by ALEXI KHAJAVI
While in Los Angeles recently, I had dinner with some friends. After dinner, one guest offered me use of one (yes, he’s got several) of his Airbnb apartments to avoid the drive back to my hotel. It was a kind gesture that ultimately ended up falling flat when the key didn’t fit the lock.
I ended up just taking a cab back to my hotel, got to my room, put the key card to the door and it opened, like doors should do in professional establishments.
Earlier at dinner, we talked about the changing dynamics of consumerism and the continuing onslaught of collaborative consumerism: the other economy where consumers swap, barter and sell things to each other via social networks and mobile devices rather than with a retailer or professional establishment.
A few of those at dinner work in venture and private equity, and their enthusiasm for the practicality and scale of Airbnb and Uber was evident. I share the feeling of admiration for what these companies offer and have accomplished in such a short time; however, I’m of the opinion that Airbnb is not in the hospitality business.
Don’t get me wrong: Airbnb is an incredibly impressive and formidable player in the accommodations industry. Humbly note the deft absence of hospitality in that sentence. In 10 short years, Airbnb has served more than 150 million customers and contains more than 4 million listings in 191 countries, including Cuba, which leaves only North Korean, Syrian, and South Sudanese hoteliers unfettered from the interference of Airbnb.
The sharing economy is not going away. According to PwC, it is expected to generate revenues of up to $335 billion in 2025. But the growth of the sharing economy doesn’t have to be a zero sum game for our industry. In fact, it’s not even our game – we’re in the reliable experience economy.
As the old adage goes, s#!t happens. And it happens a lot in travel. Your key doesn’t work, for example. Who do you turn to when you rented an apartment from some guy 3,000 miles away? What about the quality of the mattress? is there a desk, or proper security for a single female traveler? It’s not just customer service, it’s about the customer experience.
A vacant landlord can’t curate this type of personalization. More people are vacationing to get in touch with not only themselves but with the locals, the environment and even the proprietors and employees. Hospitality serves that higher purpose. Airbnb may get you close to the action, but it doesn’t put you in it the way hoteliers can.
The U.S. hospitality industry is on a tear at the moment, with revenue per available room, average daily rate and occupancy outperforming any numbers we’ve seen since 2006.
Notwithstanding, Airbnb is doing just fine thank you very much. So much so, it’s muscling its way into being a quasi-OTA and an accommodations brand at the same time – now selling hotels on its site as well as implementing a set of brand standards (and financing) for its soon-to-be launched ‘Select’ listings. With Airbnb formulating what it wants to be when it grows up – a massive travel company that can continue to scale with quality standards consumers can come to expect – hoteliers needs to double down on our unique selling proposition.
I like the idea of buying directly from my peers. I’m just not convinced that travelers will get the experience they expect from Joe Schmo as they do from Conrad Hilton.
A brand that simply connects people with accommodations is not in the business of creating memorable experiences; it’s in the business of e-commerce. There’s nothing wrong with that. It’s just that hospitality can deliver so much more.
Alexi Khajavi is managing director of the EMEA region and chairs the Hospitality & Travel Group for Questex LLC. He is responsible for the overall management and development of the company’s global hospitality and destination communications properties and events including the Hotel Management Group, the International Hotel Investment Forum (IHIF) Summit Series, Destination Develop and Destination Development Investment Services, HOTEC and others. Khajavi, who brings more than 17 years of travel, hospitality and marketing and sales experience to his position, joined Questex in 2014.