NB: This is an article by Morris Sim, founder of Brand Karma, a leading solutions provider for hospitality and travel brands
As a road warrior who frequently stays in all sorts of accommodation around the world, I decided to analyze the allure of Airbnb and compare it to staying in hotels.
I conducted mini-focus groups with Baby Boomers, Gen X, millennials, and iGen to hear their thoughts. This article summarizes my thinking for hoteliers.
1) While it’s an apples-to-oranges comparison, both are fruits.
I, too, feel that a hotel experience is different enough from an Airbnb experience that it’s not fair to compare them. However, for hoteliers, the conversation should not stop there; it should begin there.
Airbnb isn’t so much new competition but a paradigm shift, which has the potential to do more damage than traditional hotel competitors.
My research finds that because of pricing, some travelers divide a hotel’s value into two distinct components: accommodation versus service. First and foremost, they think ‘I need a room with a bed.’ And if they feel they don’t need service, or read reviews about bad service, then these travelers are likely to look for something on Airbnb that is within their budget.
It’s an old advertising adage that people buy with their heart. Dear hoteliers, win hearts with good service! This is what makes you special. Based on the voice of your customers, winning hearts involves triangulating your service between competence, helpful attitudes, and proactivity, particularly when things go wrong unexpectedly for a traveler.
Airbnb hosts aren’t used to dealing with problems like your staff, and the peace of mind that this creates is worth a lot, but you have to deliver on that promise should the need arise.
2) Sure your hotel has services, but are those services meaningful enough to win hearts?
Part of the problem the information age introduces for hoteliers is that guests can google everything; now travelers often know more about the destination than your average hotel staff. I have heard such travelers not consider the concierge or guest relations at all not because their services don’t even enter into the mindset – googling is faster and less biased.
Also, a traveler can google their way to many local services that further dilute the convenience benefit offered by a hotel’s traditional services.
For example, Uber makes local transportation seamless – have you used Uber because you can get a car faster than your hotel bellmen? Also, local food delivery services make in-room dining seem superfluously expensive, particularly when there’s a mandatory service charge tacked on that’s more than the delivery service – and they have more distance to travel!
Minibars seem like relics of the past, and the ones that auto-charge after an item has been moved from its slot for more than a few seconds make guests feel they’re untrustworthy – is it worth the headaches and the bad will?
And even the best housekeepers cannot fix problems with poor maintenance or design: low water pressure, unpredictable hot water, no AC outlet, or hair dryers that whisper not shout and are permanently tethered to something… as if travelers don’t have a need for a powerful and mobile hairdryer.
Airbnb hosts have lower expectations to fulfill. Aside from a truthful description of their place, they just need to offer efficient check-in/out, and fast, reliable wifi.
Recently I stayed in a Singapore flat and the host said that airport pickup was included. I was so happy I told a lot of people (like you, now).
Dear hoteliers, the concept of convenience needs to be redefined. Some assumptions about what makes things convenient for travelers are outdated because travelers can find better, cheaper, and/or faster alternatives elsewhere. Their cleverness erodes the value of your service. The spirit of service is what you have to maintain; the manifestation has to be relevant for your customers today and tomorrow, not of yesteryears.
3) Airbnb isn’t just for leisure travelers; it cuts into MICE, corporate travel, and long-stays.
There’s a misconception that Airbnb is for leisure. Maybe in the past when it first started, but holding onto that view in 2016 would be like believing the world is flat.
People in the hospitality industry already stay in Airbnb for leisure, corporate, and MICE purposes, why would it be different for people in, let’s say, tech or finance?
Did you know that Airbnb has a program for business travelers? It also has a partnership with Concur allowing big companies to expense their Airbnb stays just like they can with hotels.
And people that are considering long-stay – even the Boomer luxury traveler in my focus group – would consider Airbnb for stays of longer than 1 week.
We can keep saying these people aren’t typical hotel customers, but that just proves that Airbnb is a disruptive paradigm shift: we’re admitting that the addressable market shrank because customers we could have had moved on to the new paradigm.
Sometimes hoteliers think about Airbnb like the way the music industry thought about records. The integrity of the hotel experience is analogous to the integrity of an album – the assumption is that people want the whole thing and are willing to pay for it all. But just as a record has some songs that you like, and some songs you don’t, so it is with hotel services.
It took the music industry a long time to figure out how to make money by song as opposed to by album; meanwhile they were losing young customers to Napster (some of whom were then sued by the record labels for piracy).
It turns out people, even youngsters, wanted to pay, they just didn’t want to pay for a whole album filled mostly with songs they didn’t care for and there weren’t any alternatives other than services like Napster.
Fast forward to today, other than Adele, when was the last time you bought a full album? Or even bought any music at all if you use a streaming service such as Spotify? Yet we are all still customers of music.
So dear hoteliers, to make the Airbnb trend work for you, I would stop saying Airbnb customers aren’t hotel customers; instead, I’d say Airbnb customers are a new type of customers that we should be courting for our hotels, and have a plan for them just like there’s a plan for Chinese customers, Halal customers, and honeymoon customers.
4) Invest in content marketing as hotels are becoming as distantly familiar as Airbnb flats.
Because what Airbnb has to offer varies so much from flat to flat, there are more filter options on Airbnb for users to customize their search. For example, I can filter by the inclusion of a washer or a dryer. However, the way flats are listed and displayed on Airbnb is similar to hotels in an OTA. Both user experiences commoditize the inventory – each listing has the same format as all others.