Airbnb and Marriott International, the biggest names in
their respective home-sharing and hotel industries, made waves last week when
the former unveiled a hotel-inspired type of accommodation and the latter
launched a vacation-rental platform.
Both moves reflect the continued crossover between private
accommodations and traditional hotels.
Airbnb's new apartment-hotel will take up 10 floors at 75 Rockefeller Plaza, a commercial building in midtown Manhattan.
"These actions further underscore a convergence that we're
seeing happen in hospitality," said Daniel Guttentag, assistant professor
of hospitality and tourism management at the College of Charleston's School of
Business and director of the department's Office of Tourism Analysis. "While
I don't think that we'll ever see Airbnb and Marriott become one and the same,
if you were to create a sort of Venn diagram of short-term rentals and hotels,
the area of overlap just seems to expand with each new development on both
Airbnb said last week that it had partnered with New York
City developer RXR Realty to create apartment suites that combine "the
features of a luxury hotel with all the comforts of a home." The inaugural
apartment-hotel hybrid concept will take up 10 floors at 75 Rockefeller Plaza,
a commercial building in midtown Manhattan.
Meanwhile, Marriott's new Homes & Villas by Marriott
International platform builds on the success of the group's short-term-rental
pilot program in Europe, which launched last year under the Tribute Portfolio
Homes brand. The Homes & Villas portfolio grows Marriott's vacation-rental
footprint from a couple hundred homes in London, Paris, Rome and Lisbon to
around 2,000 properties in more than 100 markets throughout the U.S., Europe,
the Caribbean and Latin America.
Lorraine Sileo, senior vice president of research and
business operations for Phocuswright, agreed that Airbnb's apartment-hotel and
Marriott's headway into short-term rentals further blurs the lines of
"Going forward, we're really just going to think of
everything as lodging," said Sileo. "Just as we have segments like
all-inclusive hotels, resorts, boutique hotels, we now have a segment for
apartment and home rentals joining that list. But it has all fallen under the
umbrella of lodging, and we no longer need to separate things according to
whether it's private accommodation or hotel."
In addition to tapping into category convergence trends,
both Airbnb and Marriott appear to have recognized growing demand for a more
standardized and service-driven type of vacation-rental stay. Few niches within
the short-term rental sector are growing as quickly as serviced
apartment-hotels, with startups like Sonder, WhyHotel and the Guild, among
others, attracting significant venture capital of late. In April, San
Francisco-based apartment-hotel startup Lyric made headlines with a significant
investment from Airbnb.
"For so long, the whole point of home-sharing was to
get something unique and different everywhere you go," said Makarand Mody,
assistant professor of hospitality marketing at Boston University's School of
Hospitality Administration. "But now, if you want to scale and still keep
some consistency, adding a service element and having things like a digital
concierge or staff is becoming important. You can no longer just be a platform
that's just distributing these products; you have to have some sort of a service-focused
proposition attached to your product if you want to get people interested."
For Airbnb, the service element will be central to its 75
Rockefeller Center accommodations, where guests will have access to traditional
hotel amenities like a lobby with check-in and checkout services, a business
center and a restaurant and bar.
Likewise, the Homes & Villas portfolio features
professionally managed rentals, with each property vetted by Marriott and
guaranteed to include 24/7 property management, high-speed WiFi, premium linens
and amenities and child-friendly items on request. Importantly, members of
Marriott's Bonvoy loyalty program can earn and redeem points when booking a
Homes & Villas accommodation.
A heightened level of service and standardization can also
help lure travelers who haven't yet made the leap to short-term vacation
"For Airbnb and Marriott, this fills a gap for people
who maybe aren't really ready to rent someone's home but would be interested in
doing something a little more managed or branded," Sileo said.
As Airbnb and Marriott expand their business models, they
are confronting new challenges.
The launch of Homes & Villas adds around 40 leisure
destinations to Marriott's footprint, but the company could face backlash in
markets in which Marriott-flagged properties are already present.
"If Marriott ends up having a large inventory of Homes
& Villas in destinations where they have other Marriott hotels, those hotel
owners may not be too happy with Marriott now offering rentals there, as well,"
Mody said. "For the longest time, the hotel industry was up in arms about
home-sharing, and now that they're starting to completely embrace it, owners
could potentially be confused or upset."
Airbnb, meanwhile, is already facing an increasing level of
regulatory pressure in many top urban destinations. Apartment-hotel hybrids in
commercial buildings could help Airbnb hedge against ongoing legal crackdowns
in major cities, joining efforts like its recent acquisition of the booking
platform HotelTonight and a growing inventory of boutique hotel and
bed-and-breakfast listings. Whether those moves are enough to offset negative
impacts on Airbnb's core short-term-rental inventory in key cities, however,
remains to be seen.
"I think Airbnb's strategy absolutely reflects the
increasing heat we're seeing in markets like New York, London and Paris,"
"All these big cities around the world are cracking
down on short-term rentals and becoming more effective in their crackdowns. And
all of this ties back to Airbnb's coming IPO and this swirling uncertainty as
to what degree Airbnb can withstand all these pressures."
As Airbnb veers further toward becoming a hotel-oriented
platform, it could also put the company's unique and highly successful
branding, which has become synonymous with home-sharing, at risk.
"Airbnb is sort of walking a fine line here,"
added Guttentag. "Airbnb is a very powerful brand, and it's associated
with this idea of cool, local and authentic travel. But as they venture more
and more into the hotel space and become more hotel-like, one has to wonder how the brand might evolve in
the minds of consumers in the next 10 years.
"At the end of the day, both the hotels and short-term
rentals are trying to adapt to some of their weaknesses, and it'll be
interesting to see how it plays out."