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Airbnb Is Forcing Hotels To Improve Their Offerings

Airbnb Is Forcing Hotels To Improve Their Offerings
3 min read

Airbnb Is Forcing Hotels To Improve Their Offerings

While Airbnb has certainlyrevolutionised the travel accommodation industry and is now a major player, hotels aren't necessarily dying. They have just had to adapt and change how they play the game.

By now, nearly everyone knows that Airbnb has revolutionised the travel accommodation industry. The online startup from San Francisco changed the entire game a decade ago when they began facilitating home and room rentals by individuals and families, and these days short-term rentals in the space-sharing market are big business. In fact, Airbnb is now one of the largest accommodation providers in the world, outpacing most major hotel chains. And the company’s growth doesn’t appear to be slowing down anytime soon.

But this massive growth by the space-sharing industry doesn’t mean that traditional hotels and B&Bs are on the way out. While Airbnb is definitely a major player, hotels aren’t necessarily dying. They are just having to change how they play the game— and Airbnb is one of the main reasons they are having to do so.

Airbnb has forced traditional accommodation providers to improve their offerings through a variety of creative means in order to compete with the space-sharing alternative. With hotels losing out on traffic that used to come with little effort, they are having to diversify and look for new markets to tap. One way they are doing so is using luxury travel agents to bring in high-end clients. By catering to premium travellers, average hotels and B&Bs are tapping a market that has historically been the territory of luxury service providers such as five-star hotels.

Of course, Airbnb is also looking to tap this premium market, with new categories such as Airbnb Plus. As the online short-term rental extends its own reach, many hotels and other traditional accommodation providers are adopting an “if you can’t beat them, join them” attitude. These hotels are listing rooms and suites on Airbnb, and in doing so regaining much of the audience that they originally lost to the budget travel alternative. Of course, they are still competing against homes and rooms that are available for rent on Airbnb, but a more competitive market is better than no market at all. And Airbnb is happy to welcome hotels and B&Bs into the fold. These traditional options have been listing rooms on Airbnb for years now, but only recently has Airbnb started offering specific categories that cater to the hotel market.

Ben Korman from AirbnbnbHandsFree notes that one issue traditional accommodation providers have historically complained about in regards to Airbnb is what they see as an unfair taxation schema, in which hotels have to pay heavy VAT taxes and other expensive overhead, while private homeowners are able to circumvent these costs and rent their rooms with little to no oversight or taxation. Hoteliers claim this lack of overhead gives Airbnb listings a major advantage when it comes to pricing and attracting guests. But over the past couple of years, local governments have started to create ways to tax Airbnb rentals, which is somewhat levelling the playing field.

The future of the accommodation industry is yet to be written, but it is obvious that the new kid on the block has become a major, established player, and that Airbnb is forcing traditional accommodation businesses to step up their game. As hotels and B&Bs rethink their business plans and marketing strategies, Airbnb property managers should also pay close attention to how the industry is evolving. Airbnb’s recent growth and expansion to new niches have provided a lot of new opportunities for property managers to increase the scopes of their businesses and service offerings. But the creative growth of the hotel and B&B industries can also serve as both motivation and inspiration for smart Airbnb property managers, who are always on the lookout for ways to stand out from the crowd and help their clients better leverage their Airbnb rentals.

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