The condos next door, the apartment complex downtown, the warehouse down the street -- hotels' biggest competition is no longer limited to other hotels. Patrick Mayock, Senior Director of STR Research and Development, welcomed hotel professionals at Cvent CONNECT to his breakout session, “Why the Biggest Threat to Your Business Isn’t Other Hotels.” He opened with the question, “What exactly is the sharing economy?” If you ask one hundred people, you’ll receive one hundred different answers. This peer-to-peer economy, which was once dedicated to travel only, now applies to and touches every aspect of our lives.
2 in 10 travelers have stayed in a vacation rental as an alternative to a traditional hotel/resort during the past two years, and 40% have expressed interest in doing so.
But the Sharing Economy isn’t new. The blurring of lines between personal and professional in the provision of commercial services has been going on for centuries but only now are people taking notice. Companies like HomeAway, were never considered a threat to travel executive, have now grown to over a million listings in 190 countries over the course of a decade. As an industry, we’ve missed the signs of emerging companies and are now scrambling to keep up.
Hotel professionals need to pay attention because the peer-to-peer economy is becoming mainstream commercial activity. 2 in 10 travelers have stayed in a vacation rental as an alternative to a traditional hotel/resort during the past two years, and 40% have expressed interest in doing so. Led by millennials, people are shifting their mindset on how they view travel. They are seeking out experiences and authenticity versus a hotel chain that provides the same quality of service regardless of location.
The Sharing Economy is a crowded industry with massive potential. Made up of 16 categories and 42 sub-categories, this industry’s market cap is skyrocketing every year. Airbnb has earned 25.5 billion in market cap, which trumps some of the most established hotel brands in the industry. So what can hoteliers do? Patrick offers these tips to leverage the rapidly changing environment:
- Provide third party operational support (ie. housekeeping)
- Invest in extra distribution
- Borrow technological best practices
- Increase transparency and authenticity
- Buy your way in
Traditional hotels and resorts can find success amidst the change, but it’s important that they take an honest look at what’s happening in the industry to become familiar with the consumers leading it.