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?

Daniel E. Craig
Daniel E. Craig
Founder, Reknown

Make no mistake, Airbnb is not a hotelier's friend. A potential distribution partner, perhaps, but if the company's dealings to date with local governments and the hotel industry are any indication, relationships between hotels and Airbnb will be as contentious and codependent as relationships between hotels and OTAs.

In a recent Wired article, a source referred to Airbnb's tactics with local governments regarding tax, zoning and safety regulations as “a city-by-city, block-by-block guerrilla war.” That doesn't sound like the type of friend the hotel industry needs.

A competitor to OTAs would be more welcome if it were to create new demand for hotel rooms, but the opposite is true of Airbnb. A substantial proportion of the 500 million+ guests Airbnb has hosted since 2008 would otherwise have stayed in hotels.

When negotiating a distribution partnership with Airbnb, hotels should be careful not to repeat the same mistakes as when OTAs first came on the scene. This means retaining control of your brand trademarks, inventory, rates and guest relationships. 

View all 14 views in this viewpoint