It is an old truth that one can argue for change but change will only happen when people see a genuine threat to their place in the world. It has long been argued that Airbnb has had the most positive impact on the hotel industry as it has made hoteliers not just adopt better practices but also begin to think more innovatively.
Airbnb now offers more than 8 million places listed for guests to stay, and is creating new partnerships with corporates which challenge traditional hotel markets all the more.
The threat to hotels is legitimate. Airbnb’s bookings increased in 2020/21 by 55%, from 193 million to 300 million. In 2017, the level of bookings stood at 115 million – so by 2022, the overall bookings will have tripled in just five years. In 2021, the business was valued at 113 million. By one estimate, Airbnb is capturing 10-12% of the travel traffic to London, Paris and New York.
Some argue that the challenge from Airbnb is the best thing which could have happened to hotels as it is making hoteliers think more deeply about how they have lost custom to Airbnb and about how to create innovation in hotels.
So what is likely to unfold?
- Hotels will use the Airbnb platform to promote their own properties and rooms. Several hotels in the Hotel Tech Report community have reported that Airbnb is now delivering up to 15% of bookings.
- Hotels are working hard to understand how they can create different experiences. Many are seeking to adopt more creative and unique properties distinctly different from the traditional hotel experience.
- Research suggests that over 70% of consumers still believe that hotels are better value than Airbnb in terms of cleanliess, security and location.
- Privacy is still a major concern when it comes to Airbnb. Hosts too need to feel secure and these are both areas of concern which the company is trying to improve.
A number of forecasters expect to see an exciting five year period to emerge for hoteliers as the industry belatedly responds to the challenge posted by Airbnb. The argument is that, as hotels continued to enjoy strong results and performance, they did not feel concerned by the challenge; however, as Airbnb appealed to guests in the pandemic as hotels struggled, the message finally came home to many; it is now time to think about how hotels can evolve, market themselves and create new offers to appeal to those audiences which naturally look towards Airbnb.
The hotel industry has continually evolved and developed and it will no doubt do so again. It could well be that Airbnb and hotel industry can live well alongside one another as each can prompt the other to improve and be better.