Airbnb And The Hotel Industry

Can Traditional Hotels Compete with Airbnb? - By John Hendrie

Airbnb reported that on July 5, 2014 in Paris almost 20,000 guests stayed at their member properties. One might surmise that the price point for those accommodations were a bit lower than the usual room price for the many hotels in the city of love. Maybe, the youth hostels could compete on price.

LRA Worldwide Airbnb reported that on July 5, 2014 in Paris almost 20,000 guests stayed at their member properties.  One might surmise that the price point for those accommodations were a bit lower than the usual room price for the many hotels in the city of love.  Maybe, the youth hostels could compete on price.

What are these Airbnb guests looking for, other than a great price?  It begins with something different, engaging, and real.  Give me some adventure to tingle my senses.  Plus, I like the warm contact with my Host of the premises, who can also, for example, arrange my pick-up at the airport and plan a full agenda of activities in the community – really, anything I want to do. 

Getting back to that recent fateful July 5 day in Paris, just imagine the lost room revenue for the hotels.  Some would say “just desserts” to an over-priced commodity; others might be less sanguine and express a sigh of loss – the lodging industry simply did not keep apace of the consumer.  The industry, just like Airbnb and similar services, is under fire around the world as it comes to grips with the sharing economy and changing zeitgeist.  What will shake-out?

No doubt, Airbnb has carved out a significant slice of typical lodging patrons, namely the casual traveler and vacationer.  Hotels can still serve the executive and business minions, high-end clientele and the meetings and convention folks. Those guests want services at hand and immediately.  It is more the “us” trade rather than the “me” segment of the business.  Unless I want to hold my annual meeting in a yurt, this hotel decision is probably a given.

But, Airbnb has several advantages, beyond price.  They offer a different experience with all sorts and types of accommodations and locations.  Hotels have the four walls, enhanced with amenities - admittedly, an experience for some along with a sense of security (no surprises). Can that be enough though? 

A further advantage for Airbnb really goes back to the history of lodgings, where the innkeeper actually greeted and personally cared for his guests.  Current Bed and Breakfast proprietors have this advantage.  One might opine when was the last time a hotel general manager or his/her senior staff escorted a guest to the assigned room, explained the room features, suggested property services and restaurants,  and, upon departure, thanked them personally for their business.  Hmm – think about that one! 

The concierge service is already a prime feature within hotels (and outside, too).  Airbnb hosts serve this function, as well, with a very personalized touch, offering “collaterals” you would not find at a hotel.  Perhaps, our hotel concierge should have an expanded role.  Providing that there is sufficient guest history, a full “guest stay plan” could be implemented for those who do want a bit of adventure to tantalize the senses and make memories.

There will still be a good amount of push and pull in the lodging sector.  Companies like Airbnb still need to come to terms with local laws, taxes and zoning and building restrictions in almost every world-wide community they serve.  But, the marketplace and consumer expectations have significantly changed. Plus, world citizens are making some extra money on that spare bedroom.  Even the fast food industry has moved forward.  Burger King is scrapping its 40-year-old "Have It Your Way" slogan in favor of the more personal "Be Your Way”.  The message is very real, and the lodging industry will need to study the differentials and then market accordingly. 

 

LRA LogoJohn Hendrie is the author of the LRA blog, focusing on anything and everything about customer experience. LRA Worldwide is the leading global provider of Customer Experience Measurement services for multinational companies with complex customer interactions. For over 30 years, LRA’s innovative brand standards audits, quality assurance inspections, mystery shopping programs, research, and consulting services have helped ensure our clients deliver consistent, memorable, and differentiated experiences to their customers. Many of the world's preeminent global hospitality brands, as well as companies in the gaming, dining, healthcare, sports and entertainment, real estate, retail and travel industries choose LRA to help them measure and improve the customer experience.  For more information, visit www.LRAWorldwide.com.



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