There’s a snake in my boots! Airbnb is no longer underrated

The Airbnb backlash is well under way, with Guardian writers in the UK complaining that it’s expensive and sometimes there are snakes in the basement.

We won’t know the possible impact of The Guardian on the group’s revenue until Airbnb’s results next month, but its average rates have been rising, much like the rest of the accommodation sector. But when your selling point is how cheap you are, suddenly ‘there’s a snake in my boots’ becomes more than just a line from Toy Story. 

Airbnb is not all price, of course. But it’s a lot price and the serviced apartment sector has been catching up in terms of growth and consumer profile. Hotels have also been having thoughts about making more flexible products. Some small thoughts, anyway.

With this in mind, we observe Airbnb’s fun time with the All Party Parliamentary Group on Financial Markets and Services (not the All-Party Parliamentary Group for Tourism, Leisure and the Hospitality Industry, where it didn’t come out massively on top in its report on the sharing economy*) where it was calling on mortgages to be more flexible to allow people to bring in cash through the sharing economy. There really is no stone unturned at Airbnb.

All Party Parliamentary Group on Financial Markets and Services chair Bim Afolami MP said: “Allowing homeowners the flexibility to occasionally let out their property as a means of earning some extra income is a clear win for mortgage providers and could provide an important lifeline to those who might be struggling in these difficult economic times.”

“Banks and building societies can follow the example of lenders who are offering flexibility to their customers and allowing them to take up the benefits of homesharing.”

Not to mention the benefits to homesharing in terms of extra inventory.

But while Airbnb works the angles, is the hotel sector likely to benefit from its slither from grace? Will we see consumers checking hotels before they check Airbnb? The drip is likely to be marginal, but it seems to be growing. 

Accor, through its OneFineStay product, has refused to participate in the sharing economy unless it could get a chunk of room nights per property and that property was well fancy. Marriott’s product is also luxury driven – earlier this month the group announced that it was rolling in the Evolve portfolio. 

Can Airbnb compete in the luxury segment with Marriott? No. It has no loyalty programme and it can’t guarantee levels of service. All it has is coverage. 

It is the budget and economy sector where will we see more motion. Last week we saw Whitbread’s latest results (and Alison Brittain’s last) and yes, rate was growing there too. But there were fewer snakes and that old favourite, brand consistency. The thrill of Airbnb is past for many consumers.

In this time of Davos our minds return to the previous CEO of IHG, Richard Solomons, who told Davos that Airbnb was no concern of his. He only wanted the business market, you see. Well now – and no discredit to Solomons – the market is all about leisure. But luxury leisure. Until Airbnb learns to compete there – and no doubt it will have a crack – hotels have a chance. 

And with higher rates, Airbnb might have trouble raising the volume business it needs. 

 

 

*although the report opens with a comment from then-PM Theresa May: “The British people’s decision to leave the European Union creates real opportunities for growth and we will work in close partnership with the tourism industry, to ensure it continues to thrive as negotiations on the UK’s exit progress.” And if that’s not funny then we can’t help any more, leave your keys in the lockbox. 

 

Image: Marriott getting pet friendly at Homes and Villas

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