Mumbai-born Nakul Sharma the founder of Hostmaker, named one of Forbes’ five fastest growing companies to watch in 2016, believes branded homes are the next big thing
The concept of staying in a stranger’s home instead of a hotel was once inconceivable. Airbnb changed all that and were early pioneers in the so-called sharing economy. The result is that we now find ourselves on the verge of a travel revolution where homes are regularly chosen an alternative to the hotel.
In April last year, Accor, one of world’s leading hotel operators declared the €148m acquisition of Onefinestay – an upmarket Airbnb competitor that provide short-term lets. Accor aims expand Onefinestay’s inventory of 2,600 properties in London by targeting 40 more cities across the globe.
My prediction is that this will not be an isolated case and over the next few years, increasing numbers of hoteliers will move to homes. worldwide as the very essence of the industry evolves.
The science behind the branded home
Why will homes become hotels? Simply put, it’s maths. There isn’t enough supply to fill demand when it comes to hotel rooms. In Europe last year, according to PriceWaterhouseCooper, supply for hotel rooms increased by 0.8% while demand increased by 3.1%. This trend is predicted to continue with cities like London, Berlin and Moscow worst affected. The problem has resulted in a spike in the price of hotel rooms and travellers seeking alternative options.
All of this begs the question: why not build more hotels? This appears to be the obvious solution to the problem, however the reality is not quite so simple. During the hospitality boom of the 1950s and 60s, the industry burgeoned because operators actually owned the land they built on.
These days, hoteliers rely far more heavily on real estate developers. This makes building quickly from scratch much trickier than before. Though travel demand has returned to pre-financial crisis levels, there aren’t enough rooms to cater for travellers. Real estate developers run behind prevailing cycles, so building new hotels takes a great deal of time – expect to wait eight to ten years to see these new hotels!