Is Airbnb a friend or foe to hotels?

The world of direct bookings has been buzzing of late. We've had a huge acknowledgement from Expedia about how direct booking campaigns have shifted the balance of power between hotels and online travel agencies and data from Phocuswright showing that hotels are very much holding their own against them too.

But perhaps the most significant development came from Airbnb and SiteMinder. The homestay site struck what is described as a “global hotel technology partnership” with Siteminder, creator of a cloud platform for hotels and a Triptease partner.

As part of the deal, Airbnb and Siteminder have jointly developed technology that allows boutique hotels and B&Bs to have a “real-time connection of room rates and availability between their property management system and Airbnb”.

Airbnb, which already allows some hotels to list on its platform, says the commission for hotels would be 3-5%.

We wouldn’t be surprised if those numbers get more than a few pulses racing. And rightly so given OTA commissions can be as hefty 20-25%. But let’s take a minute and think about what this could mean for hoteliers in the long run.

Airbnb becomes a friend to hotels…

Hotels, including chains like Best Western, are increasingly seeing Airbnb as a potentially positive influence on the market in that it could increase competition for OTAs. If that idea and their new partnership with SiteMinder grows Airbnb’s hotel business, there’s a chance that the tech unicorn sets a new, low benchmark for distribution costs, answering many hoteliers' prayers.

You can even imagine that some hotels could use the Airbnb tech, collecting bookings via the site rather than a booking engine. This might streamline processes and costs for hotels, again a bonus for anyone looking to stick to tight budgets, though there’s the obvious drawback of losing ownership of the guest relationship.

(It’s also worth asking what the restrictions on Airbnb in various countries or cities might mean for hotels based in those locations.)

Airbnb becomes a foe...

We have to look at Airbnb’s inroads into the hotel market in the same way we’ve been looking at Airbnb all along — what will it do to supply and demand? They may increase supply on your turf by 30%, but that’s only worth celebrating if demand rises by the same amount. If it doesn’t, then they are likely to be taking demand away from you.

If they are encroaching on demand we also have to consider that their supply is not necessarily paying local hotel or other taxes, potentially putting hotels at a disadvantage.

We’d love to know which scenario you see playing out, or if you have a theory we haven’t yet considered. Let us know at content@triptease.com.

In the meantime, if you are interested in Airbnb, OTAs and the other competitive forces in the market, you might want to check out some of our earlier posts.

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About The Author

Clare is Content Manager at Triptease. She'll be updating you on industry news and relaying our exclusive research and special reports. She'd love to know what you want to read so please get in touch!