The Achilles Heel of AirBnb
AirBnb has been one of the great success stories — perhaps the single greatest — of the hospitality industry in recent years. Countless blogs, business journals and news programs have sung its praises whilst many conference hours and many column centimetres have been devoted to demonizing its impact on the hotel industry.
Much of the commentary revolves around a few main points. Travelers suddenly have access to a whole new dimension of traveling. They’re able to move effortlessly in and out of local neighborhoods, staying in real apartments and houses, enjoying a heightened sense of local people and culture. In some cases the host lives on site (although this is becoming few and fewer), offering an instant connection and support structure. No longer is the traveler confined to lodging that is specifically designed for travelers. The share economy opens up new possibilities of friendship, networking and integration between people and places.
But AirBnb is no longer a hip new concept. Like Uber, it quickly became a business juggernaut. There are some 100 million users worldwide and some 640,000 active listings. The company’s worth is $30 billion today — around $7 billion more than Hilton Worldwide.
It’s no wonder, then, that many experienced AirBnb users report an upward trend in rates. In keeping with the firm’s lightening-fast ascent, hosts have become more business-minded. It’s now commonplace to invest in a property specifically to list it on AirBnb, using that income to pay the mortgage whilst blocking dates on the calendar for personal use. There are still a lot of hosts out there who offer cheap private rooms, and are focused more on expanding personal networks — but in general, the platform is more formalized than it was in early days. As you might expect, there are entire web sites (e.g. airdna.co and insideairbnb.com) that provide detailed analytics for AirBnb property owners and even guests. It makes sense that when a company becomes more valuable, it receives more analysis and scrutiny.
The main storylines about AirBnb (although well-marketed and often legitimate) have begun to show a few cracks and vulnerabilities. Issues of local legality, disgruntled neighbours, and safety standards have come to the fore. With massive success comes an undercurrent of skepticism.
One of the most interesting new topics is related to the experience itself. AirBnb has been touted from the beginning as way to ‘plug in’ to local neighborhoods throughout the world. Indeed, one of their tag lines is “Belong Anywhere.” But it’s not always as simple as booking a flat, moving in, and making deeper connections to people and places. In cases where entire homes are rented, guests are sometimes thrust into neighbourhoods with no knowledge of how to navigate them. A beautifully finished property with good photography might turn out to be far removed from public transportation and local attractions. Meanwhile, neighbours may not appreciate the constant flow of strangers in and out of apartment buildings and houses in the area; this feeling of skepticism can detract from the guest’s experience of connectivity and integration.
In cases where the host lives on-site, professionalism has been known to fluctuate significantly. A recent analysis by the American Hotel & Lodging Association suggests that “superhosts” — a designation created by AirBnb for hosts who have ample experience, strong response rates, very few cancellations and high numbers of perfect reviews — account for a stunning 40% of the company’s revenue. But there are also many hosts who find themselves unable to deliver a professional experience on a daily basis. Hosts are people with moods, likes and dislikes, and their own set of values. Personal chemistry is a definite (although largely unmeasured) factor in the guest experience.
If you talk to enough people who have used AirBnb in apartment buildings, you will also hear anecdotal stories about guests being stopped and questioned by reception and security people. It’s not uncommon to feel uncomfortable and out of place. The blurring of lines between residence and “place of lodging” opens many doors — and creates many misunderstandings.
This all amounts to a very simple movement for the hospitality industry. Hotels want to offer more connection to the community. Co-working spaces, reinvented common areas, local products and experiences. Is it possible to offer more of these things while maintaining the natural high ground of hotels? Hotels must remain professional and standardised; that’s what sets them apart from the share model. But hotels increasingly must learn how to be both personal and impersonal. When they better connect their guests with local communities, they find more success in today’s hospitality climate.
We may find in coming years that hotel managers and AirBnb hosts (both of whom have a vested business interest) are more and more alike. Each seeks to minimize its weaknesses by focusing on the others’ strengths.
The Achilles Heel of AirBnb is the promise it makes (local integration), but can only sometimes keep. Hotels make a different promise (professionalism), and also sometimes fail to keep it. What is the proper meeting point between local integration and global professionalism? Answering this question is in the interest of AirBnb hosts as much hotel managers. The question is: Who will answer it best?
For further industry insight, please follow the links below.