How Boutique Hotels Can Compete With Airbnb
So Airbnb is snatching up millennial travelers and even poaching some of your long-time guests. What can you do about it? If this trend continues is the hospitality industry doomed? We don’t think so. If independent hotels learn from Airbnb’s successes, they can not only defend their market share – they can expand it.
What are the facts?
There is a lot of debate as to whether Airbnb is actually taking chunks of the pie, or just increasing the size of it. Some studies show no effect on the hospitality industry, while others show effects to be marginal. For example, the results from the most comprehensive study analyzing Airbnb’s effects on the hotel industry show that a 1% increase in Airbnb listings decreases hotel revenue by .05%. A recent study in Boston provided similar findings. Now, .05% of hotel revenue is by no means pocket change, but it’s not a figure that’s going to dismantle an age-old industry overnight.
Nevertheless, these numbers are enough to send the American Hotel & Lodging Association into a frenzy. They claim that there is a steep rise of multi-unit hosts who are effectively creating illegal hotels by skirting taxes levied on their industry. Whether tax regulation on Airbnb hosts is reformed in the coming years or not isn’t something that independent hotel operators have too much control over. In the mean time we suggest taking a page out of Airbnb’s book, and implementing some of their allure into your hotel’s strategy.
What is Airbnb getting right?
In short, a lot. For the sake of this post I’ll discuss only the things making Airbnb so appealing that independent hotels can mirror for their own benefit.
The user experience when booking a home on Airbnb is flawless. Both mobile and desktop applications are responsive, well laid out, show a calendar of occupancy, provide a map and easily allow guests to book immediately. The list goes on. All amenities are listed in one place and there are no hidden fees. There are even lists of “experiences” by destination that appear in a user’s search.
Authentic Local Experience
When you book a home on Airbnb you immediately know someone in that town or city before even arriving. Not only that, this new acquaintance lives there and knows of all the best local attractions. No, not the touristy hubs – real and authentic experiences. I’ve found recommendations from my Airbnb hosts to be off the beaten path, less expensive than their touristy alternatives, and to just feel more genuine. Think cluttered coffee shops with old books and real exposed brick – not the kind manufactured by the branding department of Starbucks.
Sense of Community
For a long time I had only booked entire homes on Airbnb. Booking just a room in a house full of strangers felt innately awkward. That is, until I tried it. I had a fantastic time, met other travelers and we are still connected years later. Of course not every experience will be like this, but the general sentiment of those who rent rooms rather than entire homes is a good one. In addition to meeting other travelers in your Airbnb home (or the host if it’s their permanent residence) you also have the opportunity to meet neighbors and people in the community. Striking up a conversation with a neighbor walking their dog is pretty damn easy when you can say “Hi, I’m from the other side of the world. What is there to do around here?”
Amenities. Amenities. Amenities.
One of the best parts about staying in an Airbnb home is the access to all of its amenities. Fast internet. Washer & Dryer. Kitchen. Netflix on the TV. You name it. Amenities are often the deciding factor if I’m between two places of the same price, and it’s displayed cleanly on each home’s page.
How can hotels do the same?
Here’s where boutique and independent hotels can get creative. Unlike major hotel chains, smaller players in the hospitality industry can make changes without waiting the weeks or months it might take to get them approved by marketing departments. Let’s look at those same points and discuss how hotels can implement similar strategies.
This one goes without saying. It’s 2017, and your customers have the average attention span of 8 seconds. According to a Google Study, 53% of mobile users will leave a site that takes longer than 3 seconds to load, and almost half (47%) of consumers shop on their phones. Though, only about 1 in 5 will complete a transition on their mobile device. This essentially means that both your desktop and mobile platforms better be up to snuff to convert customers.
You can rely on sites like booking.com & Expedia to bring in new guests, but if you ask me that’s just being lazy. Your website is the digital representation of your brand and business, and with it you have the opportunity to offer resources to win over your potential guests. More on that in the Authentic Local Experience section.
Authentic Local Experience
This is the big one, and it’s the one easiest to emulate. Take for example what the Walker Hotel in in New York does. In addition to hosting a blog packed with localities, Walker also has a “Neighborhood” page on their website. Here you can learn about the local area, find a calendar of local events, find off the beaten path attractions and more.
Charlestowne Hotels VP of business development Larry Spelts says that food and beverage will have to become more creative to compete with Airbnb. Travelers value unique localized meals. For hotels this may mean a lower ROI on F&B for the sake of becoming more profitable as whole in the long run. One way independent hotels are marketing their local specialities is by creating their own gardens. Being fresh and delicious won’t get the job done on its own, though. It has to look equally amazing. In a world of Instagram where people are uploading their meals to social media before taking their first bite hotels must reconsider their food displays.
Hotel employees are also an incredibly underused asset. Those are your locals right there! Front desk workers, doormen & other employees should be encouraged to interact with guests more – asking them what they have planned for the day, what kinds of activities they enjoy, what kind of food they like etc.
Sense of Community
Hotels also have the opportunity to become local hubs, something not previously considered by many in the hospitality industry. Creating a place where locals can come to enjoy a bite to eat, share co-working space or relax over a beer will in turn give hotels that local feel they’re looking for.
Kex in Iceland does a great job of this and has a packed schedule of events like beer festivals, musical performances, open mic nights and group excursions for guests. While staying at Kex three years ago I didn’t leave the building the first two nights because they hosted a craft beer festival our first night and a local band the next. Marriott’s new acquisition AC Hotels also does a nice job of this offering co-working space during the day and serving tapas plates at night.
Amenities. Amenities. Amenities.
Don’t be afraid to get creative with some amenities or to test outside of the box ideas. Charlestowne Hotels properties for instance offer complimentary shoe shines and make sure to have a bike share outside of the hotel. Talk about getting around like a local. It’s all about having a value add while not nickel and diming your guests. That’s what gets hotels remembered. That’s what creates loyal customers.
All of these points tie in to one another. The idea here is to sell yourself and your destination. Remember – people don’t book hotels to stay in the hotel the whole time. They book hotels as a means to experiencing a destination. If you operate with that mindset you’re on the right track to matching what so many travelers value in Airbnb’s service.