View from the Top
AIRBNB, TOMORROW’S YESTERDAY.
BUT, WHAT’S NEXT?
BY MICHAEL HEFLIN, SVP HOTEL DIVISION, TRAVEL LEADERS GROUP
I
n the world of ‘what’s old is new again,’ Airbnb was
positioned to flip the hospitality industry on its head by
taking a radical approach: do exactly what hoteliers
have been doing for hundreds of years, but package it
up under buzzwords like ‘sharing economy’ and ‘peer to
peer,’ put a technology wrapper around it in the age of
distribution and watch as the market swooned.
I once heard Kellyn Smith Kenny, the SVP and Chief
Marketing Officer at Hilton, previously a marketing
leader at Uber, respond to a question comparing
the disruption Uber caused in the taxi industry to the
disruption Airbnb was causing in the hospitality industry.
Her answer (in my words) was relatively simple – where
Uber was operating in a broken marketplace ripe for
disruption, Airbnb, frankly, wasn’t.
I think most people agree the taxi industry was
fundamentally broken. It operated as an anti-competitive
marketplace driven by antiquated protectionary policies,
medallion systems and lobbies rather than efficiency and
customer experience (and kudos to the power of the lobby
as it continues to create headaches for app-based ride-
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sharing across the globe). These market dynamics, not
necessarily Uber’s technology nor positioning (especially
given they weren’t first to market), were the most critical
elements of the transformation that happened across the
livery space.
Her feelings, and I believe it’s reflective of most
industry leaders, including my own, were that the
opposite is true in the hotel space. Ours is a highly
competitive marketplace with a hyper focus on
consumer experience. Hotel companies are constantly
developing ways to drive customer satisfaction and
product differentiation and it shows in the creation of
new properties, the refurbishment of established brands,
and the unbelievable amount of money being invested
in personalization platforms masquerading as loyalty
programs. It doesn’t appear that anyone thinks the hotel
marketplace is broken. Investors certainly don’t, as new
builds and room expansion continue at rates that would
have seemed impossible only a generation ago. And
consumers certainly don’t, as hotel occupancy rates have
continued to rise.