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If one believes popular media, private rentals are crippling hotel sales. I have already debunked this idea, but it is true that the sharing economy is changing the hospitality landscape and offers new challenges and opportunities to hotels. Hotels and private rentals are not mutually-exclusive, and hotels can benefit from the sharing economy by considering the changing demands of travellers and by focusing on those services which make them stand out from alternative accommodation providers.
Airbnb and HomeAway have been busy in recent weeks. Airbnb closed a deal with the UK Government on 26 March, allowing its hosts to share their rooms for up to 90 days without registration, and it was named the official alternative accommodation supplier of the 2016 Olympic Games in Rio de Janeiro. HomeAway, meanwhile, made a minority investment in Canadian rental platform CanadaStays to strengthen its position in Northern America. With developments like these, private rental platforms will increasingly compete with hotels for sales. Arguably, there are a number of ways in which private rental platforms can outperform hotels:
Hotels have attributes which put them ahead of peer-to-peer accommodation in other aspects:
It is a myth that the sharing economy is only for tech-savvy millennials looking to save costs by lowering their demands for traditional hotel service and luxury. The number of consumers using sharing economy platforms is increasing and the user base is maturing.
This does not mean, however, that there is no place for hotels and their services. The growth of the sharing economy, with private rentals and car-sharing as its poster children, offers multiple opportunities, and not only for these sharing economy platforms. Rather than focusing on the threat of the sharing economy, hotels can learn from these changing demands and consider what opportunities are on offer. Hotel management should be progressive and consider the following:
Discussions on the similarities and differences of service provision between hotels and private rentals will most definitely increase over the coming years as the hotel industry comes to grips with the challenges and opportunities offered by the sharing economy. Getting a head start by considering its implications now is vital.