Will Marriott Make A Dent In Home Sharing?
By Larry Mogelonsky, Managing Director Hotel Mogel Consulting Limited
Marriott's entrance into the home-sharing signifies far more than just an acknowledgment of their mainstream acceptance. Yes, alternate lodging providers are here to stay, but when the big chains get involved, it should be taken with a slight sense of panic on their part that they are missing out on one of the biggest hospitality gold rushes to date. Home sharing may indeed come to dwarf traditional hotels in both total rooms as well as profits.
But can Marriott pull it off? This isn't the early aughts; home-sharing already has quite a few established players, primarily Airbnb whose platform (both for guests and hosts) is ostensibly the best in all of the hospitality industry. To ape one of my favorite spaghetti westerns (yes, I'm that old), let's look at the good, the bad and the ugly of this strategic move.
Encouragingly, the launch is a positive one for loyal Marriott customers. Bonvoy users will now have more ways to spend those rapidly-accumulating points on unique vacation spots. And, for those Marriott customers who think Marriott first (to build their point base), I am sure that they will love these new destinations' product availability.
So, maybe this launch is fundamentally a defensive play, protecting Marriott's loyalty base from gradual erosion by home-sharing incumbents. Along these lines, it's also a strong value-add for millennials and centennials who are just starting to spend on accommodations and consider committing to a loyalty program. In these two ways, the inventory addition may indeed be quite successful.
It will be interesting to see if hotel owners who have Marriott-branded franchises feel the same way when these alternate lodging listings start to cannibalize their customers. While the market has largely buoyed the attritive effects from the sharing economy because there's enough mullah for everyone, the overall shift in customer behavior is a harbinger of dark times. Particularly amongst the younger generations, home-sharing accommodations are seen as cheaper than traditional hotels, so when money is tight where will people look to book?
Another unforeseen yet related consequence of Marriott's involvement is a further legitimization of the home-sharing accommodation market segment. Those luddites who were loyal Marriott stalwarts will now have a low-risk way of testing these waters, thereby further catalyzing the customer acceptance rate of home-sharing. Think of it as a gateway drug; once they've taken the small leap of using their loyalty points to sample a home-sharing product on Marriott's system, it's significantly easier to sway them over to Airbnb's accommodations search engine for subsequent trips.
Wake up hoteliers; this move is not going to stop Airbnb's growth as it will only serve to broaden its acceptance across all age groups and also hamper any legislation aimed at leveling the playing field. Almost as a form of synergistic advertising, Airbnb has already become so ingrained in our vocabulary that we use its trademark interchangeably with any home-sharing.
Marriott may just be too late to the game! For my mind, you'd be better to enter into a partnership with Airbnb and put your all your inventory into the Airbnb booking engine. At least that way you would get some younger eyeballs on your traditional inventory.
And on the legislation front, the root challenge to conversions to short-term rentals is not just coming from traditional hotel lobbies but also from real estate concerns over a dwindling supply of affordable housing. Marriott's move here could be viewed as acquiescence and the removal of a chief player towards measures that protect those of lower to modest incomes from egregious long-term rental costs.