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Fighting Back

BITAC® Presentation Offers Solutions On How Hoteliers Can Combat Sharing Economy

Friday, May 03, 2019
Dennis Nessler
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As the inventory and the bookings within the sharing economy, and Airbnb specifically, continue to explode the impact on the lodging industry is undeniable. Speaking at BITAC® Operations earlier this week, author, hotelier and Hotel Interactive® contributing writer Larry Mogelonsky drove home that point to attendees and offered some solutions for hoteliers to compete effectively with these online giants.

Mogelonsky framed the discussion by acknowledging the growth of Airbnb, which now offers some 6 million rooms compared to 1.3 million rooms for Marriott International, which represents the largest hotel chain. In fact, the top three hotel companies combined, Marriott, Hilton and IHG, total less than half of Airbnb’s current inventory.

He further added that more than half of U.S. households with more than $100,000 in income have used Airbnb in the past 12 months. “They’re a game changer, they’ve legitimized the sharing economy for hotels,” said Mogelonsky.

He detailed how the 11-year old company built its reputation and increased its presence.
“The Millennial generation is where it started and the target was backpackers and people who were couch surfing. The pricing was transparent and the concept was authentic experiences,” noted Mogelonsky, later adding of the Millennial generation, “we’re [hoteliers] not getting them back; it’s going to be hard, bordering on impossible.”

But just as importantly Airbnb has continued to evolve and now has created “Airbnb for work,” which is designed strictly for corporate business. Mogelonsky pointed out that some three quarters of a million businesses have already registered, including 100 percent of the Fortune 500 companies.

From the perspective of traditional hoteliers, Mogelonsky noted, “They’re going after our bread and butter; the seasoned affluent traveler.”

Mogelonsky stressed that the hotel industry needs to respond and quickly.
“We have to fight back, but first we have to acknowledge that Airbnb exists. They’re entrenched and they’re a serious threat to our business. We have to recognize that. Don’t think you can deny Airbnb as a competitor just because you have five stars on your property. You are going to be hit,” he said.

Mogelonsky further added, “We need to get together and think about Airbnb as our key competitor and not the hotel next door. They’re not going to be your comp set, Airbnb is your competitive set.”

Meanwhile, the considerable efforts by hotel associations and organizations to “level the playing field” for traditional hotels by making sure Airbnb’s are subject to the same taxes, inspections and regulations will do little, according to Mogelonsky. He referred to those as “partial measures” that may slow their progress but “will not help us in long term.”

Mogelonsly did, however, point out, “We can survive but the key is we have to differentiate ourselves.”
He continued, “We have to start thinking of our properties as a gem. We have to start thinking and focusing on making it as absolutely good as it can be. We start by playing to our strengths. Let’s think about what we have as hoteliers that Airbnb doesn’t have.”

To that end, Mogelonsky emphasized the importance of people and specifically service.
“We’ve got lot of people. We’ve got all of these staffers and this is a tremendous advantage to us versus Airbnb, which has nobody,” he exclaimed.

Mogelonsky to detail some of the differentiating factors for hotels.
“I believe the most important opportunity for us is food because everybody eats. Twenty-six percent of people golf, 24 percent of people go to the spa, but 100 percent of your guests eat. Don’t forget it. We’ve neutralized all of the room differentials. Food is a key factor for booking. Love and embrace your f&b director, love and embrace you chef and make sure everybody knows what their doing in that area,” he noted.

Mogelonsky referred to what he calls the “living room” concept as a means of taking advantage of public spaces. “You have a property, create points of interest out of your property. Find ways to differentiate areas within your public areas and your guestrooms to make them different,” he said, emphasizing the importance of making the lobby a destination for guests.

Other potential of points of differentiation for hotels include artwork, a concierge, cutting-edge technology and loyalty programs. Mogelonsly further touched on the importance of offering room upgrades and designing rooms for social media sharing. “You’re not in the accommodation business, you’re in the experience business,” he told attendees.

Mogelonsky also urged hoteliers to take advantage of bleisure, a trend that combines business and leisure. “Remember it in everything you do. If somebody’s coming into your property and they’re staying for a two-day business event, find a way to offer them an additional night on either side at a special price,” he said.

Mogelonsky concluded by insisting that every hotel has to “be the best” at one particular aspect of hospitality. “Your property has to stand for something,” he stated.

Dennis Nessler    Dennis Nessler
Hotel Interactive®, Inc.
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