According
to an article published by USA Today, travelers spent $2.4 billion on Airbnb
from October 2014 to September 2015 while they spent $141 billion on
hotels. In comparison to the previous year, although Airbnb's revenue is
only 1.7% of that generated by hotels, it's still a significant growth. There
is no doubt that Airbnb has become a huge threat to traditional hotels' market
share. However, with proper use of new technologies, hotels could still
control the market. So, who will win in the future?
In
this post, we identified two hot issues that could change the leading place in
the future hospitality industry.
Battle 1: Differentiated Experience: Virtual Reality
Nowadays,
travelers care less about the specific supplier and more about the specific
supplier’s experience. When Travelers book through Airbnb, they are actually
seeking a whole new experience. To keep customers from booking accommodations
on Airbnb, traditional hotels need to offer differentiated and sophisticated
service. Virtual Reality has been a heat topic in the tech world for a long
time and is predicted to take over the tourism industry in the next few years
(Tech Times, 2015). Since virtual reality device is now costly and most of the
Airbnb hosts couldn’t afford to buy one, this is an opportunity for hoteliers
to regain their popularity.
What exactly can
hotels offer with virtual reality? According to Abi Mandelbaum, the CEO of
YouVisit, hotels can provide two types of experience with virtual reality. When
guests choose which hotel to stay, a virtual reality tour of a hotel would
allow them to fully experience a property at home, including all amenities. The
photos and videos taken by professional photographers of a hotel usually have
more visual effects on guests than photos taken randomly by Airbnb hosts.
Moreover, when guests arrive to the hotels, they are provided with a on-site “VR
Concierge”, which acts as a city guide. When guests put on virtual reality
headset, they could have a lively virtual tour of local restaurant and
attractions. One hotel group already has set itself apart as a leader in virtual
reality experiences. (Hospitalitynet, 2015).
Source: Digitaltrends.com
Battle 2: Business Travelers
For a long time, Airbnb has been an interesting solution for price and time
sensitive travelers while now they could also share the pie of business
segments with traditional hotels. It is now popular for long period business
travelers who want to have “SOHO”
comfort even when they are traveling (Kenontek.com,2014).
However, this is not saying that Airbnb has no weak point. When it comes to
group of business travelers, the living condition will not be suitable for
everyone. It’s difficult for more than 5 travelers to share 1 bathroom or
bedroom for more than 3 or 4 night, Certify’s CEO, Robert Neveu says (USA
Today, 2016).
From what we've discussed above, in our opinion, despite of this emerging peer-to-peer market, traditional hotels still have a strong leadership position in the next few decades. The important strategy for hotel is to constantly deliver differentiated services and added value to their customers.
Sources:
Reference
article:
Sources:
Qingyi LI & Anastasiia MOSKALENKO
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