The Hospitality Industry — Do Not Disturb?
It’s not hard to see why traditional hoteliers, industry regulators and even city governments are becoming increasingly nervous about the growth of peer-to-peer accommodation sites.
At a time when some claim collaborative consumption and the sharing economy will become this century’s dominant economic mode, Airbnb is held up as a textbook example of how digital platforms can disrupt incumbent business models and, in this case, seemingly circumvent the strict rules and regulations that govern the hotel industry.
Now I absolutely love hotels. And as soon as I can find £200 million, I’m going to open one of my own, but I do find it hard to have much sympathy for a sector that’s been so complacent about better serving its customers. You don’t have to be an innovation consultant like me to figure out that complacency is a pretty common precursor to disruption.
Exhibit A: It’s still possible to read a variety of depressing threads on hospitality industry forums about whether or not free wifi should be offered as standard.
I appreciate that providing online access is still a significant revenue stream for many hotels, and no-one is going to voluntarily forsake it without an adequate alternative. But if a source of income is drying up before your eyes (with guests increasingly able to create their own wireless hotspots or go down the road to the competition who are giving it away for free) the imperative to come up with an alternative should surely be more urgent. If hoteliers can actually find anyone still making a living in print publishing they should perhaps ask them for a few tips while they still can.
Exhibit B: The main objection to these sites is that they flout regulation and create ‘illegal hotels’, but I’m pretty sure extortion and discrimination are illegal too.
I recently stayed in a hotel where a card on top of the minibar said “For your convenience, this minibar has been fitted with a sensor so that any items removed will be automatically added to your bill. Should you require space in the minibar for your own items we will be happy to clear it for you at a cost of $20.”
Leaving aside the flagrant abuse of the notion of “my convenience”, let’s just reflect on this for a second. If I simply lift an item out (to maybe look at the flavour or the nutritional information) I’m going to be charged for it, irrespective of whether I actually consume it or not. And if I want the thing emptied, I’m going to have to pay $20 for the privilege of not consuming a single thing. Let’s suppose I have an infant or am diabetic; I am effectively going to be fined/taxed/robbed blind (call it what you will) for needing to chill formula milk or insulin. If there aren’t already laws against this I feel there should be.
Exhibit C: I recently met a senior executive from a global hotel chain that had not even heard of Airbnb.
This strikes me as akin to working for a bank and not having heard of Bitcoin, or working for working for Prada and not having heard of Primark. But I digress.
The point is, big chains probably don’t have that much to fear from Airbnb yet, despite the fact that many are actively trying to get it shut down. Yes the price-point is much lower than your typical hotel room, but there will always be those who seek out trouser presses, concierge, 24 hour room service and the recourse that health and safety legislation is intended to provide. And the kind of money Airbnb is making at the moment is probably little more than a rounding error to the big guys.
What strikes me as odd is that they’re not more interested in what Airbnb tells us about trends in guest attitude, behaviour and what they expect from travel experiences. “Travel like a human” and “live like a local” are the slogans of this movement but are still anathema to the way in which so many of the big brands operate. It doesn’t feel particularly human to charge me for so much as picking up an item in the minibar. Nor do I feel like a local when I wander into the lobby of a hotel in Barcelona only to discover it has exactly the same carpets, wall art and bar menu as its counterpart in Beijing.
So no, I do not feel sorry for the big hotel chains. The people I really feel sorry for in the wake of Airbnb’s ascendency are the old-school bed and breakfast owners. Those conscientious souls who diligently adhere to the local star ratings system and declare all income to the relevant tax authority, only to watch their neighbours coin in the (undeclared) cash whilst avoiding calls from clipboard-wielding inspectors.
Which is why, much as I love Airbnb (and have used them several times with great success), there will always be a place in my heart for a more traditional version of hospitality, as championed by my personal favourite Sawdays and many others.
In time, who knows what will become of Airbnb and this whole peer-to-peer accommodation movement? Perhaps the big boys will prevail and they’ll all be shut down. Or they’ll be forced to succumb to greater regulation in order to better protect users. Or perhaps more B&B owners will reposition themselves as amateur set-ups and use Airbnb as their platform, as a small number are starting to do anyway. And then there’s the intermediary layer that’s emerging around this industry — people running services to help hosts manage reservations or take care of the meet and greet, for example. Innovation within the innovation if you will.
At this point, the jury is still out. All that can be said for sure is that Airbnb has successfully lit a rocket under the backside of an overly complacent industry, long overdue some disruption.
A hospitality revolution is indeed here; it just knocked very politely and then let itself in anyway.
Thank you to those of you that have read this piece, recommended it and/or suggested further reading. This rant originally appeared on my blog (https://halfboard.squarespace.com) so if you fancy a trip over there to see what else I witter on about, I’d be delighted to see you…