Laurent A. Voivenel, Senior Vice President Swiss-Belhotel International, spoke at HSMAI Middle East Conference in Dubai on ‘Convergence and Synergies’ between hotels, serviced apartments and Airbnb.
Since its start, the impact of Airbnb on hotels, OTAs and house rents has been phenomenal especially in gateway cities and other popular holiday destinations. According to a recent industry research, one in three leisure travellers use private accommodations. Laurent stated, “Globally one third of all accommodation bookings are made online. Every transaction on Airbnb means a loss of revenue for hotels or OTAs. However, Airbnb is not an enemy, they have only been smart to create something that we hoteliers should have thought of. We are simply in an era of shared economy where in the last 20 years we have seen many disruptions in our industry by a number of non-traditional hotel players and Airbnb is one of them.”
Laurent believes Airbnb and hotels complement each other and help to grow and diversify tourism in a destination giving more choice to tavellers. He stressed, “A lot of boutique hotels are using Airbnb just the way they use OTA platforms. Typically OTAs charge hotels 15 to 25% fee per reservation while Airbnb charges flat 10% commission from hosts on every booking. So any hotel that needs to fill up rooms can benefit from Airbnb as one of their marketing arms.”
Ninety per cent of Airbnb revenue stems from personal stays and 10% from business travellers. However, business travel is a segment growing rapidly on Airbnb. Laurent said, “Today over 250,000 companies use Airbnb for business when in 2015 only 250 companies travelled with Airbnb. Now, Airbnb lets you search for properties that are ‘Business Travel Ready’ and equipped with essentials like internet, workspace with laptop, 24/7 self-check-in, fitness facilities, etc. So it is definitely another area where Airbnb is going to grow fast in addition to new developments such as Airbnb Trips and the recently announced Airbnb’s home-hotel hybrid in Florida.”
Some of the key factors for growth of Airbnb have been accommodations at any price point, privacy, anonymity, well-located homes with kitchen facilities, diversity of products and authenticity of experiences. Laurent said, “Hotel brands are recognizing guests want a more genuine experience reflective of local culture and we are seeing emergence of more socially-oriented hotel brands offering homier settings and more functional spaces. There has also been a strong focus on providing what millennial travellers expect in terms of connectivity and product.”
Laurent concluded, “There are lot of areas such as safety, quality and service standards where hotels score over products on Airbnb or even serviced apartments run by small local independent operators. Also, an advantage we hoteliers have is we see the clients and have a direct relation with them which Airbnb or OTAs don’t since their business is virtual and they don’t have people on the ground. Let’s embrace those guests if we are to keep them by offering them great value for money and building relations.”