In 2014, Christopher Norton, then EVP of global product and operations at Four Seasons, shared his perspective of a certain peer-to-peer rental company that was appearing in quite a few headlines. “Our guests don’t want the Airbnb feel and scent,” Norton told Fast Company. He wasn’t alone. Many leaders across the traditional hospitality landscape shared similar skepticism: how could travelers ever really want to sleep in a stranger’s home?
Fast forward to 2016, and the Airbnb aroma smells like success. Warren Buffett recommended Airbnb as a housing alternative for attendees at Berkshire Hathaway’s annual gathering. When Beyoncé performed at Super Bowl 50, she didn’t just go to the Bay Area; she took Airbnb’s cue to “live there” and rented a $30,000-per-night property. Earlier this summer, Airbnb embarked on a new round of fundraising that estimates the company’s value at a staggering $30 billion.
Some refer to Airbnb as a disruptor, but the company is no longer a new idea that might change the way people experience new destinations; it’s an established force in the hospitality industry. With more than 2 million listings in more than 34,000 cities, Airbnb has welcomed more than 60 million guests since its founding in 2008. Those numbers are poised to continue to grow, and Airbnb has its eyes on a coveted prize: the business travel segment. With designated Business Travel Ready listings and new partnerships with BCD, Carlson Wagonlit and American Express Global Business Travel, the company is expanding its appeal beyond budget-conscious leisure travelers.
A New Generation of Guests & New Questions For DMOs
What’s fueling all the momentum? Airbnb is satisfying a desire from an emerging generation of adventure-seeking travelers who are happy to trade loyalty program points for the reward of discovering the unexplored corners of cities. Instead of staying in the center of recognizable tourist attractions, they want to unload in a loft in an up-and-coming neighborhood. Rather than starting their days at a brand-name coffeehouse, they want recommendations on the not-for-tourist, mom-and pop spot. Forget the comfort of the hotel bar — they’re walking to the craft brewery that just opened six months ago.
As more visitors consider alternative lodging options, DMOs are facing a new set of questions. Can they continue to keep their hotel members happy while embracing this new type of competition? How will Airbnb’s supply impact hotel rates? Will Airbnb hosts pay taxes on their guests? What kind of funding boost might those taxes have on a DMO’s operating budget? And as heated debates about short-term rental regulations unfold in places like New York and San Francisco, plenty of DMAI members are asking the most pressing question of all: is this type of service even legal?
Sharing in the DMAI Spotlight
I’m looking forward to discussing these questions and more with forward-thinking leaders on August 2 in Minneapolis. With Tourism Tel Aviv’s Isaac Mizrachi, Providence Warwick CVB’s Martha Sheridan and San Francisco Travel Association’s Joe D’Alessandro, Tuesday’s general session features three early adopters who are already collaborating with Airbnb, along with Airbnb’s Head of Global Hospitality and Strategy, Chip Conley. I saw Conley speak at C2 in Montréal earlier this year, and he is uniquely positioned to help the DMAI community understand the nuances of the sharing economy. As the founder of Joie de Vivre Hotels, Conley brings a balanced perspective on how hotels and the sharing economy can thrive together. For all DMAI attendees, you’re in for a conversation that will send you home with new insights to empower you, your team and your destination in the era of sharing. See you next week!