Is Airbnb really a threat to hotels?

Airbnb has grown substantially in recent years and now commands an estimated 22% of the market – making it larger than any individual global hotel group, and begging the question: what exactly is the impact of Airbnb on the hotel industry?

Helder Pereira, CEO of the UK’s leading independent hotel management company, RBH, believes the service has pros as well as cons. He says: “Airbnb is both disruptive and complementary to the industry. It’s been disruptive in terms of grabbing attention of the major hotel brands and making them sit up and take stock of how they can compete – but this has brought positive outcomes.

“It has resulted in innovation across hotel services, such as improving online platforms and investing in refurbishments and training to provide an overall better customer experience.  Superior service is an area in which hotels can excel, with far more touch points and opportunities to leave a lasting impression on guests.”

And Pereira doesn’t simply think the service has helped the industry up its game – he highlights the fact that Airbnb has added buoyancy to the wider market. He continues: “Just like the rise of guest houses and B&Bs a few years ago, Airbnb brings more people to the market resulting in considerable growth. It also adds value to the industry and raises service level standards.

“The growth of Airbnb resulted in a rise of travel customers – particularly millennials who are looking for quirky locations with a more personal offering. This then puts pressure on hotels to provide more than just a room, in order to provide that more rounded travel experience some guests seek in the heart of wherever they visit.”

The hotelier sees the opportunities that hotels can grab hold of in order to compete with Airbnb on a more local level. He adds: “Hotels can target this by raising awareness of their connection to the local area, or the history and architecture of the building itself. The food and beverage offering, social setting and atmosphere provided by the restaurants and bars in hotels is something Airbnb can’t currently compete with. Arguably, guests could be staying with Airbnb but hotels still benefit from F&B revenue.

“Although Airbnb has such a large market share, the revenue per available room (RevPAR) for hotels across the globe hasn’t shown even a small blip as a result. So while I can completely appreciate the disruption Airbnb has caused the industry, I firmly believe the change it has triggered has largely been complementary by benefiting market growth and adding value to the industry.”

Contributed by RBH