It’s no secret that Airbnb has drastically disrupted the travel industry and has positioned itself as a unique and local online travel agency for travel consumers. Yet, while Airbnb paves the way for a new niche in travel, the industry player is disrupting hospitality and affecting a hotel’s bottom line in a major way.
In these times of flat and even negative occupancy projections, and Airbnb satisfying a portion of the travel demand, hoteliers must fight for every guest inclined to stay at an Airbnb rental. Airbnb is taking 10-12% of travel demand in New York City, Paris, London and other major global metropolitan areas alone. The impact affects overall occupancy and hotel room pricing, leading hotels to be unable to raise ADRs in periods of traditional peak demand. In fact, according to Morgan Stanley research published in AlphaWise, 49% of survey respondents in the US, UK, France, and Germany reported that they booked an Airbnb in place of a traditional hotel in 2016.
Even more concerning, the research predicts this number will remain steady throughout 2017 and Airbnb’s cannibalization of hotels’ business will hover at approximately 50 percent for both business and leisure travel. The impact affects ADR, leaving hotels unable to raise prices in periods of peak demand, and ultimately, affects overall occupancy.
According to HVS, It is estimated that the hotel industry loses approximately $450 million in direct revenues to Airbnb per year. In light of this industry climate, hotels must take action with a unique value proposition on the hotel website and a smart marketing strategy in order to combat the negative effects of Airbnb on their bottom line.
Read on for a 2017 action plan to combat Airbnb and win the direct booking.
The Hotel Value Proposition on the Hotel Website:
To combat the effects of Airbnb on your hotel’s bottom line, hoteliers should promote features and amenities that Airbnb lacks. Here are value propositions to consider promoting on the hotel website:
