Airbnb and Hyatt: bend me, shape me?

In the interests of full disclosure, this column is being written in a property rented through a well-known sharing economy platform. In the Dordogne. With a pool. One might be vulnerable to accusations of smugness and the risk of burglary if a significant proportion of the hotel sector was not within 10 miles of where these words are being typed.

But the sector is not just canoeing up and down the cover to justify its pancake dinner at L’Increpide. Results season continues to rollick along and deals have got the jump on the anticipated September frenzy.

But first to results and back to the sharing economy, where Airbnb has been chatting to analysts and overusing its annual allowance of the world ‘flexible’. Everything at Airbnb is now flexible. Dates, locations and guests are expected to flow suit. 

CEO and co-founder Brian Chesky said: “Flexibility is now a permanent part of travel.We have to believe is that Zoom is here to stay. And if we believe that Zoom is here to stay, we believe that flexibility and remote living is here to stay. And therefore, it’s pretty obvious that what would happen is that we are going to continue to see more and more longer-term stays. And I think this is going to help us smooth out our seasonality over the coming years to come.”

There are a number of leaps being made here, reminding this columnist why they’re not allowed to talk about science. ‘This then that then this then that’ is how one can end up injecting bleach or fearing falling off the horizon. While Brian – and I think we can call him Brian, given his lack of tie wearing – is correct to embrace change, flexibility and its basis in Zoom may be lacking a nuance or two. 

We know, as consumers, that we don’t want to embrace the 24/7 Zoom of Lockdown 1.0. It would be nice to think that there are enough flexible guests to mean that seasonality can be smoothed out, this calls up Gordon Brown’s ‘end to boom and bust’. Sounds great, but can it be? Airbnb says that “40% of our guests have flexibility about where or when they travel”. It would be good to know how that flexibility is gauged. Dependent on what passports we hold and how well we get on with our colleagues, a significant number of us have choice, or flexibility on how we travel. Even during the pandemic one might hope this was more than 40%. But enough to smooth out seasonality?

This is pedantry, which is cheap and easy to indulge in with Airbnb. Particularly when one is distracted by pancake fillings. The key point of Airbnb is that its watchword has always been flexibility, whether the guest is or not. It bends to the sun, wherever it shines and that has always been its strength. 

Witness these two comments from CFO David ‘Dave’ Stephenson: “The big part of our strength has been in nights with less than 300 miles. That continues to be one of the strongest parts of our business.

“And then, in Q2, we saw strengthening where one of the faster parts of growing was growing of 300 miles and longer. And we saw an increase of urban nights booked. And so, some of those trends have started to pick up to more kind of historic levels. So, I’m very bullish on the long-term view of our business overall.”

Things are great for Dave because Airbnb has properties less than 300 miles away. AND more than 300 miles away. What the analysts are interested in is whether supply can be as flexible and for this, one wonders whether Airbnb will, at some point, have to be more proactive and return, say, to the days when it invested in development. Because as people think about city centres again, the days of local authorities being a bit pissy about sharing are likely to return too.

But in the meantime Airbnb is following Marriott’s lead and looking at guest travel insurance and – hosts and guests beware – promoted listings.

Back to the more traditional and Hyatt has announced a great big proper deal, acquiring Apple Leisure Group for a reported $2.7bn and increasing its footprint in Europe by 60% in the process. Regular observers of the sector will recall that Hyatt missed out on NH Hotels Group and has kept its cap in the European ring since and that, in 2018, Apple signed a strategic alliance with NH Hotels, the same year Hyatt was eyeing NH

The deal works all over the place for Hyatt, adding over 33,000 rooms operating in 10 countries plus a tasty pipeline, and all asset light. 

Mark Hoplamazian, president & CEO, Hyatt, said: “The addition of ALG’s properties will immediately double Hyatt’s global resorts footprint. ALG’s portfolio of luxury brands, leadership in the all-inclusive segment and large pipeline of new resorts will extend our reach in existing and new markets, including in Europe , and further accelerate our industry-leading net rooms growth. Importantly, the combination of this value-creating acquisition and the $2 billion increase in our asset sale commitment will transform our earnings profile, and we expect Hyatt to reach 80% fee-based earnings by the end of 2024.”

Unlike Brian and Dave, Hyatt knows where it is going and the only flexibility required from guests is that they can cope if the cocktail menu includes some variance to accommodate locally-sourced delectables. Change is good, but be gentle with our pandemic-ravaged souls. 

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