Airbnb cajoles hotel owners with promise of lower commission rates
Airbnb was first for home owners. Now it's going after hotel owners.
In an open letter penned today by Airbnb and addressed to boutique hotel and bed-and-breakfast owners, the home-sharing titan outlined its case for why those properties should list on its site, which already boasts around 4.5 million global listings.
It read in part: “We know that many of you are thinking about the best ways to market your rooms online... Time and again, small business owners told us that the fees charged by travel agents like Expedia and Booking.com—which can be as high as 30 percent—are too high.”
In a bid to attract more boutique hotels to its platform, Airbnb is instituting “a series of changes,” including a commission rate of 3 to 5 percent for member properties. “We want Airbnb to be for everyone, including professional hospitality providers that offer unique spaces and personal hospitality to the Airbnb community,” the letter continued.
Beyond the lower partner fees, other resources Airbnb now offers for hotels include:
New ways to help rooms stand out. Last month, Airbnb announced that it would add four new property types to its platform—Vacation Home, Unique Space, B&B and Boutique. "With this change, you will be able to easily distinguish your rooms from other listings and guests will be able to more easily find the space they are looking for," the company said in the letter.
No long-term contracts. Hoteliers have full control over when inventory appears on Airbnb.
Lower competition. Boutique hotels on Airbnb are not competing against big chain properties.
Later this year, Airbnb expects to launch a new guest membership program offering benefits across a traveler's entire trip, and will also update its tools to help hoteliers better manage their inventory.
Airbnb commissioned independent research firm David Binder Research to interview owners and managers of traditional B&Bs, inns and boutique hotels to gauge the state of the market and better understand which product features were most important to this segment of the industry. (Respondents were not informed of the sponsor of the survey, nor of the specific goals of the research, other than to understand their opinions about services available to their business.)
Forty-nine proprietors shared their insights, claiming that the fees charged by third party booking sites like Booking.com, Hotels.com and Expedia are too high. In addition, most were not aware that these platforms typically charge smaller properties higher fees than those paid by big hotels. Notably, half of the respondents have used Airbnb in the last twelve months to list properties, and 65 percent said that they would be more likely to use Airbnb after learning that Airbnb charges the same fee of 3 to 5 percent to all hotels, inns and bed and breakfasts. In addition, the majority of respondents said that Airbnb’s new tools to list and manage rooms would make them more likely to use Airbnb.
Airbnb vs. OTAs vs. Hotels vs. Governments
Airbnb’s targeting of OTAs makes sense, especially since Expedia purchased home-sharing platform HomeAway last year and intends to take it international over the next five years. This move, then, could help Airbnb capture a bigger slice of the proverbial hospitality pie.
Last month, Airbnb signed a deal to allow third-party distribution services to list hotel rooms on its site. SiteMinder, a cloud-based distribution platform with more than 28,000 hotels, will be Airbnb’s first partner in this new endeavor, and will act as a channel manager to ensure its properties will be included alongside Airbnb hosts. The company is not excluding chain and branded hotels from inclusion, but its qualifications show an interest in “experiential” properties first and foremost.
Just as importantly, attracting boutique hoteliers to its platform gives Airbnb a major strategic advantage in the ongoing battle for market share. Wherever Airbnb has a presence, it has famously taken steps to follow all local laws in terms of bookable nights and taxes paid, even as local lawmakers look to block its growth. With boutique hotels (and, perhaps, industry groups like the Boutique & Lifestyle Lodging Association) on Airbnb's side, the home-sharing site may find a more welcome presence in tougher markets.