldwide, said were similar due to a shared “core competency with big data.”

But Coles said those two businesses have a penchant for being more predatory than Airbnb.

“Amazon is unabashedly interested in putting local businesses out of business,” he said.

Isaac Collazo, VP of performance strategy and planning for InterContinental Hotels Group, said the industry’s performance during the period that saw Airbnb’s rise is proof of their ability to coexist.

“Our industry has been growing very, very well these last seven years even with the emergence of Airbnb,” he said.

Want more on Airbnb? Check out Hotel News Now’s Special Report, “The Sharing-Economy Spotlight Beyond Airbnb.”

A different experience

Yacenda leveraged the Starwood Preferred Guest's online community to conduct an informal survey of approximately 150 members, conducted expressly for the purpose of the panel discussion. It revealed roughly a third of respondents had stayed at an Airbnb, the majority of which were leisure travelers seeking a different experience than what they’d likely get at a traditional hotel.

Yacenda said some respondents to the informal survey who stayed at Airbnbs said they typically were looking for a more home-like experience that differs from that of a traditional hotel. Many sought features like full kitchens and neighborhood locations that hotels in some markets don't offer.*

Yacenda said respondents were far more likely to have used Airbnb if they were under 36 years old and unlikely to have used it if they are age 50 or older, and the user base skews more toward males.

Coles said one reason he is confident both hotels and Airbnb can thrive is the additional demand generated by Airbnb, and surveys of that company’s guests seem to back up that belief.

“We surveyed our hosts and guests, and we asked, ‘Would you have taken this trip without Airbnb?’” he said. “A third say no. Another third said they stayed longer because of Airbnb. So more travelers are taking trips and staying longer.”

He said 17% of the company’s bookings come from guests with lengths of stay over 30 days.

“That doesn’t sound like usual hotel-type guests,” Coles said. “And 60% are having seven-plus-night stays. The type of stay at an Airbnb is very, very different.”

Collazo said these data points should be reassuring to hoteliers.

“Guests travel for all sorts of reasons with all kinds of needs and wants,” he said. “It’s not new. We’ve had home rentals in the past. That’s how people have historically stayed at Hilton Head or the Outer Banks. The difference today is it’s a more urban setting and more experiential.”

Panelists noted that, given the smaller and fragmented nature of Airbnb’s supply, it’s never going to make a play for the types of group and meetings business seen at many hotels.

“It goes back to targeting what’s the purpose of your product,” Collazo said.

Seeking an even playing field

One of the most common refrains from hoteliers complaining about the presence of sharing-economy platforms like Airbnb is the fact that many hosts may not abide by the same rules and regulations that hotels do.

Coles said it’s incorrect to assume that means Airbnb is wantonly disregarding the rules.

“Let me dispel some myths; we want to pay taxes,” he said. “We’re doing everything we can to pay taxes at the same rate as hotels in every market in the world. So far, we have 200 individual tax agreements signed and have remitted over $110 million, and we’re actively trying to generate more.”

He said logistical concerns get in the way of complete regulatory compliance.

“The only thing slowing us down is municipalities are set up to collect from hospitality companies with large in-house accounting departments and not from people collecting $100 checks. Airbnb is committed to creating that infrastructure, but it’s been a huge tech challenge. We also want a level playing field.”

Coles said the company also is working on cracking down on deceptive listings, including one an audience member complained about where a host in a branded condo was incorrectly representing his space as a room at a hotel on the same property.

He said the company has made safety and cooperation with neighbors a priority, in part by launching a “neighbors” tool that simplifies the process of reporting issues with a host, but safety regulations designed for hotels and larger businesses don’t always make sense for small Airbnb units.

“Copying and pasting the regulatory requirements for hotels and applying them to Airbnb is something that often doesn’t make sense,” Coles said. “Nobody would say there should be a security guard on notice at every listing. However, clear mechanisms need to be in place to make sure hosts are property reviewed and vetted. And the same thing should be true for things like fire extinguishers, smoke detectors and so forth.”

Opportunities for cooperation?

Benjamin Habbel, founder and VP of global business development for Voyat, said Airbnb has an opportunity to step in and compete with the traditional online travel agencies by letting hotel brands list their product on the platform, which already happens with some individual properties.

He said Airbnb’s relatively low commission structure—which Coles said is just 3% of the list price—could be attractive.

“If Airbnb presents a solution with an economic model that’s more attractive than the traditional OTAs, it’d be hugely attractive and disruptive,” Habbel said.

But Coles said Airbnb isn’t interested in playing in that space because much of the hotel supply that comes online doesn’t fit the type of experiential stay the company wants to target.

“The idea of Marriott and Starwood being on our site isn’t anywhere in the realm of conversation,” he said. “But bed and breakfasts and boutique hotels use it because of the reach we have.”

During the panel, an audience member questioned whether the presence of Airbnb hosts near his properties could represent possible new revenue streams and if the company would be interested in partnering for things like selling laundry and housekeeping services or selling guests access to amenities like pools and fitness centers.

Coles said the company is always attracted to “interesting local experiences,” which it often curates for guests via host-generated guidebooks, but also said his company would be willing to partner with hotels to offer those kind of experiences where available.

“The more the merrier,” he said. “I love that idea.”

Read more here.

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