Airbnb's Impact in the Hotel and Serviced Apartment Industry
Airbnb - friend or foe?
There has been much in the news about Airbnb since its inception in San Francisco in 2008. Stories ranging from some amazing stays in amazing places, to those of perhaps less of favourable situations with property being damaged, visitors outstaying their welcome and other such tales – none seem to have blighted Airbnb. They now hold an enviable position as part of the growing sharing economy, which is causing many to scratch their heads and wonder how they can compete.
Working with both serviced apartment providers and hotels, we’ve experienced this journey of changing landscape with our clients, during which we’ve discovered that there are in fact several positive aspects to this new platform. Before we get started - most of the following article is focused on serviced apartments – however if you’re a curious hotel operator - the last section on useful tips is very relevant to you as well!
Here’s what we’ve found from our experience:
Airbnb is helping to grow the pie
Like never before people are travelling, and in particular, we expect to see significant growth within the private accommodation sector, which according to the following recent report by SIG, will represent some 19% of the overall pie of global room bookings in 2018 - take a look here...
Part of this growth has been attributed to Millennials and their travel habits. Their eagerness to explore new horizons and to experience the true essence of a country on a low budget, has helped lead to this growth of tourism and the sharing economy. There is even some evidence to show that this trend is spreading with both older and younger generations following their lead. So, overall there is more pie to compete for as more travellers explore our planet!
Millennials, and even other generations, are trying Airbnb - and some are thoroughly enjoying the experience, although as many new experiences, there can be both pros and cons… As they try this new platform they seek to improve their experience and spend their money more wisely by having facilities such as cooking and cleaning included. At the same time, habitual hotel users are also trying Airbnb with mixed reviews. The serviced apartment industry can benefit from these new patterns of behaviour, as people are discovering the fact that these ‘home away from home’ experiences exist in the first place. The serviced apartment provider is able to provide the step in between a hotel and Airbnb - which means that they meet the needs of this growing market. Serviced apartments offer the cleanliness and safety that a hotel offers, however they can also provide those home from home options with equipped kitchens, comfy living spaces and other sought after facilities like Airbnb.
Airbnb hosts versus serviced apartments
With good positioning, and clear communication, there are a number of areas where serviced apartments are able to compete – and fill in some of those gaps that the Airbnb experience may not be able to service:
- Some Airbnb hosts are great, but service levels can vary - not everyone is cut out for the hospitality industry! Serviced apartments offer the advantage of a qualified person on hand should your guests need them, but if they have it all covered, then guests simply get to enjoy the privacy of their own self-contained apartment.
- Airbnb listings often have shared bathroom and kitchen areas which may not be desirable for everyone. Privacy again can be an important consideration – and where serviced apartments offer a great advantage with their own private facilities.
- Some Airbnb accommodations are great, but can vary greatly - even from visit to visit. Serviced apartments can offer a guaranteed level of quality, cleanliness and consistency for every visit.
- Security is another important aspect that serviced apartments can offer which some Airbnb listings cannot. Security personnel, door entry cards, security cameras and room safes are all features to highlight with your serviced accommodation.
- Finally, some people find it unsettling to find their host’s personal belongings around the property - for example clothes in the bedroom, food in the cupboards and toiletries in the bathroom. Serviced apartments are a great step in between the anonymity of a hotel and the feeling that you are staying in someone else’s home!
getting that extra piece of the pie! attracting airbnb bookers
The success of Airbnb has resulted in a whole new group of consumers who have experienced the likes of Airbnb and the shared economy, and for them a serviced apartment is a natural step up. They have come across some of the ups and downs of this new market place and are seeking a more regulated environment. They enjoy the personal side of this new platform but they want more.
Offer a competitive price. When checking your competitive set pricing, make sure you include not only other serviced apartments and hotels, but also know what the Airbnb offer is like in your area – and of course make sure your value proposition is in line with your price.
You can give guests a guaranteed booking. Guests can be confident their booking won’t be cancelled at the last minute leaving them with no accommodation at short notice.
Provide a straightforward price via your website with no extras such as a deposit and cleaning fee being added at the final booking stage.
You can offer better payment options. With Airbnb the guest pays the full amount when the host confirms the booking. This may not be advantageous to the consumer - especially for longer stays.
Serviced apartments and hotels can compete with the likes of Airbnb and other shared economy platforms by having a great web presence and with a really personalised offering. In this instance we’d advise taking the time and energy to really sell your property, showcasing your interesting and unique features online as best you can…
- Create a website which is personalised to your product and that has strong branding. The branding should be carried throughout all aspects of your communication - such as your social media presence plus any correspondence you have with clients.
- Invest in some good quality photos that really show every angle of your property, we recommend around ten per property. Professional photos will really make your listing stand out from the rest. If you can’t afford a professional photographer why not offer a free stay in exchange for work?
- Post full and accurate descriptions of your property. This will eliminate queries which are time consuming to handle, plus it means there won’t be any nasty surprises later on.
- Plan some time each day to manage and handle bookings and customer enquiries. Spend some time creating some well worded emails to use as templates. Add your own personal touches as you send them to create a rapport with your guests and offer them a friendly exchange.
- Adding a blog to your website is a great way of selling your local knowledge and creating more than just a bed for the night for your guests. You might want to write about nearby attractions, restaurants and bars which will all lead to a more fulfilling stay for your guest - and also a better review!
- The impression you give when guests arrive to realise there is tea, coffee and fresh milk in the fridge is lasting. For long stays a welcome pack with wine, crisps and chocolate is appreciated and a low cost versus the booking. Modern extras such as Google Chromecasts, so guests can stream their Netflix account to the TV, or Handy mobile phones in rooms www.handy.travel can differentiate your offering.
- Finally, for most users, the main attraction of Airbnb is the price compared to a hotel. For these people to discover there is something in between the two is a revelation. Give them a serviced apartment that is clean and stylish, with a kitchen and other key facilities which is also safe and secure - and they’re converted!
Whatever the case, we believe Airbnb has bought some new ways of thinking, doing and creating within the market place – which can only be a good thing! If you would like further advice on how you can succeed in this growing market, the team at Vestibule Marketing and elinaPMS would be happy to help you. We have a great digital marketing team and an excellent property management system with an on-site web development team should you need them.
Why not give us a call on +44 (0)20 305 17 305
- or take a look at our article on choosing the right PMS for your serviced apartments to learn more!
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