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Airbnb – the threat or bit player?

Could Airbnb actually be good for Aussie travel agents?

Could Airbnb actually be good for Aussie travel agents?

 

 

 

The first time I heard of Airbnb it was from a mate whose classic come back to roomsXML was “I don’t get how travel agents still exist…”.

 

How about the hype?

In researching this article, one might think that Airbnb or Uber or any other new tech driven, self rating style, will be directly responsible for the downfall of the industry, hotels won’t survive and all articles finished with “let him who hath understanding reckon the number of the beast”.

The main case is “if there are more rooms out there, it will hurt hotels”. True to a point, but not everyone is affected by that point.

 

They want different things

I doubt Airbnb customers are Aussie travel agent customers.

My mate loves to brag about a bargain, but he won’t admit it when his “better rate” was in $US, not $AU; before the taxes; and it was in fact $100 more for three nights.

You know the one.

travelagents_KarryOn

Same reason why we dropped 1 and 2 star hotels from roomsXML inventory. No one in Australia booked them. Why? No one wants that customer who is concerned over $3 and wants a free transfer for every $50 spent.

I do want luxury, comfort, standards and someone to bring me new towels. Travelling three months a year, early starts, late finishes, weird time zones – comfort won’t ever be me staying in a strangers house. I will always sleep better in a hotel. Sleep is the thing for me.

To quote a favourite response to our “Keep Calm, leave it to the travel agent competition”:

“You most certainly can book yourself but exactly to what and where remain in question until you arrive.”

Who is likely to use Airbnb? It’s probably the market you already “lost access” to with the advent of the internet – the self bookers. The ones going domestic, or local-international such as Fiji, Bali and Thailand.

 

Who will the hotels turn to?

So the hotels lose out, especially in peak times when they can charge a bomb for fancy rooms. Airbnb is winning the online marketing effort as they have a room in every street in every city.

How can hotels compete with that?

They go through the traditional supply chain, work with agents, establish robust sales channels, incentivise to get YOUR business and make it easier for you to deliver value to your customers.

Your old friends are coming back, baby.

 

Negative marketing power and old money

Hotels have invested into local infrastructure, mates in councils and government, helped local economies, they have bought ad space with Murdoch – made some politicians look good – those favours aren’t forgotten.

The bad stories will emerge, like on Uber. “Unregulated, untrusted, self rate, no guarantee. Rats.”

Hotels will remind the public about fire safety, hygiene, access to facilities and “what if something goes wrong”. The horror stories will be hyped by media, local government enforce building regulations and old money will win out, for a bit.

ICCHOTEL

Whilst they can’t collude, hotel chains will take up this united message against the “disruptors”.

Disagree? The Beta home video standard was way, way better than VHS. Why did VHS survive even though the product was clearly (only 60 percent as good as) inferior?

They won a marketing war. They are taking on an industry. I love the thought of change and disruption – to shake things up, the equalise. Grey hair is teaching me its tough.

 

Hotel Prices go down, hotel deliverables go up

Most OTA’s have innovative tools which push hotel prices down, by trying to get hotel owners to adopt algorithms that force them to drop prices. In turn, OTA’s compete better against agents, traditional wholesale models and the like.

But Airbnb is trying to get some of that market share whilst simultaneously attacking the traditional model. Who would have thunk OTA’s and traditional wholesale travel groups might have something to unite them.

But either way, hotel prices will drop. Agents will have a cheaper product to sell. Generally, that’s going to be good for business.

What do you think now? Airbnb, a the threat or bit player?