How CanTraditional Hotels Compete with Airbnb and Other Rivals?

Beat 'em and Join 'em

By Pamela Barnhill President & COO, IHT, IBC and IVH Hotels | November 06, 2016

The ability to provide a rich selection of goods and services for potential customers has aided the rapid growth of peer-to-peer platforms. Airbnb, one of the most successful of these, defines itself as "a social website that connects people who have space to share with those who are looking for a place to stay." Because of its rapid growth and popularity since Airbnb's launch in 2008, hotel industry leaders worldwide have been attempting to answer the Airbnb challenge.

What impact will the homeshare service have on the hotel industry? With each discussion comes a variety of responses and platforms, some accusing Airbnb of unlawful practices and others praising Airbnb for its innovative platform.

Any supply, whether it is apartments, hotels, villas, B&Bs or private rentals, affects hotel supply and subsequent demand. From a consumer's standpoint, now is a great time to find and book whatever kind of lodging one may be looking for because of the multitude of options. The desired type of lodging depends upon the purpose of the consumer's travel, and location and price have an impact on hotel demand as well.

alt text

At present, Airbnb is reported to account only for 1 to 2 percent of entire hotel demand, but Airbnb's greatest effect on that demand is seen in large, popular cities such as Los Angeles, New York City, San Francisco and Chicago. In these cities, according to AHLA reports, Airbnb cuts into 5 to 7 percent of hotel demand.

Taxes are a controversial issue in the debate over vacation rentals, with hoteliers complaining that most homeowners who rent via Airbnb have an edge because they don't pay them. Previously, homeshare platforms took advantage of one of the tax code's best freebies: a provision allowing people who rent out their homes fewer than 15 days a year to pocket the income tax-free. However, this is starting to change because once hotel industry leaders caught wind of this exemption, they began to take steps to eliminate it.

Choose a Social Network!

The social network you are looking for is not available.

Close

Hotel Newswire Headlines Feed  

Bonnie Knutson
Steve Kiesner
James Dervin
Didi Lutz
Jeff Slye
Bill Kotrba
Naseem Javed
Gary Henkin
Steve Kiesner
Michelle Wohl
Coming up in May 2019...

Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.