Skift Take
Just as challenging as it is for Airbnb to offer more hotel-like options, it seems in some ways even more daunting for hotel companies to start offering more Airbnb-like accommodations.
What traditional hotel companies once dismissed or derided, some are now welcoming with open arms. But not all hotels are finding it easy to embrace homesharing, or incorporate it into their business plans.
One of the earliest adopters, AccorHotels, has struggled to turn a profit from its $169 million acquisition of luxury home rental platform Onefinestay. Two years after buying it in 2016, AccorHotels most recently wrote off its investments in the business, but remains determined to keep it as a part of its portfolio.
In August 2017, Hyatt Hotels & Resorts, which had previously invested in Onefinestay, tried its luck with another “home meets hotel” platform called Oasis, which AccorHotels had also invested in previously. But by October, 14 months after its initial investment, Hyatt found itself abandoning Oasis, and Oasis found itself a new home with Vacasa, a vacation rental property management company.
Earlier this year, Marriott International embarked on its first foray into private accommodations, partnering with Hostmaker for a pilot in London. That initial experiment is now being expanded to three other cities to encompass a total of more than 340 listings, but that’s still very small in comparison to Marriott’s traditional hotel inventory of more than 6,700 hotels.
“The expertise of major hotel companies doesn’t lend itself to the vacation rental and homesharing segment,” said Eric Breon, CEO of Vacasa. “Hotel companies are great at building brands, yet vacation rentals are inherently boutique. Hotels are great with business travelers, but vacation rentals are predominantly leisure. Hotels excel at operations in a single facility, whereas vacation rentals are dispersed throughout the community.”
And, not surprisingly, even private accommodations pioneers like Airbnb are realizing the importance of having more quality product to offer to consumers, which is why it launched its own hotel-like home listings earlier this year, called Airbnb Plus.
If AccorHotels, Hyatt, Marriott and, presumably, other hotel companies eventually want to find success in homesharing, it’s clear that not all strategies are created equal. Essentially, those different paths boil down to three different options: to buy, to partner, and to build.
But which one is best for hotel companies looking to expand into homesharing? Moreover, can hotel companies successfully enter this market, or will they inevitably stumble?
The Case For/Aga
