Experiences are deeply rooted in travel

Hospitality headlines: the massive growth of Airbnb and what it means for hoteliers

Airbnb is big in media, sweeping the airwaves and grabbing a huge share of attention across the web. But one topic in particular is close to home for hoteliers—a new Morgan Stanley report on their incredible growth from 2016 into the new year. It’s hit every news outlet in the hospitality sector and beyond, from Skift, to Tnooz, to Bloomberg.

According to the new report, Airbnb currently holds about 18–19% market penetration in the accommodation sector (up from 12% last year,) and is expected to grow to 23-25% over the course of the year. It’s being felt in both leisure and corporate travel, with nearly a fifth of both types being hosted by an Airbnb member.

The bottom line, hoteliers are feeling the pressure. But what else? OTAs aren’t. Tnooz reports that according to Morgan Stanley, almost half of respondents shifted stays away from traditional hotels, with the same outlook on the horizon for 2017.

What’s interesting is that this is a decidedly different message than the same Morgan Stanley report on Airbnb a year prior stating that, “we don’t see Airbnb materially impacting the hotel industry,” and, “Airbnb’s threat to the OTAs is larger and multifaceted.”

So why is the demand for Airbnb coming out of the pockets of hotels and not online travel agencies? OTAs have the tech and capital to keep up.

OTAs have big marketing budgets to compete for travelers’ attention at the moment of booking.

Add to this the ability to grow and develop their own alternative accommodations, and the OTAs are ready.

Take Expedia. In 2015, Expedia paid $3.9 billion for HomeAway, an Airbnb-like home rental platform, and in the same year also purchased Orbitz. In all, Expedia reported revenue increasing 33% last quarter.

Hoteliers have a competitive edge

The good news is that hoteliers can compete with Airbnb and OTAs. Here are some tips hoteliers should consider for regaining the attention of travelers making the switch to alternative accommodations.

  • Be the local expert. Travel has always been deeply rooted in experiences. Who better to guide the local experience that your hotel is a part of than your team on the ground? Use your onsite employees for perspective when communicating with guests. Plus, develop close partnerships with local businesses to offer guests unique experiences that satisfy their curiosity to explore new places.
  • Make your communication personal. Travelers have been pelted with marketing jargon—so much so that many are tuning it out. Hospitality thrives because of the personal relationships hosts build with their guests. Bring your staff to light. Make the communication in your digital experience the same level of personalized service you provide on site.
  • Compete for travelers’ attention long before they’re ready to book. Travel decisions start well before a person is ready to buy, yet there’s a huge amount of advertising effort (and dollars) spent here. Use this as an opportunity to target inspiring content to travelers long before it’s time to purchase. The inspiration and discovery phases are a prime opportunity to make an impression and hook future travelers.

Airbnb is here to stay. But hotels still have their own competitive edge. It’s important for hoteliers to play up those strengths and build on the personal relationships that define hospitality.

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Published by

Hunter Garrett

Content Strategist for Flip.to. With roots in photography and film, Hunter got his start in content strategy for the Discovery Channel. It's been love at first sight ever since. With a relentless desire to learn new things, you might catch him nerding out on just about anything, or pondering life's toughest questions like, "How come abbreviated is such a long word?"