THE THREE MOST INTERESTING THINGS ABOUT AIRBNB’S SUCCESS

By Mark Lomanno

Over the past several years Airbnb has burst onto the lodging scene in a big way. It has done this by offering a completely different type and style of accommodations for lodging guests. Anyone who follows the hotel industry knows the background, but in my mind there are three things that are most interesting with regards to Airbnb’s rapid success.

First, no one really seems to know, with any certainty, how much inventory Airbnb actually offers on any day, week or month in a given market. This makes it very difficult for the hotel industry to measure the impact from a supply perspective and from a demand perspective. How many potential hotel guests are actually staying at Airbnb properties?

Second, whenever I attend a conference or speak with colleagues in the industry about Airbnb, their take on the eventual impact and growth of this concept is frequently to discuss all the things that are wrong with it. The list includes guest safety, homeowner insurance and protection, landlord rules, adhering to all the governmental regulation and taxes. These items are extremely important, in fact, AH&LA has been instrumental in bringing these issues to the forefront with the hopes of getting them addressed. However, Airbnb’s growth and popularity will likely drive eventual resolutions for these issues. So a single-minded focus from hoteliers about what is wrong with Airbnb is not productive. Even with the regulation that will come from the hard work of AH&LA, hoteliers need to focus on how they’re going to deal with the continued presence of Airbnb and other short-term online rental companies.

Finally, and most interesting to me is that Airbnb is truly the first unique structural change the industry has seen since the 1950’s. Certainly there have been innovative lodging products and services created over the years but nothing that lived outside the traditional owner/brand/franchisee world the way Airbnb does. I believe the fragmented nature of how today’s hotel industry operates is not efficient nor as profitable as it could be in today’s digital and social world. Perhaps addressing hotel profitability as it relates to intermediaries is a good place for the hotel industry to start.
Airbnb is here to stay. Rather than fight it, the question is, how do hotels and Airbnb learn to coexist together in this new landscape?