Airbnb: More Than a Threat, It's a Great Disruptor To The Hotel & Travel Sector.
By Vikram Singh
Friday, 3rd May 2013
I recently read an article on Airbnb on Euromonitor that declared: 'Airbnb.com Poses Only a Small Threat to Hotel Industry'; the truth is, Airbnb is not only a threat, but is actually a great disruptor for the hotel and travel sector.

The article I cited makes three critical errors in reaching its erroneous conclusion. Let's break them down.

Mistake #1: Airbnb is a "vacation rental" business.

Characterizing Airbnb as a vacation rental market play is simply not right. The article uses Wyndham Worldwide as an example of a hotel group that  "owns one of the oldest vacation rental brands—the British Hoseasons est. 1940" (who knew!). Well, congratulations to Wyndham Worldwide for keeping this a secret from the online world for 70 years! Maybe it was classified as a secret project from the WWII era?

To put Airbnb's reach in perspective, I polled 15 of my best-heeled traveler buddies. Many of them are currently working in the hotel industry. Everyone had used AirBnb or referred a family member to Airbnb at least once. (In case you were wondering, the number of them who contributed any revenue to "British Hoseasons" was ZERO.)

Folks, Airbnb goes way beyond vacay (I used vacay!) rental people. People book Airbnb for EVERYTHING – vacation, business, events, family get-togethers, elopements, comic conventions, etc.  What they are putting in the limelight is how quickly the online travel market is changing and growing.

Mistake #2: Its effects are limited to leisure travel.

Here is one of the headers from the article: "Hotels need to keep an eye on leisure travellers." Well, hotels need to keep an eye on ALL travelers and the massive changes that are happening in the way people are booking travel. Hotels need to learn to provide better value.

Airbnb is not just for a family on vacation that is looking for a kitchen to make breakfast in. Neither it is just hipsters looking for a hotel alternative because hotels are too mainstream. C'mon! It's much broader. I used Airbnb three times in 2012 for some serious business travel. Meetings, conference speaking, etc. You know… the trips where you have to work a lot? Think a lot of business thoughts?

Even the geographical outreach of Airbnb is spectacular. I had rooms booked in San Francisco, Phoenix and Singapore. Every single experience was excellent. Pretty ironic when I was staying in a Phoenix penthouse that belonged to the General Manager of a local designer hotel! The town was pretty sold out for the days I was there. I made the choice not to pay $465 for an Embassy Suite, and so did many other business travelers that week.

Mistake #3: Counting on the government to shut it down.

4Hoteliers Image LibraryEuromonitor article interestingly stated that "Local governments may be an ally."  to the hotel industry in controlling  Airbnb. Wow.

Counting on the government to shut down innovation and disruption-based business models is really sad.

Hotels need to know that any government that is going to shut down innovators is going use the same logic to hurt you when you innovate. Unless you have sworn off innovation as a hotel brand, beware what you wish for.

Anyway, let's get real. Building code violations in NYC are not going to be stopping Airbnb. Wishing for that to happen is a fool's dream.

In conclusion

Airbnb is way beyond a threat to hotels. It's a new way of conducting the business of travel. It is adding new entrepreneurs to the hotel business, as anyone with an additional room to rent can now be a hotelier.

Not only that, Airbnb is adding a supply of rentable rooms to cities across the globe. The words "the city is sold out tonight" have a brand new meaning thanks to Airbnb.

Original article

About Vikram:

The hospitality and travel industry today is in need of a major rethink of the way it operates and markets itself online. Working as an online revenue strategist for the hospitality and travel industry for over a decade, I have seen a lot of opportunity for improvement.

My mission is to educate and inspire players in the hospitality and travel industry to make things better. When I speak to clients and seminar audiences, my goal is to be a catalyst for change. I spend my time identifying problems, deciphering analytics, and transforming hotel assets for some of the biggest global hotel investment funds. I invite you to learn more about my experience and my ideas on my blog and or by attending one of my speaking engagements.

I am always looking for opportunities to make a positive impact on the industry that I love. Let me know if you're ready to hear more or join the cause.
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