Online travel agencies are expanding their vacation rental inventory after Airbnb started offering OTA-like services. Hoteliers should take note and see when and where they can make a move.
It’s happening: the battle between Airbnb and online travel agencies.
The Wall Street Journal reported earlier this week that OTAs such as Expedia and the Priceline Group are muscling in on alternative accommodations, increasing the number of vacation rental units they offer through their websites.
Just about a month ago, I wrote about how Airbnb was moving into OTA territory with its “Trips” feature that offers guided tours or “other adventures” to guests seeking unique experiences in the cities where they’re staying.
Although I’m sure both moves were in development for quite some time before they were announced, it feels a little bit like a punch and counterpunch. Regardless, it demonstrates two things: There’s no love lost between the two as each pursue their own business agenda, and OTAs are showing themselves as more comfortable in the alternative-accommodations space.
All the more reason for hoteliers to act and side with the sharing economy before the lines are drawn too deeply, or the OTAs decide they’re really comfortable in this space and try to make a bid for one of the alternative-accommodation companies.
From the consumer perspective, the OTAs operate similarly to the alternative-accommodations websites. Neither owns any of the rooms/units/homes being rented out; instead, they’re just posting what’s available where, when and at what price. The consumer pays for the stay, and a portion of the money goes to the owner of the website while the rest goes to the owner of the hotel/home.
It’s tough to say whether hosts of rental units would stick around if Expedia bought or partnered with a company such as Airbnb. Would the commission amount change at all? The hosts aren’t organized, so they lack scale and leverage during negotiations—if, in fact, there even are negotiations.
The OTA would have to get used to sudden changes in inventory when hosts decided to put their units on the market and later take them off based on market demand, ability to host or simply not feeling like putting up with guests for whatever reason. That’s already going to happen now that the websites are hosting their own listings. It won’t take long before the OTAs have figured out a way to manage inventory that way, if they haven’t already.
That’s all the more reason to act now. Look at AccorHotels: It’s expanded its footprint in the sharing economy by bundling up three of its acquisitions under Onefinestay. This is a hotel company that is more than dipping a toe into the water. Maybe it hasn’t plunged headfirst yet, but it’s certainly feeling more comfortable in the space. Other hotel companies should follow suit.
My point to all of this is, don’t just sit idly by on the sidelines while the scuffle between the OTAs and sharing economy plays out before you. Become a player in this. Take advantage of whatever strife exists at this moment and try to become at least a partner with those in the sharing economy. It’s not going anywhere.
Everyone in the hotel industry is seeking to create or at least be part of that authentic local experience so many guests are seeking now. Companies such as Airbnb can help guide the way. Join up with them before the OTAs decide they really want to get into the sharing economy and start shopping around.
As you can see, my tune has changed slightly about the possible relationships between OTAs and the sharing economy given the recent development. Have your views changed at all? Let me know. Leave a comment below or contact me at firstname.lastname@example.org or at @HNN_Bryan.
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