Analysis: is Airbnb a threat to hotels?

Photo of Forbes article about Airbnb co-founder Brian Chesky. [Shutterstock]

Speaking during a conference in Dubai, Jumeirah Group president and CEO Gerald Lawless noted: “I don’t see Airbnb as a threat so much as a new dimension to our industry. It is something that we have to make sure within the hotel business, we know how to embrace.”

Though he added that the same fire and health & safety regulations needed to be met along with municipality fees.Hotel revenues in Dubai alone are at $6.5bn at 95,000 keys, with 160,000 keys in 2020, according to Lawless. “That doesn’t even include Airbnb! In a way, we might even say that if that gets us up to our 160,000 keys, how many more hotels will actually be built? So it doesn’t necessarily mean a bad thing for us, but it’s something within the hotel business we’ve certainly got to cope with — but we can do that by embracing and understanding it, rather than keeping it at arm’s length, when we know it is definitely going to happen anyway.”

Waldorf Astoria Dubai Palm Jumeirah general manager David Wilson added: “It is a different product. Having looked at the offerings, it is a different experience. The hotels are really making our mark by adding all the extra facilities and services, spas and pools, recreation and so on…

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“No doubt it is growing and is definitely a competitor to the hotel industry, as Uber is in the transport business and I am sure it is going to continue to grow.”

Rotana president and CEO Omer Kaddouri addressed concerns being discussed by other hoteliers in an interview with Hotelier Middle East: “It’s a little bit like people talking about OTAs and how disruptive they are to hotels and how hotels don’t like paying the commissions. I don’t feel Airbnb is disruptive to us.”

Kaddouri stressed the clientele for Airbnb isn’t necessarily a hotel guest, and says the service can help the economy by driving people to the city. “Those people that talk too much about how disruptive Airbnb is, should forget about Airbnb and focus on their own business further,” he added.

Kaddouri continued: “There’s no similarity between the costs they [Airbnb] have, and the costs we have. The rules, regulations, standards, licensing that we have to have as a hotel, they don’t have.

“You walk into a hotel and be sure that if it’s a good chain hotel, you can be sure that the safety security and hygiene are all taken care of. You can go into an Airbnb apartment in Paris and you might not have that. You’re not really talking about the same thing.”