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Airbnb

Opinion: How can the hotel industry keep up with the innovations of Airbnb?

498 497 Katy Phillips

Airbnb is well covered on Hotel Designs. Here, Nakul Sharma, CEO and Founder of Hostmaker shares his thoughts on the online marketplace and hospitality service.

In the hospitality industry, we are seeing more people looking for stylish yet affordable places to stay when on holiday. Airbnb has exploded in popularity in recent years, with the latest Airbnb data revealing a sharp rise in the number of bookings around Windsor for the royal wedding of 1,438%. The increase in popularity of homestays and the innovation in the sector has put increasing pressure on traditional hotels to keep up with modern demand.

Homestays increasing in popularity

In recent years, Airbnb and homestay platforms have become increasingly popular and expanded their appeal to a huge variety of people. Having previously been perceived as cheap alternatives to hotels, Airbnb was previously the reserve of the student traveller.

But following the recent launch of Airbnb Plus and existing companies like Hostmaker, we are seeing an increase in demand from consumers looking for bespoke and boutique homestays with a certain ‘wow’ factor. These custom designed and curated properties are bringing a new offering to the hospitality market.

An increase in trust around the sharing economy in general, as well as the increase in the level of quality has seen a growing number of bookings and inspired many to offer their homes as boutique homestays to guests. The growth in demand and supply has led a large rise in the number of lets.

How homestay companies like Airbnb are challenging traditional hotels

Homestays are now beginning to challenge traditional hoteliers as hosts offer more luxurious properties and experiences at affordable price points.

Guests are also looking for unique experiences that can offer them an insight into the life and culture of the country they are visiting. The huge variety in the types of accommodation offered to guests bring both unique experiences and the chance to live like a local. With everything from traditional townhouses to luxury treehouses, guests have a huge variety of places to stay. This range of opportunities is something we have seen traditional hotels struggle with in the past.

A lot of tourists choose hotels due to the perceived luxury service and also because of the knowledge that they can come and go as they please. We are now seeing hosts and homestay management companies curating apartments and offering guests total peace of mind by providing luxury experiences that you would expect to find in a hotel, such as airport pickup and key drop-off.

What does this mean for the hotel industry?

The increase in popularity of homestay platforms does not mean that hotels will cease to exist. Hotels still appeal to people in a way that homestays are not able to. For short stays of up to 2-3 nights, hotels will outperform homestays on price and suitability. But for longer trips, homestays provide both business and leisure travellers with greater flexibility, range of locations and type of property.

Having worked in both the traditional hospitality industry and the property sharing sector, Nakul believes that these two seemingly competing industries are actually more compatible than first glance might suggest. They offer different aspects to a guest’s stay which may or may not appeal depending on the audience.

How hotels can to adapt their offering to remain competitive

Nakul expects to see hotels adapting to remain competitive and cater to guests wanting a luxury homestay experience. By moving into the homestay market, hotels will be able to use their hospitality expertise to help provide luxury 5-star levels of service within a homestay experience.

Indeed, we are increasingly seeing hotels curating homestays to bring the luxury hotel experience to properties. Hotels need to continue to embrace the increasing demand for high quality homestays and use their hospitality expertise to remain ahead of current trends in the market.

At present, homestays simply don’t have the capacity to take a lot of business away from hotels and in many guests’ minds, hotels still offer a level of security and quality that homestays cannot. However, the growing demand for homestay properties is clearly in the minds of hotels, as see more of them looking to move into the homestay market as it continues to grow.

Opinion: Hotels will never go out of fashion and Airbnb are in on the secret

560 383 Adam Bloodworth

For years, Airbnb heralded the ultimate in boutique experiences. Giving guests access to other people’s homes, the company’s humble and genuinely pioneering service had wings. It spread so quickly that “Airbnb” became a verb. Much like Hoover, people say, “Let’s Airbnb it”.

However, a raft of changes recently announced – the first major changes to the brand in years – may redefine Airbnb forever. The possibility of staying in, and poking around, other people’s private homes is still there, but now the firm is expanding into the luxury sector, and making their appeal more broad by introducing stand-alone hotel bookings, and a highly regulated Airbnb Plus scheme. The scheme will appeal to a new type of guest that demands quality checks and regulations before they’ll stay in someone else’s house.

There’s the argument that in diversifying, Airbnb will lose the essence of their brand itself. Now that the straightforward thrill of having another’s home isn’t their USP. Now their USP is ‘hotel bookings’, really. Commercially, perhaps, it makes sense. But now that we’re being told guests demand personalised, authentic experiences more than ever, why are Airbnb listing hotels?

There’s two reasons. One, dry, the other, moreish and fascinating.

Dry bit first. Reports say global bodies are becoming increasingly irked at the lack of regulation on Airbnb. Both in terms of their prices, which undercut hotels, and in terms of the legal nature of renting another’s home. There has been cases of individuals renting sub-let properties illegally, without the landlords’ consent, and of houses not meeting basic health and safety standards.

It’s an issue which has rubbed the American Hotel And Lodging Association up the wrong way. “Airbnb… needs to be regulated, taxed and subject to the same safety compliances and oversight that law-abiding hotel companies adhere to each and every day,” insists Troy Flanagan from the association.

Sliding closer to the hotel format is the obvious way for Airbnb to step up their quality control, minimising risk.

Then there’s the case for hotels. Despite the earful consumers are getting about how we all adore personalised, boutique experiences (booking the Airbnb ‘Experiences’, staying in treehouses, not Radissons, or in “poverty hotels” in an Indian slum, rather than Marriott’s) there is much new evidence that suggests consumers retain their brand loyalty to large hotel chains.

Maybe we’re not all so Airbnb’d yet. End-of-year trend reports from 2017 boasted huge growth for the multi-national hotel groups. Hilton opened more than one hotel a day in 2017. Marriott are set to “grow their luxury footprint” as they roll out 40 new luxury hotels, asap.

Airbnb CEO Brian Chesky (Picture: Getty Images)

It’s not that guests have become more basic – hotel groups have been modernising and becoming more boutique, taking the Airbnb bull by the horns. Hilton’s Canopy by Hilton rooms, soon to open in London with bespoke in-room artwork by independent suppliers Dais Contemporary, are just one example of how giant hotel groups are pushing boundaries and distancing themselves from being seen as providing anonymous hotel experiences.

And Marriott Global Brand Officer Tina Edmunson has written a statement insisting Marriott’s luxury expansion understands the “global shift in perception around luxury”. “We are uniquely positioned to provide personalised and truly differentiated experiences that resonate with this next generation jetsetter,” she said.

Hilton and Marriott’s successes will be music to Airbnb’s ears as they expand into the hotel sector.

Airbnb news

Airbnb make giant shift away from humble roots to include more luxury hotels with more regulation

560 412 Adam Bloodworth

Airbnb have unveiled their biggest set of changes so far, as the startup shift further from their humble house sharing roots.

New changes include the further integration of luxury hotels and properties, which now have their own dedicated section, and further regulation of private homes. Regulation will broadly appeal to more high-net-worth travellers who seek the same level of service at a private home as they’d expect at a hotel.

Much like their Superhost programme, Airbnb have now also introduced ‘Superguest’; a loyalty scheme which will seek to retain frequent users with discounts, and added perks including flight upgrades and VIP lounge access.

A shift away from the company’s humble roots

The Superguest feature is a membership scheme of sorts, an extension of the platform’s Experiences, which further signifies a push toward luxury for the once boutique private home share facility.

Additionally, Airbnb Plus and Beyond by Airbnb have been designed to appeal to new users who wouldn’t typically find staying in a private home appealing.

Airbnb Plus is Airbnb, but regulated. The service will see the top homes inspected by Airbnb and kept in-keeping with brand standards, for things like cleanliness and comfort.

The Airbnb Plus hosts and guests will be privy to a dedicated support team.

Hotels now have their own devoted area on Airbnb

The dedicated area for boutique hotels, and for hotel rooms, marks a distinct divide between the startup’s traditional offering of private stays, and the more conventional hotel booking element.

Airbnb Collections will group hotels in particular categories according to their function; for instance there will be a Honeymoon category and a ‘Uniques’ category for treehouses, boats, igloos and suchlike.

“Airbnb was designed for when we were much smaller,” was the message from Brian Chesky, Airbnb CEO at a platform event in San Francisco made to launch the changes.

The push toward a more conventional hotel booking market is twofold. Increasingly, Airbnb territories, including the US, are clamping down on regulation of private stays, and on illegally sub-let rooms.

Reports also claim Airbnb’s new hotels wing is significantly undercutting their direct competitors in the hotel trade, including Hotels.com and Booking.com.

For the full report on the latest changes from Airbnb, view the company’s website 

Altovita

Airbnb rival Altovita could be set for London

937 606 Daniel Fountain

The rental site Altovita emerging as a competitor to Airbnb could be making its way to London next year, after getting the green light to operate in eastern Europe.

The short-term holiday rental site was launched in July and has already expanded to more than 200 listings across Prague, Budapest, Vienna and Warsaw with a USP that means all properties have been personally inspected and given quality ratings by its staff.

Now the site has been given the stamp of approval in Eastern Europe, with co-founder Alison Ip saying there are another ‘100 or so’ listings in the pipeline, with the ambition to reach 500 by the first quarter of 2018.

The company is headquartered in London and says that the UK capital is in its ‘expansion plans’. Ip added: “We’ll consider coming to London as a city, potentially in the next six to 12 months.”

It will bring another rival in the short-term rental industry, which has been largely dominated by the likes of Airbnb, but Ms Ip – a former UBS investment bank director – says Altovita is trying to make up for a lack of quality assurance.

“The sharing economy is becoming increasingly popular and yet there is no standard of quality for this sector – unlike in the hotel sector, which is very well defined in a five-star rating system that applies across the world and has done so for decades,” she said.

“Some of the poorer properties have fallen through the cracks and effectively frustrated a lot of the customers who effectively loved this model.”

Homestays v. Hotels

Guest Blog: The Future of Hospitality – Homestays v. Hotels

890 305 Guest Blog

Nakul Sharma is the CEO and founder of Hostmaker, London’s biggest Airbnb management company – and here he describes why he believes homestays and staying in a hotel are different sides of the same coin…

Over the last few years, homestays have become increasingly popular, with the explosion of companies such as Airbnb making these options a more convenient and cheaper way of staying in the world’s major cities. But does this explosion in popularity of homestays challenge the traditional hoteling industry or rather does it create a situation where the two can help each other?

Having worked in both the traditional hospitality industry and the property sharing sector, I can safely tell you that these two seemingly competing industries are actually more compatible then first glance might suggest. They are two sides of the hospitality coin, catering for different people with different and often complimenting strengths and weaknesses.

The main difference between the two is cost and the space available to enjoy a longer stay. Homestays generally tend to be lower in price than traditional hotels. As a result, they encourage travellers who would have maybe stayed for two-three nights in a hotel to stay longer and experience more of a destination. They are also preferred by a large group of people, or travellers looking for a room for month. Hotels are mainly tailored to the needs of an individual business traveller and aim to be efficient. Couples or groups travelling for leisure have very different needs. Rather than stealing clientele away from hotels, they are filling the gap in the market.

These two forms of hospitality also tackle the complications that come with very short or very long trips. Homestays provide much more flexibility, giving guests the option to stay for 3, 30 or 300 days, depending on their circumstances. Hotels are great for families or individuals looking to stay in one place for a few nights, but it can quickly become cumbersome when you want to move about or stay for an extended period.

By staying with a local through a homestay, travellers get a difference experience of the city. Before you would have had to explore a city with little or no knowledge, armed only with a guide book and relying on the hotel concierge. However, staying with a local offers guests a different perspective on a city and its culture. This is not something that everyone would like to experience as many people are happy to explore the city alone and enjoy the main attractions. Again, those that would have originally stayed in hotels are unlikely to migrate to homestays due to the fact that they are more interested in the comparative comfort of a hotel.

Many often say that they choose hotels for the luxury service and the knowledge that they can come and go without worrying about waking up their hosts or collecting their keys at a certain time. However, it is possible to replicate this service within the homestay market. Management companies, such as Hostmaker, have been able to bridge this gap in the market and provide a Hilton level experience to a regular homestay, offering a 5-star experience for guests and alleviating the pressure from the host.

Homestays often also offer unique properties. Treehouses, caravans and cabins are just a few of the types of accommodation you may find yourself in. For some people, the chance of a unique stay in an unusual location is an adventure, but others may be filled with a sense of dread. When you stay in a hotel, there is a standard that many people expect and more often than not, they receive. With a homestay, however, especially one in a quirky location, it can be very hard to determine. Those with a more adventurous streak may opt to go for a homestay but many people would still feel more comfortable with a traditional hotel.

So, when we discuss the future of hospitality, homestays are certainly part of it and a quickly growing part of it, but the demand for hotels is unlikely to be affected by the growth of this sharing economy industry. Both hotels and homestays occupy similar areas in the hospitality industry but by no means are their target market the same. Homestays do not have the capacity to steal the business of hotels and hotels cannot offer the individual experiences that homestays can. Rather than conflict, the two dovetail to offer customers different experiences to cater to individuals tastes.

hostmaker.co

Airbnb

Opinion: NYC’s mistake in attacking Airbnb

950 498 Daniel Fountain

According to reports in the United States, New York’s hotel industry is about to start playing dirty – very dirty – in their battle against the highly successful lodging company Airbnb.

In an advertisement scheduled to run starting on Monday (7th August), funded by the Hotel Association of New York City and a hotel workers union, concerns are raised over links between ‘security’ and the wildly popular home-sharing site. There’s even a reference to the Manchester bombing perpetrator Salman Abedi, and his use of a short-term rental apartment – even though it had not been booked through Airbnb.

Scaremongering text and images are used, including the phrase ‘Are you at risk?’, and lists a phone number to register complaints against the company with a message to ‘stand up for NY’s safety and security.’

Speaking to the New York Daily News, Airbnb spokesman Peter Schottenfels called the ad “an outrageous scare tactic by big hotels who themselves have a long history of lodging people who engage in acts of terror.” He then cited 9/11 and the 2015 Paris attacks, both carried out by attackers who stayed in hotels.

“The fact is Airbnb had nothing to do with the tragic events in Manchester and we are one of the only hospitality companies that runs background checks on all US residents, both hosts and guests,” Schottenfels adds.

Shots fired.

So why are hotels becoming increasingly paranoiac of Airbnb? It’s no secret that the rate of leisure travellers using private accommodation was up a third last year from 2011 and that Airbnb is encroaching on hotels’ bread-and-butter market of business travellers with each passing year.

But these sort of low-blow, questionable advertising campaigns are not the answer for hotel groups. They need to take the game to Airbnb – an ‘if you can’t beat them, join them’ sort of mentality. Whilst Marriott has had a grip on the shared, long-stay market for a while, more and more groups are breaking into this sector and will need to continue growing this portfolio in a bid to compete.

Moreover, the success of Airbnb has come in part through its readiness to engage and instant connection with the so-called ‘millennial’ market. Less uniformity in design, an emphasis on communal spaces, reflection of the locale, embracing ever-changing technology – all of these things inherent in the Airbnb ethos, hotels are now having to play catch-up and are getting better at doing so, albeit slowly. Now that social media is here to stay, it’s one of the most powerful tools at hoteliers’ disposal but it must be about ‘positive engagement’ with consumers – something this advertising campaign will certainly not engender.

Furthermore, the rates of Airbnb has made the hotel industry take an inward look at itself about how it has priced a considerable number of people away from its products, which is why we are seeing a host of ‘budget’ or ‘economy’ brands popping up within hotel groups’ offering. If you don’t want people to use Airbnb, you have to offer a similarly-priced alternative that ticks all the boxes in terms of the things mentioned above.

The steps the hotel industry has taken in the last decade since the dawn of Airbnb has been fascinating to witness and many of the innovations, perhaps spurred on by the demands of consumers loyal to the home-sharing concept, probably have Airbnb to thank for introducing them. This is a much better approach for the industry to take. Smear campaigns based in half-truths and playing on fears is not the right approach and makes the industry look desperate. Airbnb and its ilk are here to stay, the hotel industry needs to learn to live with and compete to win the hearts and minds of the next generation of traveller.

Airbnb nights booked in London more than doubles

908 435 Daniel Fountain

New research from Colliers International and Hotelschool The Hague reveals that nights booked in London with Airbnb rose by 130 per cent to 4.62 million in 2016, from just over 2 million in 2015. Furthermore, in the first four months of 2017, there was an additional 55 per cent uplift in the number of nights booked through Airbnb compared to the same period in 2016.

The success and growing popularity of this online marketplace has helped to see its market share of London’s overnight visitors more than double to nearly nine per cent in 2016, up from less than four per cent of overnight visitors making use of Airbnb for their accommodation in 2015.

Airbnb - nights booked in London more than doubledBookings in the boroughs of Westminster; Tower Hamlets; Camden; Kensington and Chelsea; and Hackney accounted for nearly 50 per cent of all Airbnb overnight stays, a trend also seen in 2015.

Marc Finney, Head of Hotels & Resorts Consulting commented: “Our research shows that Airbnb now represents a notable and growing type of accommodation offer in the capital. As the scale grows, the lack of regulation becomes a greater concern to many, and rightly so. It is interesting though that despite the growth, we’re seeing relatively little negative impact on the hotel sector. In a lot of ways, Airbnb is a different product offer, just one that now benefits from better visibility.”

Airbnb - nights booked in London more than doubled“Indeed STR data shows that London hotels held an Average Daily Rate (ADR) of £143 in 2016. Whereas, the London Airbnb ADR fell by eight per cent in 2016 to £100; and rates for private rooms fell by 15 per cent to an ADR of £57. This room type also became more popular than in the previous year. Overall though, despite the growing influence of Airbnb, we’re still finding strong business cases for proposed hotels in our development advisory work,” adds Finney.

Airbnb - nights booked in London more than doubledBy the end of 2016, the number of properties listed on Airbnb had grown by 57 per cent – from 88,162 in 2015 to more than 138,000 properties. Further, in the first four months of 2017, the number of active properties listed increased by 80 per cent year on year. Of the 2016 listings, almost 54 per cent were offered by hosts with more than one listing, up from 48 per cent. This reinforces concerns amongst communities and authorities about the scale of professional letting via the site. Jeroen Oskam, Director of Research at Hotelschool The Hague added: “The lack of regulation is a concern, not just for traditional accommodation providers, but especially for cities and residents. In addition, consumers’ rights and safety should be protected by regulation but if Airbnb guests encounter a problem, they have to rely on improvised measures by the platform.”

Dirk Bakker, Head of EMEA Hotels at Colliers International concurs, “Airbnb is no longer just an accommodation site for individuals letting out their own homes. People are now buying residential properties specifically for Airbnb, which has the potential to dilute neighbourhoods and become a social issue for residential areas, creating transient zones. This is already evident in Amsterdam and Barcelona for example and local councils are taking great steps to navigate these issues.”