Combat Airbnb Effect on your Hotel’s Bottom Line
Recently Airbnb announced the formation of a technology partnership with SiteMinder, a cloud-based channel management platform used by more than 28,000 hotels around the world. Now, hotels that use SiteMinder and meet certain criteria from Airbnb can easily list their inventory on Airbnb.com. This includes real-time availability, rates, and content on Airbnb thanks to this new partnership.
If there were any doubt as to Airbnb’s true intentions of entering the OTA space and start aggressively competing with online travel agency giants such as Booking.com and Expedia, they need to be laid to rest immediately.
Why is Airbnb Entering the OTA space?
The lure of higher commissions from hotels in the range of 15%-20% vs. the lesser 3%-6% from private accommodations is the main reason why Airbnb is venturing into the OTA space. Another reason is that hotel accommodations are typically instantly bookable while most of the private accommodations on Airbnb are listed on a reservation request basis. Indeed, out of more than 4.5 million private accommodations listed on Airbnb, less than 45% are instantly bookable.
Will travel consumers embrace this recent move by Airbnb?
Airbnb has established itself as the purveyor of unique private accommodations. However, what’s the added value for consumers when many of the hotel accommodations are already available on endless OTA and metasearch websites?
Further, hoteliers have to maintain rate parity on Airbnb since all rates are publicly available and Expedia is already monitoring them. Travel consumers will be seeing the same hotel inventory and rates that are available on every other OTA and metasearch website, including Google Hotel Ads.
We have to ask ourselves: why do travel consumers use Airbnb to begin with?
When people want to book a hotel, Airbnb typically does not come to mind. We have clients on Airbnb that report they are getting occasional bookings from this site. The main reason for this is that consumers do not go to Airbnb to book hotels but to find and book unique private apartments and houses at a reasonable price. TripAdvisor learned the hard way with its Instant Booking feature the truth about entrenched travel consumer purchase behavior. Instant Booking was a major flop since consumers simply did not accept TripAdvisor as a hotel booking channel.
Overall, travel consumers will not be easily accepting Airbnb as a hotel booking channel and hoteliers should not expect an avalanche of bookings through this channel.