Holiday decisions: The Airbnb debate continues
In the last few months, many hoteliers have mentioned Airbnb more than once, and with increasing regularity. When we pressed them further, hoteliers insisted they weren’t worried by the phenomenon. At the Gulf & Indian Ocean Hotel Investors’ Summit in February, the topic was brought up, yet again.
One of the points discussed was the number of Airbnb users versus hotel guests, and Expedia’s Christopher Michau said that these two categories need not be mutually exclusive. And he’s right. As a keen traveller myself, I’ve used both hotels and Airbnbs — while on the same journey! It all depends on the experience and value for money guests are looking for.
Recently, an independent analysis conducted by STR showed no direct correlation between Airbnb and hotel performance in Manhattan, New York.
Amanda Hite, STR’s president and COO, said in a statement: “We wanted to compare data for both sides to give hoteliers a true picture of Airbnb’s effect on the industry because it is a dominant player in the shared-accommodations space.”
The report showed that during strong demand nights for Airbnb units, there was no pattern of adverse effects on hotel occupancy or average daily rate.
However, in a destination like Manhattan, strong demand nights could mean most hotels are already sold out, and therefore more rooms are needed. Try booking a hotel room on New Year’s Eve or St. Patrick’s Day in New York — hotels you prefer may probably be full, and when there’s a choice between a hostel or a nice home, which one would you pick?
Hite said that “continued analysis to understand the key performance indicators of the hotel industry and other paid accommodations will be crucial to further understand the operating environment”.
Goldman Sachs released a report which revealed that after surveying 2,000 customers in the US, ‘if people have stayed in peer-to-peer lodging [P2P] in the last five years, the likelihood that they prefer traditional hotels is halved (79% vs. 40%)’.
It would be interesting for surveys like this to be carried out in the Middle East and North African market to fully assess what impact, if any, sharing accommodation is having here.
When Hotelier Middle East spoke to Gerald Lawless (February 2016 issue), he said: “Airbnb is just another way to access hospitality products. I think the way the Department of Tourism & Commerce Marketing has approached it in Dubai is very wise and a good way to do — by ensuring the property is licensed.”
Certainly, at the end of February, the DTCM (Dubai Tourism) announced Executive Resolution 3/2015 outlining detailed regulations for the emirate’s holiday home segment.
The regulations bring the segment in-line with Dubai’s hotel and hotel apartment guidelines, and detail specific criteria that home owners need to meet to apply for a licence, including quality standards, amenities, health & safety, insurance necessities, code of conduct, and wider community integration.
Dubai Tourism, recognising that this segment will add to the emirate’s appeal, will regularly inspect registered homes to maintain standards and issue penalties for non-compliance to regulatory demands.
According to the official statement, Dubai Tourism has already licensed 57 operators and registered more than 1,633 properties in line with the regulations.
Adapting to the sharing economy is important, so it’s great that Dubai is taking the lead on this front. It will be interesting to see how 2016 pans out for these peer accommodation services, but what I’m keen to observe is how this region’s hoteliers respond to ensure guests will choose them above all others.