For years, analysts have been talking about the disruptive impact of Airbnb’s alternative lodging solution to the hotel industry, but we think they are missing the point.
History Lesson Amazon.com is one of the world’s largest retailers today, mentioned in the same breath as Walmart, Target, and every other retail giant. Often, these companies are compared to Amazon instead of the other way around. For the past decade, we take it for granted that “you can find it on Amazon,” but this was not originally the case. In 1995, Amazon was launched as a bookstore. They were evaluated as a bookstore and measured on the number of books offered and sold. They were a disruptive threat to Barnes & Noble, Borders (remember them?), Hastings, and other regional and national giants in the space. While there is no doubt that the book business was turned on its head by Amazon, this pales in comparison to the larger impact of the company on the broader retail market.
Like Amazon, Airbnb is being measured by the breadth of its inventory. The site lists more rooms for sale than any of the largest hotel companies. Booking data is not known, but site traffic now rivals that of Expedia and surpasses that of most of the big brands.
Like Amazon, Airbnb is having an impact to the hotel market. Boutique hotels are feeling the pressure, and chain-scale brands are revisiting the amenities wars of the past (responsible for increasing the operating costs in the industry over the past two decades). Even so, it is clear that the “spare room” lodging alternative will never be an appropriate solution to many of the stay occasions/reasons for travel which drive hotel revenues today. There is a market for this offering, but it is not a universal one.
Airbnb as OTA Retail site designers no longer try to build a better shopping process. It could be done – just as you could redesign the layout of automobile controls to be more ergonomic – but the effort would be wasted. Why? Because Amazon.com has taught us all how to shop online. Today, winning digital retailers work from the process diagram & flow used by Amazon.com and try to differentiate with product selection, content, service, or pricing. Building an entirely new “add to cart/checkout” process simply causes confusion.
Airbnb is doing the same thing with millions of travelers each day. They are teaching people how to shop for lodging and what services to expect in a democratized environment that creates comfort with a very uncomfortable concept (sleeping in a stranger’s home). Adding traditional hotel inventory into this process will be simple and is a logical extension of their service offering just as Amazon was able to extend their offering to more and more adjacent categories in rapid fashion over their 20 year history.
Read the full article at: Skift
