April 13 2015

Is Airbnb Affecting Hotel Guest Loyalty?

Airbnb is the world’s largest lodging provider; they boast listings in over 192 countries and 30,000 cities worldwide. Granted, the company does not have to worry about high employee turnover rate, or real estate prices – but their growth since 2008 has been astronomical. Joe Gebbia (who at the time was having difficulty paying rent) combined the Internet, a few air mattresses, and some upcoming conferences in his city, and everything changed. Gebbia and his roommate now have a business worth about $20 billion, and the traveling industry has seen some pretty epic market disruption.

So far, there’s no real evidence that Airbnb has had an affect on the luxury hotel industry. Customers that frequent major hotel chains are luxury and business travellers. Currently Airbnb does not have the same clientele – their rentals have been for consumers with lower budgets and different expectations. However, that’s changing as the company grows into wealthier properties and cities.

Obviously, there is a difference between hotels and Airbnb. The experiences are on different ends of the spectrum.

When a customer books a reputable hotel, they know what they’re getting: cleanliness, comfort, amenities, and a host of services. Airbnb is more of a grab bag; you’re staying at a stranger’s house. Nothing is guaranteed. However, whatever they lack in consistency, they make up for in authenticity and cheap lodging. Guests who strive to dwell and mingle with the locals can, and they can do it for cheap.

Hotels can learn a lot from Airbnb, and vice versa. Hotels need to do a better job creating an authentic experience for guests that are travelling to a desired city as tourists to maintain hotel guest loyalty. Some hotels are already taking hints from Airbnb’s success. The New York Hilton in Midtown recently opened unique eating establishments that celebrate local fare. Twin Tier Hospitality which operates a Comfort Inn on the Upper West Side, is re-launching the space as a boutique hotel whose floors represent different subway lines – and yes, those rooms also come with free MetroCards and Brooklyn ice cream.

On the other side of the coin, the growth of Airbnb has birthed a growing army of entrepreneurs who aim to solve the problems Airbnb has with consistency. These inconsistencies are often the reason people choose hotels. These new companies are standardizing the room experience; offering cleaning services, key exchange, and even physical concierge desks in designated neighborhoods. So how does technology play into all this? Well…here’s an interesting quote from hotelmarketing.com:

“It’s about rethinking the experiences. Millennials aren’t simply a technology generation that salivates over technology for its own sake. When millennials talk about Airbnb, do they talk about the booking process? No, they talk about the unique accommodations. When they talk about Uber, do they talk about the app experience? No, they talk about how great it is to not have to physically call or wave down a cab. Both brands rely on technology, sure, but technology is not the story. Technology is simply the enabler of new experiences. “ –

Modernization is not just about technology. It’s not enough to permit guests to check in with a phone, or having a website with large amounts of peer-to-peer data. It’s about realizing that people want a customized experience, one that is unique and original. The smartest thing the travel industry can do is use whatever tools and resources available to make sure whatever experience they create for their guests is a memorable one.

By Ronnie Coleman Sales Executive at StayNTouch, Inc.