To Airbnb or Not To Airbnb – A Question for Hotels

 In Hotel Marketing, OTA Strategy, Revenue Management

As AirBnB continues to revolutionize the hospitality industry, we are still seeing new initiatives put in place which are strengthening AirBnB’s positioning.

Initiatives such as their new partnership with Siteminder, has caused a host of small hoteliers to ask the question:

Why should I promote my business on AirBnB?

Let’s start by identifying that AirBnB is #4 on the list of startup companies valued at over a billion dollars, so from the beginning, we can really get a sense of the speed of growth and enormity of AirBnB.

Even though occurrences such as the one we are going to talk about are of no secrecy or rarity, we still want to explore the idea and get a better understanding of what this really means for us as well as boutique hotel owners.

What has changed?

Since 2010, small hotels have been able to list properties on AirBnB’s massive platform. As of August 2017, they had around 15 000 hotel listings, but these have been broken up into individual rooms.

Unfortunately, at that time, all of the rooms had to be listed separately.

This slow painstaking process was a source of frustration for many hoteliers.

To the relief of all invested in the industry, AirBnB has partnered with channel manager giant, SiteMinder, to make listing boutique hotels a breeze. This aso allows these small hotel operators more effective ways to promote their businesses on AirBnB.

As we look deeper into this partnership, we can begin to understand a few important factors, changes, and improvements which have been made. Such as :

  • Full room integration
  • Four new listing categories
  • New hires to vet higher-end listings
  • New loyalty programs

These new initiatives have been introduced in an effort to court the hotel sector while bringing increased value to the end consumer.

Meanwhile, allowing small boutique hotels to thrive.

But what do these changes actually mean for small hotel owners?

Full Room Integration

This will allow AirBnB’s customer base to have a real-time connection to availability and room rates.

Four New Listing Categories

These four new listing categories are boutique, vacation home, unique space, and B&B.

This gives hosts “an unprecedented level of detail in the travel industry” to showcase their properties, AirBnB said in a release.

This is in addition to their previous three categories of an entire house, private room or shared room.

New Hires to Vet Higher End Listings

“Not everyone belongs on AirBnB,” Chesky said during a global Q&A session.

AirBnB is looking for Boutique hotels and B&Bs that set themselves apart with unique design characteristics, such as unique spaces, local amenities, local maps with personalized recommendations and local tours.

This introduces AirBnB plus which is their newest premium service.

This entails a 100 point checklist for owners to pass; meanwhile providing photos and assistance in getting their listings up to higher levels.

To find out more about these standards, click here.

New Loyalty Program

“Super guest” is AirBnB’s new loyalty program which is due to be available to the wider community in late 2018.

This will allow its guest to reap benefits all throught the duration of their trip.

Why Does This Matter?

Serious competition to established Online Travel Agents

“Our competition is two companies – Expedia and Booking.com – and I’m extremely excited about what the next ten years have in store,” said CEO Brian Chesky.

Thus AirBnB declared war upon the two OTA giants;

“Our competition is two companies – Expedia and Booking.com – and I’m extremely excited about what the next ten years have in store,” said CEO Brian Chesky. 

AirBnB may very well be the current poster child for the industry but the competition is never far behind. AirBnB currently reigns supreme with a 15% market share compared to 12% for Expedia and 9% for Booking.com.

Exposure to the wider world

This partnership offers small boutique hotels a great opportunity to captivate the ever-growing number of travelers who seek unique, uncommon or even rare hospitality and original local experiences.

Helping many of them to thrive who might otherwise have been drowned in the noise of room sharing, as AirBnB has had over 4 million listings since opening for business in 2008.

Such a big jump in exposure can overnight change the fortunes of many establishments who might have been finding it difficult to keep their doors open.

Identifying your buyer persona

With this new partnership comes a host of benefits but none might actually be greater than your ability to identify who exactly are your buyers.

A statistic often overlooked by many businesses.

Since one of the key ingredients to running a successful campaign on AirBnB is to have great reviews, by closely monitoring the likes and dislikes of those attracted to your hotel, you can make the adjustments to ensure each customer has a 5-star stay.

Also allowing you to better design your marketing campaigns to specifically target persons who are more likely to stay with you.

Earn more with less

Traditional OTAs can charge up to 30%, while AirBnB charges hosts around 3%  commission for every stay.

Should I Advertise and Promote my Hotel on AirBnB?

Besides the fact of commission rates at an all-time low for Hotels using the platform, there are still a few reasons why we would recommend AirBnB.

#1. Transaction of money

The payment platform is a safe and secure way of doing money transactions. Money is first collected by AirBnB and then paid to the host by AirBnB.

#2. Method of marketing

AirBnB has always been about small accommodations and where better to market your small accommodations than with a platform which has millions of active users.

#3. Cheaper

It is inexpensive compared to getting bookings through Expedia or Priceline, due to the low commission fare on each booking.

Potential Drawbacks

AirBnB has slowly been diluting their inventory by adding hotels to the mix. Meanwhile, some believe that this partnership still won’t be a major attraction.

David Cauley, revenue manager at The Guest House in Chicago said, ”Listing on alternative accommodation sites have been pretty good but that revenue is more of a supplement than a driving force.”

He also believes that the easy process of listing is a major downfall, causing great difficulty when it comes to differentiating yourself.

This is where AirBnB plus comes in; it would be best for boutique hotels to take full advantage if they still wish to reap all the possible rewards from AirBnB.

What’s Next For AirBnB

Here at Lights On Digital, we believe that the next move for AirBnB is to integrate more channel management systems for automated connectivity and ease of onboarding more hotels, we expect Sabre Hospitality’s SynXis channel manager to be added in the near future.

Conclusion

AirBnB is an ever-growing platform with an incredible future ahead. “AirBnB’s executives are very very smart to open up the platform to hotels,” said Robert Cole, senior research analyst for Phocuswright.

He referred to the lower commission as appealing but certainly, the platform works best for certain types of hotels.

Are you the owner of such a hotel or B&B?

If so we would love to hear from you in the comment section below on how you would approach doing business with AirBnB?

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