Hotel chains experiment with home-sharing
Travelers sometimes want a cookie-cutter room in a downtown hotel, and they sometimes want a cozy Tuscan farmhouse to share with friends.
Hotels have always been good at providing the first one. Now, they’re trying to figure out how to provide the second — and blunt the growth of competitors like Airbnb. But they’re having mixed success.
Marriott said Tuesday it’s expanding its six-month-old home-sharing pilot in London to three additional European cities. On the same day, Hyatt announced it was pulling out of a money-losing collaboration with luxury home-sharing company Oasis.
Analysts say hotels are wise to experiment. Airbnb now has 5 million listings on its site, up 25 percent from a year ago. By comparison, Marriott grew 5 percent last year to 1.3 million rooms. In some markets, like New York and Miami, studies indicate that home-sharing is already eroding hotel profits.
But it’s not yet clear how far hotels are willing to expand into home-sharing, which challenges their traditional business models. It costs more to clean homes scattered in various neighborhoods than rooms at a central location, for example.
The barriers are so great that at least one major hotel company — Hilton — is giving home-sharing a pass for now. The company’s CEO, Chris Nassetta, said the quality, consistency and amenities that Hilton customers expect are best provided in hotels.
Other hotel companies, like Marriott, say they can bring order and standards to the chaotic home-sharing market. Hotels promise perks they say Airbnb can’t match: fully vetted properties, fluffy white towels and popular loyalty programs that let members use points to book homes.
“The lines are beginning to blur, and depending on what kind of trip it is, sometimes a home feels better than a hotel,” said Jennifer Hsieh, Marriott’s vice president of customer experience.
Marriott began testing home rentals in London Marriott teamed with home-sharing company Hostmaker to rent this and other apartments in London. Marriott is expanding the service to Rome, Paris and Lisbon. in the spring. This week, it’s expanding that pilot program — called Tribute Portfolio Homes — to Paris, Rome and Lisbon. Marriott said the program will now include 340 homes.
Hotels aren’t necessarily luring different customers with their home-sharing options. Instead, they’re finding that existing customers want more options, says Steve Caron, vice president and head of vacation rentals for Comfort Inn parent Choice Hotels, which has partnered with RedAwning, a company that oversees 20,000 rental properties.
Take Craig Sowerby, an author and freelance travel writer based in Barcelona, Spain. He’s a Hyatt loyalty member and usually stays in hotels, but he decided to try an Oasis apartment for a one-month trip to Buenos Aires earlier this summer.
There were some hiccups. He had to pay upfront, months in advance, for the full $1,745 cost of his stay. He got fresh towels and sheets weekly, but there was no other cleaning. The WiFi didn’t work.
On the plus side, he said, he earned credits toward his elite Hyatt status as well as points for future stays. The apartment was also far nicer than the Airbnb he subsequently rented in another part of Argentina. But he thinks it will be a challenge for hotel chains to deliver the same standard of service in shared homes.
“If the hotel chains end up simply offering a ‘more expensive Airbnb,’ then their potential market will be limited to those of us who are points or elite status obsessed,” Sowerby said.
As hotels continue to experiment, the pressure from home-sharing sites isn’t going away. In fact, Airbnb is making hotel-like moves of its own.
In late September, it added rooms from 50 boutique hotels in Thailand to its platform through a partnership with a Thai hotel association. Last year, it bought Luxury Retreats, a high-end home-sharing site. And it’s trying to standardize what guests can expect with a new designation called Airbnb Plus for properties that pass a quality inspection.