Despite what many have dismissed as a mere blip on the radar, Airbnb is a force to be reckoned with, and we have yet to see just how widely it will impact our livelihoods.
But before we discuss this disruptive company and its effects on the hospitality industry, let’s look to Uber. The vehicle for hire industry underestimated Uber by not adapting to the new paradigm of internet and mobile-based transactions, and my fear is that we are making the same mistake with Airbnb.
It is not only a hotel service for backpackers or those looking for esoteric accommodation experiences. Not anymore at least. As new listings come online, the doors are opening for more and more key population groups to find something they want on its website, even in areas previously deemed ‘off limits’ like traveling for business or the ultra-luxury market.
Airbnb is now a household name, but it is only just starting to supplant its ‘millennials only’ image. Along with the bargain hotel prices provided by the OTAs, this online service has increased the worldwide demand for travel by making it more accessible. Soon, though, it will target all the same consumer types that we depend on to stay in business. And it may already be too late to stop it!
Airbnb’s website beats any hotel
You love your website, and you’ve spent tens of thousands of dollars on it. But, frankly, it pales in comparison to Airbnb’s web venture. Not only does it have a booking engine that shows you all upfront costs, but it also fluidly integrates comments from its own user data. The commentary and description of the rooms being sold reads like a storybook written by people who truly care. They are not selling; they are trying to make your travel more interesting. Moreover, the presentation is seamless on mobile, tablet or a laptop computer.
Social media was meant for Airbnb, or is it the other way around? When you are contemplating booking a room, you don’t research your options through some third-party gateway such as TripAdvisor, but directly with members of the Airbnb community – both the users and the purveyors of the product. This provides a level of confidence in the buying decision that is very difficult to match. The site even reports on how long it took for the buyer to post the rating. Confidence is assured.
Ever visit a city for the first time? Not sure of where you are staying relative to where you want to visit? Airbnb integrates a map function directly into every search. You can see all participating properties and instantly select based on availability and location. This makes Airbnb both intuitive and logical. You end up searching the full range of accommodations just for the fun of it, especially when you browse in the $1,000+ range.
Lastly, Airbnb reveals the complete rate breakdown: room, cleaning fee and commission. We all like to feel we are getting a bargain, and with Airbnb you see the net price along with all add-ons. Imagine if your hotel site showed the net rate, then the housekeeping fee and the third-party commission.
Dispelling the myth
Worrisome for the luxury market is Airbnb’s wide range of product offerings. Yes, you can still find some low-end rooms to book. In fact, the low to middle ranges – the supposed ‘bottom feeder’ customers – comprise most of what’s available. But Airbnb’s accommodations stretch up to multi-bedroom homes and into some of the world’s most exclusive locations. Heck, you can even book luxury treehouses on the site!
It is this premium segment that will eventually make significant inroads into the luxury hotel market. If a cardinal rule of the upper echelon of travel involves the creation of vibrant and exceptional experiences for guests, then Airbnb has it in spades, especially once it fully rolls out its aptly named Experiences program, which connects travelers with local guides and activity operators once they’ve booked their accommodations. Each selection is ‘unique’ as it isn’t a part of a branded hotel but contains the personal styling of the individual landowner or renter.
Along these lines, consider the baby boomer market. Airbnb might be a table name for them, but it still holds the perception as a forum for the afore mentioned bottom feeders. As this demographic looks for more profound experiential vacations to satiate the ample free time made possible by retirement, Airbnb offers ‘badge-generating’ alternatives to hotels. Why stay where everyone else stayed? Airbnb not only provides a truly unique travel experience, but also bragging rights to boot.
What can hoteliers do?
First and foremost, study Airbnb’s website and business model. Learn all you can about it in a general sense and, more specifically, the properties that are being offered in your vicinity. Understand the price points that you are competing against and see where you stand. You don’t want to necessarily change your pricing structure or your amenity packaging. Rather, try to understand this new competitor and treat it with the same respect and acknowledgement as other properties in your comp set.
Second, take a good, hard look at your own website. Look at how it ‘talks’ to your audience and the convenience factor. See how friendly it is to use and navigate as well as how many clicks it takes from arrival to confirmation of booking. Torture test it on a mobile device. Additionally, ask the same from your web agency. Encourage them to learn from Airbnb and make recommendations as to how you can enhance your site’s profile and sociability. Then run, don’t walk, to properly fund the necessary work to make your site more user friendly. This may not be a quick fix, but it is worth it.
Next, get involved with your local hotel association and make sure all the other hotels in your constituency are participating as well. The issues pertaining to Airbnb are very political, meaning that tax dollars are at stake. Hoteliers want a fair share: Why do individuals checking into your property pay local and state taxes, yet those checking in with Airbnb do not? What about local tourism levies, health, insurance, fire and safety code issues? And does the Airbnb location being offered violate any municipal codes? Meet with your local representatives. Calculate, then identify the losses in tax revenues – ditto job losses. You’re not arguing for some sort of tax reduction or special favor, only an equal treatment for everyone in the accommodations sector.
Airbnb is going to improve
It is not going away, so deal with it! They already have some outstanding rooms available and will increasingly become an important factor in all segments. The push for the premier end of the market is compounded by the launch of the Airbnb’s quarterly magazine, Pineapple, which released its first issue in November 2014. Printed with barely any distracting advertisements and showcasing only a few prime cities to focus its awareness profile, this new venture will soon be a strong adjunctive to the company’s luxury-seeking strategy.
With all this, it’s nearly impossible not to view Airbnb as a somnolent hospitality giant about to scarf down its first coffee of the day. Sure, it’s not for everyone. While you may be appalled by the concept of buying your hotel room in this fashion, millions are finding it increasingly acceptable. And these are the people who will not only encourage others to give it a try – they will also make it part of a habit-forming behavior.
By Larry Mogelonsky, MBA, P. Eng. from new book The Llama is Inn
The Llama is Inn is the fourth anthology book in Larry Mogelonsky’s series following Are You an Ostrich or a Llama? (2012), Llamas Rule (2013) and Hotel Llama (2015). Together, they give a detailed picture of the present hotel business landscape, outlining how to best navigate new technological issues shaping our industry in addition to the need for a perpetual commitment to exceptional service. All four books draw from Larry’s extensive experience in the field as well as the prudence of other senior managers and corporate executives active in the hospitality industry. Offering creative and effective solutions to today’s problems, this collection will give you the tools you need to thrive in the modern hotel world. This book will strengthen your hotel management skills. Individual articles cover sales, marketing, branding channel management and emerging new technologies. Examples of operational excellence in F&B, housekeeping, front desk, reservations and HR are explored. The goal is to enhance learning and practical application to your property. Above all, it is stressed that the success of any property – even with all that has changed in recent years – nonetheless depends on the relationship a hotel fosters with its guests. This is the hotelier’s guidebook that recognizes future developments while celebrating the past.
About the author
After a formal engineering undergraduate degree and an MBA, plus a stint as a professional civil engineer, Larry Mogelonsky’s business career started with a brand management position at Procter & Gamble. This was followed by half-dozen years at a top ten ad agency, where he was the team leader for the Four Seasons Hotels & Resorts business. Smitten with the hospitality ‘bug’, Larry founded LMA Communications and more recently, Hotel Mogel Consulting, a specialty consultancy dedicated to the hotel industry. Today, Larry works with hotel owners and operators across the globe. His knowledge of hospitality marketing and operations has been demonstrated through the accumulation of 75+ awards from HSMAI (Hotel Sales and Marketing Association International). His firm was also awarded the distinction of Worldwide e-Marketing Agency of the Year by TravelClick. Larry regularly contributions to many of the world’s top industry publications. He was recognized as one of the Top 25 Minds in Hospitality. He is also sought after as a keynote speaker at worldwide industry conferences. The Llama is Inn will be available in Spring 2017 through Amazon and Barnes & Noble. A Kindle edition is also available.
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