The hospitality industry, like many others, is experiencing a dramatic shift in user behaviour and preferences as a result of technology. As we see a rise in the prominence and popularity of the sharing economy, Senior Account Manager Katie Sandell urges hotel chains to adapt in order to facilitate these changes in consumer behaviour.
The sharing economy – sometimes known as the ‘shareconomy’ – is the term for a hybrid market model where purchases and sales are made as peer-to-peer transactions, as is the case with Airbnb and Uber.
Taking a closer look at the application of this to the hospitality industry, Airbnb has changed the way that people think about travel and, crucially, experiences. I’ve used Airbnb multiple times and although the initial attraction for me was being able to stay in a New York apartment (just a stone’s throw from Central Park) at an incredibly cheap rate, it actually gave me a much more local experience of the city.
Each morning we walked down to the café on the corner where we had bacon, eggs and gallons of filter coffee. We’d often head back to the apartment mid-afternoon to crash after a day of being on our feet, before heading out to a local bar or restaurant in the evening. The apartment was tiny and old-fashioned, with giant radiators and a mint green bathroom, but it felt like we really were living in New York. Even the building’s corridors reminded me of Friends.
The truth is that not only was the apartment substantially cheaper than staying in even a basic hotel in New York, but it was a much more valuable experience. Growing up in a world of Instagram, millennials have a lot to do with this trend and have a desire for native experiences, especially when travelling.
Airbnb has capitalised on this trend, with its above-the-line advertising drawing on this insight: the ‘Don’t go there, live there’ TV ad.
But what does this mean for the hospitality industry? How will hotels prosper if companies like Airbnb continue to rise in popularity? The likes of Hyatt and AccorHotels have been quick to respond to this trend and have broadened their hotel portfolios to bring in several of these sharing companies. This will enable them to broaden their appeal and to meet the needs of their audience over the coming years.
As we increasingly see millennials’ user behaviour and preferences impact on a variety of different markets, we will continue to see giants of these markets needing to adapt to meet these needs.