Airbnb announced at the start of March that they are acquiring Hotel Tonight. This merger will change the way both platforms operate. It also indicates some interesting trends in the hospitality industry and suggests AirBnB has further aspirations to compete with OTAs. Skift have an excellent post about what all this means. I have also spoken to experts in the hospitality business to get their thoughts on the acquisition.
Andrew McConnell of Rented believes that many people in the industry expected this kind of merger to happen. He takes a very positive outlook, saying “the combined platforms, and guest eyeballs they bring will be great for those who list on both today.” By combining AirBnB and Hotel Tonight, hosts will now have a larger audience looking at their property. That’s good for everyone involved. It also gives potential guests a wider choice.
There are plenty of others that were unsurprised by the announcement. The creator of Cottage Blogger, Heather Bayer, discussed this as a clear step towards AirBnB’s goals of broadening their target market. Though this, of course, gives Airbnb listers a wider platform there are some concerns about what this means in terms of booking fees. Heather, like many others in the hospitality industry, suggests this could be a clear signal that Airbnb is set to charge listing costs to owners rather than bookers.
Airbnb Properties are hospitality businesses
With this wider market, Airbnb hosts will be reminded that they are hospitality businesses. They need to stay competitive with larger chains. According to Mercedes and Karen from 1 Chic Retreat:
“This is a reminder to all Airbnb hosts that they are in the hospitality business and should adapt themselves accordingly – chicly designed spaces, white sheets and towels, comfortable mattresses, bathroom amenities such as nice shampoos, conditioners and body soaps, and welcome baskets.”
Alanna Schroeder from the Distinguished guest echoes this sentiment by saying “for those that are playing Airbnb like a hobby or a way to make some extra money – it’s time to diversify!” You need to set yourself apart from the competition in a good way. If you only have a small space, simply upgrading what you have can go a long way. If you are looking to invest, we suggest taking on some more properties. The era of the super host is here!
Debi Hertert, the founder of Host2Host.org, adds “many home-sharers are just realizing they have a business and they are a viable part of the Vacation Rental Industry.” This merger serves as a further wake-up call for those who are simply renting out a spare room. With the politics around AirBnB changing many homeowners are considering how they frame their rental. This will have a big impact on what AirBnB offers, and how hosts should act.
Airbnb is seeking to compete with OTAs
Ultimately, this move poises AirBnB to start directly competing with Booking.com and other OTAs. Richard Vaughton, co-founder and director of Rentivo.com, believes AirBnB will “continue to morph to a full accommodation provider.” This means they will have to move away from their initial message of sharing spaces, and more towards traditional OTA style offerings. It’s only a matter of time before they develop their luxury range.
Annie Switzer agrees that the merger shows they are trying to compete directly with the OTAs. She mentions recent moves to improve cancellation policies and the reviews procedure as further evidence of this. “These are important moves for a company that wants to move into direct competition with HomeAway and to counter the impression that they are not as friendly to hosts as to guests”. The merger will bring further changes to the booking experience.
Damian Sheridan from Need More Rentals adds:
“Airbnb is clearly demonstrating a medium-term priority in adding traditional and more regulated hotel inventory – perhaps due to the relatively slow addition of ‘plus’ properties – and developing into a monstrous booking platform to rival, and eventually surpass Booking.com.”
One thing is for certain – Airbnb is diversifying their offering in a bid to become the largest accommodation provider. Many of their recent business decisions are clear indicators of this. Merging with Hotel Tonight will certainly give them a boost.
This merger is also a key indicator of what direction the travel industry is heading in. Jessica Vozel from Guest Hook points out Hotel Tonight’s main business model – last minute accommodation. She says, “I’ve heard a few Airbnb hosts discuss the rise in last-minute bookings at their rentals, and that trend seems likely to continue.” AirBnB’s initial interest in this acquisition may have been influenced by this trend.
Simon Lehmann of AJL Consulting agrees, adding “the average booking window for private accommodation has come down substantially and especially on urban inventory it’s less than 14 days.” Airbnb plan on integrating the technology used on Hotel Tonight with their own platform. This will make it easier for guests to book last minute.
The overall consensus is that Airbnb is now primed to compete directly with OTAs. This can change how the business operates and widen their target market. For property owners, this raises questions about what you are offering. There are many opportunities to reach new guests – but with those comes the need to upgrade your property and consider guest experience. It is yet to be seen if Airbnb will become a leading OTA, but there’s plenty of potentials.
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