Airbnb doesn’t need to build or own inventory, it facilitates access to existing assets, such as spare rooms, holiday houses, entire islands or treehouses.
At the annual Hospitality Financial and Technology Professionals conference (HITEC) in Los Angeles, Rachel Botsman, Founder of Collaborative Labs, talked about how the collaborative economy will transform the hospitality ecosystem. She was talking to a group whose sector was getting hit hard and fast by the ideas she was going to share. How do hoteliers really feel about Airbnb?
I was amazed that this audience was surprised by the scale of Airbnb.
A nice man from Hilton came up to me to say I needed to add a few more rooms to the Hilton side! But the point I was focusing on was not to pick on Hilton, but to highlight why Airbnb can scale so incredibly fast. Like so many collaborative economy marketplaces, Airbnb’s model is ‘asset light’; it does not need to build or own inventory, but instead facilitates access to existing assets, such as spare rooms, holiday houses, entire islands or treehouses.
One of the common responses I hear about peer-to-peer travel marketplaces is that they will not appeal to “x” segment (“x” is typically “older people” or “business travellers”) because the experience is unreliable or inconsistent. I challenged the audience to think about the unique value they can deliver in their current format that will give their business immunity to change. I then showed this slide of the supporting service ecosystem emerging around peer-to-peer marketplaces that will remove the hassles for hosts, and improve the consistency of the experience for guests.
The point was that many of the functional “differences” such as 24-hour guest support, hotel-grade cleaning or fresh linen can be provided, and these services are already being replicated. In short, the service of a hotel can be now provided in a home.
“The quality of our rooms or properties is superior”, is another common response I hear from the hotel industry. Yes, there is inconsistency in the places available on a peer-to-peer marketplace, but it will be tricky to compete on the diverse range. We can now create a market for things that never had a marketplace before.
Then there are marketplaces such as One Fine Stay that only allow high value properties that are individually vetted, meaning you can access expensive homes such as this one:
I was struck by the number of people who came up to me after the speech to say how hard it is to get their marketing, tech and product development teams thinking beyond physical assets (rooms, gyms, restaurants etc.), and to truly focus on the entire trip experience.
In this video, Airbnb employees talk about how they storyboarded the entire host and guest experience, frame by frame.
On a related note, I spoke about how companies in the Collaborative Economy truly get the idea of ‘mobile first.’ Personally, the only way I use my phone in relation to staying in a hotel is to search for information. I think I once used it to actually check in, but that’s it. So mobile is still for the most part in the accessing information phase of mobile. But there is a massive opportunity to use mobile tointeract with guests and for guests to engage with hotels during and after their experience. We might discover where we want to goonline but ultimately our experience is offline; mobile can bridge that gap. Interestingly, several people in the audience came up to me to relay how it echoes with a problem they have that much of their IT spend is still on search and booking.
Note: I was told that mobile hotel bookings are expected to grow by 225% in 2014 alone, hence the focus.
Space marketplaces are the most-talked-about segment of hospitality because of the success of Airbnb. What I wanted to show was how spaces are just the tip of the iceberg in terms of our ability to share our boats, planes, local knowledge, cars, dinner tables and office spaces in ways that will collectively come together to create a new ecosystem for how we think about and experience travel.
Photo credit: realestate.com.au