The ultimate guide to how hotels can compete with Airbnb
February 22, 2017 by Matthew Charles
The rise of Airbnb has seemed unstoppable. Seemingly out of nowhere, it appeared on the scene and within a few years had made such a large impact, profits of doom started talking about the death of the hotel industry. In 2016, 19% of leisure travellers claim they used Airbnb and OTAs (including booking.com) are now listing apartment rentals.
The party may be starting to wind down for Airbnb though. New taxation drives brought on by political lobbying from hotel groups will translate to price rises in Europe and the brand has been tarnished by increasingly intolerant locals, annoyed at late night parties and increased rents as savvy investors buy up property to use on Airbnb, forcing up property prices.
But the problem for hotels is not the company itself, more what it tapped into.
With a projected market share of 25% for 2017, airbnb is still growing. What has it got so right and what can hotels do to capture some of that magic that convinces customers to book with Airbnb?
On a recent trip to Thailand I noticed that many travelers (myself firmly included) search for both hotels and Airbnbs; neither one has replaced the other. I also spotted a surprising amount of properties listed on both. The difference isn’t as big and scary as we believe. Forbes recent piece outlines why Airbnb won’t be killing the hotel any time soon .
At Fiz, we can’t help but feel all the analysis on this issue misses the most fundamental point. The problem, in a nut shell – Airbnb is simply cool and it quenches the new thirst for ‘authenticity’, making the hotel industry seem a little old fashioned and disconnected in the process. It’s that simple.
The fight back? Diagnose, learn, adapt. What is Airbnb doing that makes it more attractive? After all, at the end of the day it’s just a room to down for the night when away from home. The rest amounts to little more than push and pull factors.
Hotels can and must adapt their customer experience to gain back some ground and thrive in the new travel economy. Airbnb has shown the way, let’s follow them.
Become a community hub
Aibnb lead the charge into the sharing economy. People were now looking for something different and hotels started to look outdated. The chief appeal of the sharing economy is an ‘authentic experience’, a sense of using unoccupied space, living with a local and being in the thick of the action. In reality Airbnb can often feel like an impersonal money spinner with a less than ideal location. Hotels can tap into that sharing vibe and create a personalised, local experience in ways Airbnb often doesn’t.
Increasingly hotels are thinking of becoming community hubs. Places locals can do their laundry, grab a coffee, eat a decent affordable meal, use a shared workspace and pick up their parcel deliveries. Previously ignored, this whole new demographic – the local – is opening a world of possibilities. Even the smallest hotel can incorporate these features and smash the wall between themselves and their locality.
Marriott’s new acquisition AC Hotels is doing exactly this with a communal area which is “co-working space by day, hub of social buzz by night, serving tapas plates” and you’ll also find “bartenders with local expertise“. As you can see from their advertisement, the words ‘authenticity’ and ‘experience’ must be flying round the Marriott boardroom and marketing department. The slogan ‘feel the city’ says it all.
Becoming a community hub not only has the side effect of picking up lost revenue from new streams but also appeals to those who are seeking authenticity in the shared economy, which happens to be the cornerstone of Airbnb’s success. Being plugged in to the locality appeals to millennials and has the potential to change the collective image conjured when people hear the word ‘hotel’.
Sell yourself and your location
It’s now more important than ever to put a face to the name, soften your image and bring atmosphere and character to your site and service, remove hidden charges and make your guests feel special. Virgin hotels promise no surprise fees and mini bars at street prices, with the slogan “this is your hotel; run it as you wish“.
Transforming the experience on the ground is a must but always bear in mind the punishingly high online bounce rate; it’s essential to sell your hotel from the get go on your website. Immediately grab customers with a stella landing page which says who you are and what you’re about in a simple, uncluttered way, selling the location and displaying local knowledge. The Maritime hotel, OT and Edition are great examples of clear, user friendly home pages with a sense of style. Video is another great way to instantly capture attention and show off your location and knowledge. Ritz Paris have an opening video which boldly takes up the entire screen. All the above sites share another crucial feature – they are easy to book, a key appeal of Airbnb for mobile savvy, time poor travelers.
Winning trust as a knowledge hub is essential in the age of shared. Guests wanting to feel connected to their location and indulge ‘authentic’ experiences will respond positively to hotels that command authority as local knowledge experts. Provide practical information, tailored tours, local event discounts. Offer useful tips on a blackboard in the lobby, through chats with staff, in an email before guests arrive or any other way possible.
Keeping in mind that click off rate, hotels appealing to the millennial authentic seeker are increasingly adding a well maintained ‘neighbourhood’ section to their website. By implementing simple widgets that display attractions, hints and tips in your area you can bring your location to life.
New York boutique Walker Hotel have a particularly dedicated neighbourhood page. Denmark’s The Mayor has taken the time to show off its location with a dedicated page showcasing nearby attractions. London’s Dictionary Hostel uses our Fiz place tiles to sell its location and guide guests to their favourite recommended nearby gems.
Embrace the homestay
The rental apartment/holiday homestay has the benefits of self catering, host interaction and a home away from home feeling. Hotels, on the other hand, are safe, clean, knowledgable and service driven. Hotels can provide guests with the best of homestay combined with the best of hotels as, crucially, a hotel is not someone’s home.
One perk of Airbnb is the ability to cook for yourself, freeing a lot of young people to travel who worry about budget. Hotels can start to provide self service facilities in room or in a shared space or link up with local restaurants, bakeries, etc. to provide easy, affordable food to guests . Consider ditching room uniformity and tailor rooms to different needs. One room can be totally self sufficient for the family looking for a home away from home, another can have four bunk beds for the gap year travel group.
Many large hotel chains are snapping up homestay brands for their portfolio but the smaller hotel can adapt with simple changes.
Utilise your best assets
The homestay is often considered a less lonely experience than the cold, corporate hotel where you can interact with your host and learn about your new environment. We all know this isn’t always the case and this is where hotels can really move up a gear.
Your staff are your greatest asset. I’d say that’s true of every industry but its particularly apt in hospitality and a largely untapped resource. Your staff know the locality well and finding ways to communicate their knowledge to guests is a great way to ensure happy customers and good reviews. Staff members can Instagram for your hotel with a direct website feed or write a weekly blog with insider tips and insight.
Loew Hotels launched their #TravelForReal campaign which encourages guests to share photos of the hotel on Instagram.
The hotels final main advantage over the homestay is the guests themselves. Encouraging guests to share their experience on social media is a way to instantly connect with people at the beginning of the research journey. Staying at an Airbnb, despite being as close as possible to living like a local, can be a lonely experience. By putting on events, setting up a cosy cafe area or shared workspace, hotels can foster social bonding and bring people together, locals and visitors alike.
Making guest not feel like tourists and finding ways to help them experience their surroundings like a local is key to succeeding in the new era of the hotel industry and utilising hotel staff and guests is the perfect way to bridge that divide.
What people are looking for is value . And, crucially, value for money does not mean cheap. Cheap is paying little and getting little, value is getting a lot for what you give. With an updated website, friendly booking page, reassuring content and an all round good user experience, hotels can expect to see their click off rates plummet and bookings rocket.
We hope these insights help on the journey to win back customers and transform the hotel experience into something modern and desirable.
Contact us to see what Fiz can do to help.