Is Airbnb Hotelier’s Friend or Foe?
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?
Airbnb over time has lost its host centric edge as it moves into a profit centric mode. Trying to argue that Airbnb is nothing else than another OTA in the landscape should by now be a mute point - acquisition of Hoteltonight, hiking up commission rates "to either pass on to guests or suck it up like you would with OTA's", possible investment in OYO, etc.
Just like other OTA's - the fight is now between OTA's and Airbnb has taken them on as being one of them. This also means that just as in the other battlefield (e.g. Expedia vs. b.com) hotels and hosts have become collateral damage, disposable goods, products on the shelf - either you get with it or you are out.
Overall hoteliers should see for what it is: another OTA in the game that will find ways to benefit from the hotels to drive their own agenda forward that at times has positive, at times negative effects on the hotels.