After the recent acquisition of HotelTonight, If there were any doubt as to Airbnb's true intentions of entering the OTA space and start aggressively competing with online travel agency giants such as Booking Holdings and Expedia, they need to be laid to rest immediately.

The industry has conflicting views of the role Airbnb plays and will play in hotel distribution. Some hoteliers believe that Airbnb is not an ordinary OTA since it "hijacks" travel demand and diverts traditional hotel guest to private accommodations. Airbnb has already "hijacked" 10%-15% of the travel demand in many major metropolitan areas and leisure destinations such as New York City, Paris, and London. This affects negatively overall occupancy and hotel room pricing and hoteliers are unable to raise ADRs in periods of traditional peak demand. According to Morgan Stanley Research, 50% of survey respondents in the US, UK, France, and Germany reported that they booked an Airbnb in place of a traditional hotel. In other words, Airbnb is diverting traditional hotel guests to private accommodations.

Other hoteliers welcome the entry of Airbnb in the hotel distribution mix, since they believe Airbnb adds another option to the existing duopoly of Booking Holdings and Expedia.

What is your take on the subject?

Alan Young
Alan Young
Strategist

Airbnb's mission is to live in the world where one day you can feel like you're home anywhere & not in a home, but truly home, where you belong. Their mission is to make a home anywhere in the world for people who live outside their home and still feel like they are at home.

Airbnb's mission statement above creates a sense of belonging and so from a hoteliers perspective, if they can create this type of emotional response from those who use Airbnb, they should definitively be seen as a foe. Irrespective of the distribution angle that has many hoteliers feeling wary and extremely  vulnerable, it is the essence of how Airbnb is trying to differentiate itself from the hotel industry that should create the greatest amount of fear for your average GM. 

Travelers will gravitate to where they feel most comfortable when it comes to the lodging experience and even though Airbnb has been disruptive both on the experiential and distribution front, it is imperative that there is an enemy that forces you to "up your game". Hopefully Airbnb is that true foe that forces the hotel industry to deliver better service, product offerings and choice.

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