Can Old-School Hoteliers Survive the Sharing Economy?
People are just beginning to understand what the sharing economy is all about and the impact it is making on old-school businesses.
There are many sharing economy examples such as AirBnb and ZipCar among other companies. AirBnb and ZipCar have altered the way people rent rooms and cars. AirBnb has forever disrupted the entire sleepy (pun intended) hotel industry and ZipCar is paving the way to a future where people do not own cars.
AirBnb is now almost twice as valuable as Hilton Hotels.
And according to a 2016 study about AirBnB room bookings “…analysts project Airbnb bookings will increase from around 79 million “room nights” this year to roughly half a billion annually in the next five years—and a full billion per year by 2025.” This has caught the attention of old-school hoteliers, many whom did not see the writing on the wall. While these old-school hoteliers fight AirBnb in the courtrooms and taking cover under decades-old city laws regulating room occupancy. Consequently AirBnB continues to expand at an amazing rate and keeps chipping away at the old business model that relies on building expensive hotels and renting rooms.
In 2016 NY Times posted an article in their Travel Section addressing this exact same question. The article points out… “that one in three leisure travelers in 2015 used private accommodations, up from one in 10 in 2011, and that 31 percent of travelers who used Airbnb in the last two years had used it for business.” More recently a NY Times article discusses the new laws being adopted to curtail individuals renting their apartments on a short term basis. — These stats must send shivers down the spines of every hotel chain that relies heavily on business travelers.
What is the old-school hotel industry thinking? Planning? Strategizing?
What should they do? Should they double-down and market their existing offerings more aggressively or should they alter their product and service offerings? What should they do to compete with AirBnB? Nothing? If not nothing, then what is their response?
Bottom-line is that the sharing economy is here to stay and will continue to grow. Hotel marketers must respond with a compelling marketing strategy. More importantly they need to respond with a compelling suite of products and services that fulfill the demands of the average person that is flocking to AirBnB.