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Will personal accommodation become the ‘norm’ rather than hotels, for business travel?

Posted on June 20, 2014 by

In the past year, there has been much talk of sharing economy businesses. Startups like Airbnb, Lyft, Uber and their high profile founders have been making headlines on print and digital, converting more users into their “collaborative consumption” services. Airbnb came online in 2008 to connect landlords (hosts) and lodgers (guests) with the purpose of short-term stay or vacation rentals globally. 

What does this mean for hotels? When budget airlines joined the aviation industry and gave airlines a run for their money, many spectators debate on the future of full-service carriers. Sustainable businesses do not just disappear with new technology. They are meant to adapt with the test of time.

Published data has shown others the success of this six year old company. Silicon Valley business and analysis website, TechCrunch published that Airbnb had 4 million actual guests in 2012 while last year’s figure was up 6 million, a 150% climb in two years, from a total 10 million user accounts.

 

Tech Crunch

 

With all these information, it looks as though “collaborative consumption” rentals are poised to take over traditional hotels as modes of accommodation.

However from an industry’s observance, PKF Hospitality Research has projected hotel occupancy in the US to increase for the first time in five years. Last year, many brands reported an escalation in room rates. This coincides with a study in November 2013 by the Global Business Travel Association. A 7.2% rise in business travel expenditure was predicted the following year as the economy picks up and business investment surge gradually.

With room rates expecting to increase, would it not be more ideal to book your stay on an Airbnb property instead? We shall make a comparison in one of the priciest cities in the world - New York City. A night stay in an Airbnb room in TriBeCa starts at $150 and can be as pricey as $644 while a one night stay in the Hilton Garden Inn TriBeCa starts at $289 to $350 for a Jacuzzi bathroom. Most critics has pointed out the lack of price difference between staying in Airbnb or a hotel. What is the edge for picking Airbnb? Most users have mentioned the genuine local experience during the stay.

 

While popular with leisure travellers, the business traveller requires affirmed certainty when staying the night away. 

Airbnb’s accommodations are run by hosts. These hosts are individuals letting out their properties. They are not bound to any form of service protocol unlike a hotel, being a professional hospitality lodging, would have a personnel assigned to a specific duty to take care of your during your stay. Airbnb hosts may or may not be the owner of the property. A common but worst-case scenario that has been making news in recent months are the illicit subletting of apartments listed on the website. The legality of hosts are questioned. 

What then safeguards the interests of the guests of Airbnb? The webpage has two built-in features that function as a mode of screening/previewing the type of host that owns or manages the property. Profile, which is written by the host about themselves, and Guests Reviews which is optional. Guests Reviews are the only reliable source of information about how safe the place is for prospects, how trustworthy the host is. Regardless of all these measures, the profile is prone to puffery as it’s written by the hosts about themselves.

So who can one turn to when they run into a situation? A dissatisfied customer is only appeased when their issues are rectified justly. Would there be an option among solutions when resolved? A hotel could have provided you with one, by relocating you to the next available room should you encounter a dissatisfaction. Once again, hosts are individuals and a property may be the only lodging they have available. 

 

All things considered, Airbnb and hotels are completely different products. Staying at a hotel guarantees you a full-service experience. Whereas being a guest with Airbnb does not assure you consistency in service standards. There is also no clear distinction of legality when engaging with an Airbnb host and only the benefit of the doubt can be applied when using this type of service.