Top Hotelier Ian Schrager Wonders if the Industry’s Airbnb Strategy is Wrong

by | Jan 2, 2018 | Chains

In recent years, changing economic and social trends have disrupted the hotel industry, as they have many others, as populations increasingly adjust to the online and share economy. Online travel agencies streamlining digital booking processes for guests was the first wave of such change, beginning to strike in earnest as far back as the late ‘90s.

The second and more recent wave is one proving to be far more troublesome and problematic for many hotel operators. The company at the heart of this is AirBnB, which allows users to rent our their homes and other accommodations to travelers at prices they set. In other words, because of AirBnB, large hotels are now competing to win guests from people who want to make some extra money sharing their homes or extra spaces with travelers.

This, for obvious reasons, has been a topic of much discussion among the world’s largest hoteliers, and recently veteran hotelier Ian Schrager has said that he thinks the larger hotel industry’s decision to try and fight Airbnb through legislation and governmental policies is going to lose in the end. Schrager instead has suggested that the hotel industry beat Airbnb at a game it can’t play: developing communal gathering spaces that will offer a stark social contrast to the private apartments and residences that guests find themselves staying in via Airbnb.

It remains to be seen which tact will be more successful in the end when it comes to limiting the financial impact of the advent of Airbnb. The American Hotel and Lodging Association has lobbied heavily for legislation against Airbnb, or at least for legislation it says would level the playing field, and, to be sure, there are many governments throughout the world that have passed various laws and regulations that seek to limit or ban the use of Airbnb in order to ease competition with local hospitality companies.

Schrager, however, suggested that the hotel industry’s better move is to be progressive, rather than regressive, by working instead to out innovate Airbnb by investing in and developing the aforementioned shared and communal spaces, which is something that all indications suggests is considered desirable among younger travelers anyway. Although Airbnb has tried to add community to its product through moves like tours and coordinated activities, the simple fact is that it is difficult for its user to offer any community whatsoever to guests, putting hotels at a clear advantage in this arena.

Schrager also said that many hotel companies are in denial about the impact of Airbnb, as well as the threat that it poses to them moving forward, especially when it comes to enticing younger guests and travelers.

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