Taking on Peer-to-Peer Accommodation: How Hoteliers Can Compete and Succeed

Considering the aspiration behind most start-ups is to disrupt big-fish rivals, few have been as successful – and become as notorious – as Airbnb. So much so that, throughout many parts of the world, hotels are facing unprecedented levels of competition from the rapidly expanding peer-to-peer accommodation industry, spearheaded by this sharing-economy giant.

The stats don’t lie. Recently, a study discovered that in the US alone, Airbnb enjoyed a 1% growth in 10 key hotel markets from 2008-17 – ensuring hotel RevPAR dropped 0.02% across all segments (Dogru, Mody and Suess, 2018).

While this doesn’t sound like a giant drop-off, when you factor in that Airbnb supply grew by more than 100% year-on-year over this period, the RevPAR decrease was, in real terms, 2%. And wasn’t limited to economy hotels either. It was felt right across the industry. Believe it or not, even luxury hotels endured a 4% RevPAR drop.

Understandably, then, hoteliers are wondering what to do in the face of Airbnb’s disruption.

Here, we’re going to take a look at a few options open to them.

Wake up to the woke crowd?

First of all, it’s important to acknowledge the demographic that peer-to-peer platforms appeal to so readily. Principally – if not explicitly – we’re talking millennials. And perhaps why these switched on, woke-ish customers find such accommodation so appealing is because they want an ‘authentic experience’.

And that is something that it no doubt delivers in spades. Fair enough!

So, how can hoteliers try competing with what peer-to-peer accommodation does so impressively? Well, to start, hotels could start highlighting what they do that’s ethically and socially responsible (e.g. boosting the local economy through employment and use of local suppliers). Likewise, they might try doing something that’s totally different – stressing what sets them apart and highlighting exactly why that’s such a good thing.

The key? Genuinely leverage your strengths.

Playing to your strengths

Often, what distinguishes a hotel is its personal touch, which is impossible to replicate in peer-to-peer accommodation. And to leverage this strength means delivering a personalised experience before check-in and, indeed, beyond check-out.

How? By improving operational efficiency so guests feel valued – even spoiled! – starting from the point at which they book and extending this over the course of several months…even years.

That means constant communication after booking and follow-ups after check-out via hotel mobile apps and personalised email marketing campaigns.

Additionally, though, hotels might seek to better leverage what’s outside as well as inside their guestrooms – delivering what’s referred to as the ‘experiential value proposition’ (EVP). This tends to cover amenities like spas, fitness centres and open-to-the-public restaurants and bars, which position the hotel as a ‘venue’. As opposed to just a place to sleep.

Of course, you have to make sure to actually communicate that experience via marketing.

Embrace the brand

Critically, though, it’s important to remember the lessons of old. Household-name hotels maintain their status for a very good reason. They don’t just deliver an outstanding level of service and experience; they each work hard to live up to a unique identity. In other words, a consistent, much-admired brand.

Hotels, then, ought to embrace their brand and look to their brand promise – and how that informs and interacts with an excellent guest experience. Airbnb and its sharing-economy rivals may score highly on experiential authenticity (especially with the young), but research suggests hotels score equally highly on brand authenticity and, therefore, on brand loyalty (Mody and Hanks, 2018).

So, sharing the compelling story of a hotel’s brand values – its personality, its heritage, its purpose and what makes it unique – is crucial. It’s about connecting with potential bookers across various online and offline channels and evoking a positive, emotional response. Basically, sharing a powerful brand promise, especially through hotel responsive web design. And this, too, can feed into launching a hotel loyalty programme; an incredibly powerful way of unlocking add-ons for repeat guests and delivering hugely valuable customer data for analysis.

The power of personalisation

Finally, don’t overlook the power of personalisation. Young, experience-hungry travellers are switched on by what’s ‘real’ and turned off by fakery. So, run-of-the-mill communication (automated emails and uninspiring social media for hotels) are a big no-no.

And, make no mistake, improved personalisation in marketing should also reflect a commitment to improved personalisation in the hotel itself. Add more of a human touch by embracing the benefits of technology to free up talented, dedicated hotel staff and allowing them to do what they do best: seeing to guests’ whims and desires with a smile on their face.

The peer-to-peer accommodation boom is proving a decidedly disruptive proposition for the hotel industry, yet hoteliers shouldn’t despair. With a combination of imagination, flair, high-quality service and strong messaging – the hallmarks of any successful hotel – they can pack guests in and prevail.