There’s a few cracks appearing in the Airbnb model that could threaten their current success, according to hotel industry experts.
Speaking at the HotelsWorld 2017 conference in Sydney this week, some of the key issues include an inability to police all the Airbnb landlords, safety concerns, and hotels disrupting their products to compete in the sharing community.
Per Australian Financial Review, Airbnb rooms are even starting to reach the same level of hotel rates, leaving even less points of difference with hotel operations.
“How are you going to police all these landlords? That’s a big potential issue, as well as quality and safety issues,” Dream Hotels Group Managing Director Kevin Wallace said at the conference, per AFR.
“I don’t know how much Airbnb is reporting [rogue landlords], but you see a lot of Uber rogue drivers … a lot of corporates are disallowing people from using Airbnb due to personal and fire safety.
“You will see hotels come back to fill that space, because there are problems in the [Airbnb] space, especially in the way they are being provided.”
It’s an interesting comment, given Airbnb has really stepped up its business offerings, even partnering with travel agent giants Flight Centre to reach more corporates.
Per AFR, Mantra Group’s Chief Operating Officer Tomas Johnsson added that professionalism of services is something that sets hotels and Airbnb apart.
“As this industry matures, there will be need for more professional delivery of these products,” Johnsson said.
Hotels are also tapping into the “local experiences” trends – similar to Airbnb’s Trips product – as part of their strategy of mainstream hotels taking back their market share by offering this on top of highlighted safety features.
Per AFR, the ‘lifestyle hotel’ is something that’s started popping up to rival Airbnb and sharing economies.
Looking at our own country, and AccorHotels is set to open several lifestyle hotels for guests seeking a truly authentic and local experience to complement their hotel stay.
On top of that, smaller brands like Veriu, which recently launched its Broadway property in Sydney, are coming onto the scene offering “authentic local experiences” specific to the surrounding neighbourhood, plus extras like their complimentary ‘explorer bicycles’ for guests to get into the local areas.
Veriu Broadway is an $18 million conversion of a former warehouse space offering self-contained studios, and loft style apartments.
Per AFR, even the cheaper hotel groups like youth hostels are beating Airbnb on price.
“Even Airbnb is not operating at the cheapest level while YHA is big on economies of scale,” YHA Australia Chief Executive Julian Ledger said, per AFR.
Meanwhile, Airbnb’s closest competitor, HomeAway, could be stung by regulations in a similar vein to Airbnb.
HomeAway Regional Director for Australia and NZ, Anton Stanish, said over-regulation would put the industry out of business, despite acknowledging the need for some regulations.
HomeAway is, per AFR, looking to add to its competitive streak by providing 85 per cent of its holiday rentals in more regional areas.
Law firm Ashurst also released a report recently, which per AFR, suggests the industry could be getting a mammoth injection from the federal government, who hopes to have 20,000 new rooms by 2020.