Hoteliers taking notice of Airbnb, leaders say
16 SEPTEMBER 2014 7:40 AM
As the popularity of sharing-economy accommodations companies increases, the hotel industry has to make up for lost time and improve its appeal to travelers, speakers said.
AUSTIN, Texas—Hoteliers are opening their eyes to the appeal sharing-economy accommodations companies such as Airbnb has for consumers. Hotel executives speaking during last week’s International Society of Hospitality Consultants annual conference said there’s one solution that will help hoteliers fend off the emerging online accommodators: good, old-fashioned hospitality.
“We have a lot to do in our industry to compete with this,” said Niki Leondakis, CEO of Commune Hotels & Resorts. “The opportunities lie within how we can do better. … Make sure the things they get at hotels aren’t available at a home stay.”
Eric Danziger, president and CEO of New York-based Hampshire Hotels Management, echoed Leondakis’ thoughts.
“What feels like a conflict is the experience,” Danziger said. “People should have an experience when they travel that makes them feel that they aren’t in their home. It’s strange to me that they’re so successful. You’re trading your home for another home.”
Making guests feel at home while providing a unique experience is the challenge hoteliers must conquer, according to Leondakis.
“It puts a big burden on (the hotel industry) to provide hospitality,” she said, adding that sharing-economy entities such as Airbnb can’t provide the high-touch, hospitality-oriented and problem-solving solutions that hoteliers can provide. “If we don’t focus what we are going to do to differentiate, it can become the next (online travel agency).”
The leaders cited the emergence of OTAs in the early 2000s as a history lesson the hotel industry better not forget as it deals with the increasing presence of sharing-economy accommodations companies.
“It will take a big chunk out of our business if we let it,” Leondakis said. “How do we compete; how do we not let Airbnb become the next OTA?”
“It’s definitely a threat,” Danziger said. “Our industry created the OTA opportunity and what it is.”
It’s more than just rate
Leondakis said the hotel industry can’t resort to competing with Airbnb on rate alone, like it did in the early days of OTAs.
“Hold on to rate integrity and compete on experience,” she said. “We can win on experience.”
Jim Abrahamson, CEO of Interstate Hotels & Resorts, said the Airbnb epicenter is New York City, where there are 40,000 sharing-economy units. That the market exists at all is puzzling because New York law prohibits anyone other than a licensed hotel operator from renting a room for fewer than 30 days. But he said those accommodations can provide a unique slice of local neighborhood flavor.
“At the end of the day, they’re illegal hotels in New York,” Abrahamson said. “The fact of the matter is … somebody is staying in them and they’re staying there for a reason. It’s not just price. There’s an experience element that people are trading into.”
Tom Corcoran, chairman of FelCor Lodging Trust, said Airbnb exists because the hotel industry “screwed up” by charging outrageous prices for Internet access, roomservice and other amenities—which is forcing consumers to find alternative accommodations.
“We have done a very poor job of taking care of customers,” Corcoran said. “We think we have them captured. As an industry we always lag where the customer is going.”
That’s something the industry needs to work on if it wants to keep the upstart sharing-economy accommodations industry at bay, according to Danziger.
“It’s really important that we invest in things the consumer wants instead of the things the company wants to give them as a brand standard,” he said.
Curating stays at hotels is also an important element—and that’s not always easy in an industry that seems continuously to be trailing in technological advances, according to the leaders.
“(Travelers) should know who we are, (but) the technology component is severely lacking in our business,” Abrahamson said.
“We have to tell our stories, create our content,” Leondakis said. “The traveler will always find the OTA or Airbnb ahead of us because they are investing in the technology.”
Abrahamson said social media outlets are holding the hotel industry accountable like never before, so it’s important to make sure the stays are more personal than ever.
“You cannot generalize; there is a customer that doesn’t want all the bells and whistles,” Leondakis said. “And there’s a customer that will always want roomservice, a concierge.”
Corcoran said the biggest question mark will come if overnight, short-term guests begin choosing companies such as Airbnb to provide their accommodations instead of hotels.
“The (hotel) industry needs to educate the world that there is a big difference in what each of them offer,” he said.