Hotel Brands’ Struggle to Understand Airbnb: The IHG Edition
By Vikram Singh, Global Hospitality & Travel Strategist
When I'm on Twitter, I'm usually catching up on some of my favorite comedians (mostly comediennes) and posting my own material. But every now and then, some non-comedic items capture my attention. This live tweet caught my eye on September 30.
*(Let's get our "release the kraken" jokes out of the way. I bet he hears them a lot.)
Wow. The "Solomons" referred to in the above tweet is not some mid-level manager at IHG trying to shake up the crowds. He is the Big Kahuna/CEO of Intercontinental Hotels Group! At first I could not believe that the CEO of one of the biggest hotel brands in the world would go on stage at their annual conference and say something this ridiculous and detached from reality. Then I realized that he was engaging in the long-standing tradition of hotel brands building up a boogeyman to rally against. I will elaborate on this later.
Solomons' comment also sums up the very reason why hotel brands today are struggling with the reality of the rapidly changing travel landscape. If this is the belief held by those on top, there is very little hope that the brands will manage to stay relevant in the near future.
The Struggle Is Real
Interestingly, IHG is one of the brands I often refer to when speaking about Airbnb and its impact on travel. The ex-CMO of IHG shocked me at a conference three years ago when he did not know what Airbnb was. They now have a new team in place, but the struggle continues.
The fact that the CEO of a company listed on the New York Stock Exchange (aka, Wall Street; aka, the folks who brought us "Greed is Good" is calling Airbnb (unlisted) the product of "Silicon valley greed" is painfully ironic.
The real kicker here is that Richard Solomons' bio comes straight out of the world of investment banking. To quote his Wikipedia page:
"Solomons worked in investment banking with Hill Samuel Bank for seven years, including two years in New York. He worked for seven years in investment banking, based in London and New York. Solomons qualified as a chartered accountant with KPMG in 1985."
Meanwhile, according to Wikipedia, the CEO of Airbnb, Brian Chesky, has a BFA in industrial design from the Rhode Island School of Design. And he was broke when he started Airbnb to make ends meet.
This is usually my "drop the mike and walk away" moment. But since this is not a stage, I will keep writing.
Hey Guys… How's Kimpton Doing?
Brands have been notorious for creating a boogeyman when facing change. The past few years have been all about Online Travel Agents stealing their share. Now they have a new entity to blame for their issues: Airbnb.
IHG's recent acquisition of Kimpton, which I wrote about here, is playing very much in line with my prediction. The brand that took years to build is succumbing to the giant shadow its new owner is casting. Case in point, the loss of key landmark Kimpton assets in San Francisco:
Kimpton's single largest market was San Francisco, and they have now lost more than 75% of their presence. This is a much bigger threat to Kimpton than Airbnb and OTA's put together.
So many of these iconic assets are getting renamed, losing the brand recognition that Kimpton employees built over so many years. I really hope Keane played "How to Save a Life Brand" at the IHG show.
Hotel brand annual shows are squarely focused on hyping the brand, and that is understandable. What is not acceptable is to misinform your franchisees and owners about where the business of hospitality is heading. They are hungry for education and knowledge, not just their Pancake Selfies at the "Stack Station." Google it.
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