By Linchi Kwok
Entering 2018, Airbnb will soon celebrate the company's 10th anniversary. The company has now turned into one giant service provider in the lodging industry.
Today, Airbnb has already served more than 200 million travelers in more than 65,000 cities around the world. With a supply of more than 3 million listings, Airbnb has more available "rooms" than any hotel chain in the world. It was inevitable that Airbnb would make a significant negative impact on hotels due to its increasing supply and the low entry costs for Airbnb operators.
- More hotel chains are entering the short-term residential rental business. For example, Hyatt just reached an agreement with The Oasis Collection, allowing travelers to book "handpicked" homes that meet hotel standards. Earlier, Wyndham also purchased Love Home Swap, a startup that allows people to swap homes.
- Hotels are developing new brands that could possibly meet different needs from various travelers, including those who usually favor Airbnb over hotels. Marriott, for instance, opened several Moxy Hotels in the market, which is considered by the company as the product that can fight against Airbnb.
- Hotels are pushing legislators to impose stricter regulations on room-sharing operators.
- Other makeovers of hotels' existing products/services include: luring customers to book direct on the hotels' website with guarantee the lowest price in the market, as well as reinventing their loyalty programs, aiming to attraction new customers and at the same time, keeping their existing customers happy.
- Airbnb is ready to enter the real estate market, contrary to the "asset-light" strategy adopted by hotels. A few weeks ago, Airbnb just made an announcement that the company was going to invest $200 million in the company's branded apartment project in cities across the U.S. Tenants in these apartments will have the permission to rent their place on Airbnb for up to 180 days a year; they would then share a portion of the revenue they make with the landlord. The apartment complexes will also be built with "Airbnb-friendly" designs, such as keyless entry and shared common areas.
- Airbnb wants to become a full-service travel company after acquiring several other travel service companies.
- Airbnb is actively improving its products for business travelers. Airbnb not only launched a website that tailors to business travelers but also provides clear guidelines to hosts, helping them make their listings "business-traveler-ready."
- Other services that Airbnb is working on include: development of a gadget that will provide reliable internet connections to travelers, as well as fighting back against the lodging industry and the lawsuits against the company.
What can we expect in 2018?
I wish I had a crystal ball in my hands, but I believe it would be frightening for hoteliers when Airbnb begins putting listings into categories based on the service and amenities provided.
Imagine what would happen when Airbnb's 3 million listings are being labeled with distinguishable "brands" in their own categories, as what clear branding would do to hotels. What about when Airbnb hosts are trained as professional operators who can manage their listings as effectively and efficiently as hotels?
Yet what concerns me the most is the attitudes held by some hotel leaders who, for whatever reason, have never stayed in an Airbnb before. As an old Chinese proverb says, "Know your enemy and yourself, win every battle."
I am urging every hotelier to add one more item to the list of their New Year's resolutions: Give Airbnb a trial if you have not done so yet.
Reprinted with permission from Multibriefs