There’s a new nemesis to the hotel industry and they are rapidly growing, if you haven’t heard by now, Airbnb has hoteliers flustered over the impact they’ve made in only 7 years.
Over the past two years alone, the company’s value has risen over $20 Billion. As more people learn about Airbnb, hotels scramble to keep their hold on the industry.
Below is some information about the impact of Airbnb on hotels and how independent hotels can compete.
The Airbnb Side
Airbnb seemed to have come out of nowhere over the past couple years. The idea for the company was conceived when two San Francisco roommates turned the living room in their loft to a bed and breakfast in order to pay rent.
Their name is a reference to the air mattresses that they let their guests sleep on. Half billions of dollars and millions of users later, Airbnb has established itself as a fierce potential competitor to the hotel industry. Their main goal is to offer a cheaper, more personal alternative to paying for hotels.
One of the things that sets Airbnb apart from other bed and breakfasts is that it is a completely peer-to-peer service. This means that the actual homeowner is in charge of running their property. You also have access to whatever amenities the homeowner has provided as if you were at your own home. It takes ‘make yourself at home’ to a another level.
Interesting Airbnb Facts & Stats:
- Number of users- 50 Million (source)
- Active in 57,000 cities/ 150 Countries (source)
- 3rd most valuable private startup at a $24 Billion valuation (source)
- 74% of Airbnb are properties outside of main hotel districts (source)
The Hotel Side
Airbnb’s success hasn’t had much of an affect on the hotel industry financially, but at the rate it’s progressing, the company can become one of the hotel industry’s biggest nightmares in the lodging industry.
Hotels currently hold an advantage since, as of 2015, less than 20% of people know about Airbnb. Airbnb is still new, so they’ll still have a hard time competing with established hotel brands that consumers trust.
One of the biggest setbacks for Airbnb are the various bans, regulations, and laws prohibiting short-term rental locations. These regulations don’t affect hotels which allows them to book rooms freely.
Though Airbnb is making a lot of headway, the hotel industry has more consumer trust, government support, and a larger consumer base that allows it to control the market.
Interesting Hotel Facts and Stats
- Global hotel industry total revenue (source)
- Hotel advertising spending is 19% of all online ad spending (source)
- $26.14 Billion worth of travel sales are made through smartphones or tablets (source)
How Independent Hotels can Compete
In this lodging industry war, independent hotels have it the toughest: not only do they have to compete with Airbnb, they also have to deal with larger hotel chains and OTA’s. There are still some advantages that independent hotels have and some things hoteliers can do to stay afloat in the competition.
As mentioned above, most Airbnb properties are outside of main hotel districts. That means that people who want to be in the center of the action are more likely to look for hotels located near attractions and popular locations.
When you roll out your digital marketing campaign, be sure to include posts about upcoming events and fun things to do in the area. Hoteliers can also use the inverse of this to their advantage.
According to an Airbnb study, 91% of travelers that use their site want to “live like a local.” The users of Airbnb most likely consider themselves travelers and not tourists. To target this audience, hoteliers should create content that mentions hidden gems and local favorites like restaurants, parks, and bars.
One of the biggest advantages that Airbnb possesses is their low prices. Hotel deals and specials with extra perks or reduced prices are sure to keep your hotel competitive.
Airbnb is making waves and it will be interesting to see how the whole lodging industry readjusts due to their impact. Independent hotels don’t have to get lost in the madness. Research your competition, see what they do that works, see how they’ve failed, and try to stay ahead of the competitive curve.