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.
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 sides."

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 categorization.

"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 rentals.

"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," Guttentag said. 

"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."

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