With the number of COVID-19 cases declining as vaccination campaigns continue and Delta variants decline, the travel industry could be on the verge of a resurgence. Whether the hotels in this boom might hinge on what happens to Airbnb.
In an interview with Axios, Airbnb ABNB,
CEO Brian Chesky has predicted a “new golden age of travel” as people finally look to cash in on the vacation days they’ve racked up throughout the pandemic. The timing is favorable for operators in all corners of the travel ecosystem.
““They come to pick up our children.“
“As far as the hospitality industry is concerned and where it is now, it is not yet fully recovered, but we are coming back,” Davonne Reaves, hotel owner and consultant, told MarketWatch on a panel. video as part of Mansion Global. Real Estate Conference.
“Typically the hospitality industry is the first to decline during an economic downturn, but it’s the strongest to come back,” said Reaves, CEO of consulting firm The Vonne Group.
Experts on the panel suggested that the pandemic is unlikely to have a lasting impact on the hospitality industry. While this has helped accelerate the adoption of technologies like automatic check-in, they argued that hotels would likely eventually revert to pre-pandemic standards.
See the roundtable below:
It’s a different story, however, when it comes to another threat to the hospitality industry: vacation rentals.
Ian Schrager, an industry veteran who pioneered concepts like Studio 54 and the Boutique Hotel model, was blunt when he characterized threat platforms like Airbnb for the industry. “They are coming to pick up our children,” he said.
“The industry has denied this from the very beginning,” he added. “If we don’t react and respond to it, we’re going to be in trouble.”
A key indication of the impact of Airbnb and other vacation rental platforms is hotel squeeze – times when hotel occupancy rates are so high in a destination that hoteliers may increase rates. per night they charge. Vacation rentals can absorb some of this excess demand, particularly if local residents choose to add their properties to the platform to earn extra cash. As a result, hotel rates may not increase as much as expected.
This dynamic was in effect during the pandemic. Many hotels closed sections of their property when travel slowed during the outbreak, which could have pushed prices up. Instead, Airbnbs and other vacation rentals have filled the void.
““Usually they choose him because he has a kitchen. ““
To compete, experts have suggested that hotels should consider why people choose to stay in Airbnbs. “Usually they choose it because it has a kitchen,” Reaves explained, adding that high-end travelers could hire a private chef for a more luxurious experience.
“People are willing to pay for experiences,” she added.
Hotels, Schrager suggested, could mimic this experience by creating common spaces on their properties, such as shared kitchens. “You give them the same Airbnb experience, but with all the amenities and services that a hotel can offer.”
Schrager further argued that the hospitality industry should rethink the role hotels play in cities, essentially going back to a time when places like The Plaza were hubs of entertainment in their cities.
“It was an anchor for the city,” he said. “This is something Airbnb cannot do.”
Actions of a large hotel operator including Marriott MAR,
and Hilton HLT,
are up 15% to 30% year-to-date, in line with or exceeding the Dow Jones Industrial Average DJIA,
and the S&P 500 SPX,
over this period. Airbnb’s stock is up about 15% year-to-date.
Also see: Where’s the housekeeping? Hotels cut back on daily cleaning after pandemic