Is Airbnb Becoming a Threat to Your Room Block?

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Oh that Internet! It's been disrupting everything from journalism to bookstores to travel agents, so it shouldn't be surprising that new person-to-person housing agencies like Airbnb and even smaller sites like Flipkey (and about 99 more similar companies, according to Forbes) are starting to catch hoteliers' attention. In fact, RevPar Guru's CEO Jean Francois Mourier calls Airbnb the hotelier's invisible enemy in a press release on Hotel Online.

As he says, "Many hoteliers assume that only backpackers or very budget-conscious consumers will consider using these sites, but they would be incorrect. In fact, AirBnB lists and secures bookings for many luxury properties including apartments, villas, mansions and castles (there are currently 600+ listed on the site), private islands and, in 2011, even the entire principality of Liechtenstein!"

Could your headquarters hotel lose your block's room nights to people booking around the block to crash at a local apartment? I think it's a distinct possibility. Airbnb more than doubled its listings in 2013 to 300,000 worldwide, served more than 4 million guests, and is in line to become the world's largest hotelier in 2014, overtaking even the likes of InterContinental Hotels Group and Hilton Worldwide.

And while conference-goers aren't likely to be looking to stay in a treehouse or a yurt, an apartment around the block where an entire group can stay at a reasonable cost could be a contender. I think the time is ripe for planners to add Airbnb and similar sites to the list of things like room block pirates and online booking sites that could potentially become a part of the attrition problem. And hoteliers, I'd heed Mourier's call to monitor rates from these sites, enhance services and make stays more personalized, and use the best tools you can find to manage your data collection, analysis, and pricing.

Update: Here's one person's opinion on the topic: Is Airbnb Becoming a Threat to Your Room Block?

Discuss this Blog Entry 7

on Jan 7, 2014

Based on my experiences looking for accommodations in San Francisco over the last few months, I think airbnb and allied services will force significant changes in the hotel industry. Perhaps some business travelers will still prefer hotels, but for those of us who want more choice in where we stay and the option to prepare occasional meals instead of eating out three times a day airbnb is a winner.

I have booked airbnb studios in areas where there were few or no available hotels or traditional bnbs at very reasonable rates. The service is well designed, feels secure, and you can read reviews of accommodations and hosts in advance and clear up details before committing.

on Jan 8, 2014

I haven't used it yet, but will think about it for future vacation trips. But there's a lot to be said for staying at the HQ hotel for a conference, beyond supporting the organization--all those opportunities for serendipitous conversations!

on Jan 14, 2014

Groups have to start enforcing their attendees to BOOK INSIDE THE GROUP BLOCK at the hotel. The meeting planner/contact can either INCENT the attendees for booking inside the block ie: reimburse them a $ figure on their room rate, VIP amenities, printed handouts, flashdrives with presentation, etc. be creative. Hotels must hold groups to attrition:
The Hotel:
• Holds a certain number of guest rooms at a discounted negotiated rate that may not be sold to other groups throughout the contracted period.
• Holds enough meeting and banquet space to accommodate the group’s needs for said events.
• Makes available a discounted dinner pricing.

The Association:
• Commits to attendees paying the negotiated rate and meeting the revenue for those guestrooms.
• Commits to attendees paying the food and beverage pricing and meeting those revenues (dinner).
• Commits to liquidation damages should the group cancel.
• Commits to paying attrition fees should the group not meet the “committed revenues”.

Hotels cannot book another piece of business short term or "after the event has passed" to make up for shortfalls of a group. The tides have turned to a sellers market vs a buyers market in the group business. Also, shortchanging a hotel may seem like a good idea at the time, however, this doesn't allow for the hotel to update the hotel (due to reduced profits), cannot afford to hire qualified employees, etc. Which will affect your group and others down the road.

on Jan 14, 2014

Although AIrbnb is a ver cool and clever idea, I doubt that it will put much of a dent in a corporate or association room block. The type of accomodations is more for a vacationer than the convention goer or most business traavelers.
However, it might not be a bad idea to have an additional drop down box to check on your registration form. That box should show the options for hotels/ arbnb/, b&bs, aparmtents, etc.. Thus the event organizer will know who and how many are not booking within the room block. A bit more work for the planner, but may be worthwhile.

on Jan 16, 2014

I'm a huge AirBnB fan, both as a host and as a traveler.

When traveling, I only stay in a hotel if I can't find an AirBnB apartment nearby. My biggest motivation is food: I'm tired of being charged $20 for two eggs and toast at the hotel restaurant. I feel like I'm being held hostage. Instead, I buy a dozen eggs, a loaf of bread, some fruit and make myself what I want, my way, in my own kitchen.

Of course, the second motivation is cost: it typically costs 1/2 to 3/4 to stay in an apartment or room of my own vs a hotel.

As a host, we've been renting out my mother-in-law apartment for the last few years through AirBnB. People stay anywhere from 3 nights to 6 weeks. It covers the whole mortgage on the house and then some.

on Jan 16, 2014

I'm a huge AirBnB fan, both as a host and as a traveler.

When traveling, I only stay in a hotel if I can't find an AirBnB apartment nearby. My biggest motivation is food: I'm tired of being charged $20 for two eggs and toast at the hotel restaurant. I feel like I'm being held hostage. Instead, I buy a dozen eggs, a loaf of bread, some fruit and make myself what I want, my way, in my own kitchen.

Of course, the second motivation is cost: it typically costs 1/2 to 3/4 to stay in an apartment or room of my own vs a hotel.

As a host, we've been renting out my mother-in-law apartment for the last few years through AirBnB. People stay anywhere from 3 nights to 6 weeks. It covers the whole mortgage on the house and then some.

on Jan 20, 2014

ctoby, I agree that hotels and event hosts need to have both more carrots and more sticks to incent people to stay in the room blocks, but inevitably there will be those who go around the block, due to corporate travel rules (many companies have deals with hotels and employees must stay at those hotels), or individuals who wouldn't be able to afford to stay at the HQ hotel despite the good-faith negotiations of the meeting planner. I think some of the latter may be ripe for Airbnb and similar services, and also some exhibitors who chafe at the idea of being stuck in a not-so-great hotel far from the meeting's site.

Pat, I love your idea of a drop-down box so planners could at least get a better idea of where those who are defecting from the official block are going. Without knowledge, you have no way of thinking of how to entice those folks back into the block.

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