Airbnb is buying into the hotel industry, having acquired HotelTonight – a curated booking site for boutique and independent hotels – and invested in OYO, India’s largest hotel company. This is bad news for many global hotel brands. Here’s why they should sit up and pay attention.
Firstly, the move enables Airbnb to cater to the last minute traveller, by solving two key problems faced by traditional home rentals: lack of accommodation availability and delays in communications with the home host. Up until now, these issues have played nicely into the hands of the hotel business, who have comfortably accommodated travellers flying by the seat of their pants. But with Airbnb stepping up to address their shortfalls head on, hoteliers need to start making waves to position their brands as the number one choice, now another sits comfortably on the table.
Secondly, the HotelTonight portfolio acquired is made up of boutique and independent hotels. Capitalising on the fact that global brands rely on a universal positioning, like for like interiors (on the whole) and familiarity with the brand to attract and retain customers, due to the sheer size of their portfolio and the need for global consistency in brand image and customer experience, Airbnb are carving out a niche point of difference for their portfolio. This is a genius move, because they know that the big dogs cannot realistically create a truly individual experience for each of their hotels – from design to CX, it would be difficult and costly to achieve this for each separate hotel, let alone each room.
Thirdly, by acquiring boutiques, Airbnb has brought little fish into the big pond in terms of attracting and retaining guests. In the past, even if these brands had the upper hand with customers searching for a truly unique experience, they fell down when it came to customer acquisition thanks to limited finance and infrastructure. With smaller marketing budgets, smaller teams, a lack of slick digital infrastructure to support the booking process and a lack of timely brand activity to achieve the same reach as their global counterparts, unrivalled customer experience was more difficult to achieve. Airbnb have just handed one of the best digital booking experiences to these brands on a plate, which is sure to be a game changer for brands in the ‘unique’ positioning space. It has to be said, that HotelTonight’s app is reported to be strong already and well-regarded from a millennial audience, so regardless of whether they migrate the portfolio into the Airbnb app or retain HotelTonight’s current format, they are in a strong position.
The investment in OYO – which stands for “On Your Own” is a timely partnership – as the brand looks to appeal to the overseas traveller. Airbnb are equally securing a strong position in the Indian market with the move – which they claim is one of five fastest growing markets worldwide. Overall, OYO claims to cover close to 500,000 rooms across 13,000 hotels and 6,000 homes in eight countries: India, China, Malaysia, Nepal, the U.K., UAE, Indonesia and the Philippines – (Source: Tech Crunch).
However, given that it’s known for being the alternative to hotels, is Airbnb weakening its own brand positioning by making this move? Regardless, it seems it’s a necessary decision. Facing ever more pressure from cities around the world to regulate private home listings and keep the hotel industry afloat, they are facing more and more barriers in the private rented sector and as such must broaden out.
Big players in the hotel industry need to assure their brand, digital and customer experience strategies are strong and nimble enough to prevail over Airbnb’s steps toward sector domination.
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