Airbnb to further disrupt ME mid-market progress

Hoteliers presented opposing opinions regarding the seriousness of the impact Airbnb presents to the mid-market hospitality industry.

Time Hotels CEO Mohamed Awadalla said at the Hotelier Express Summit 2016: “Airbnb is very nice, but it’s a totally different offering, I have realised they are no threat, their guests are not looking for our rooms, they look for a different product – we have facilities, security and F&B, it’s a different market – it doesn’t scare me.”

Citymax Hotels COO Russell Shape disagreed, suggesting: “If you are not worried [about Airbnb], you are wrong.” He continued: “Airbnb as a company is valued at US $25 billion, their revenues are in excess of $1 billion, boasting 60 million guests."

“They will tell you that they own those 60 million [guests], it is their list, and they believe they will all come back and book again.”

He added that the online booking platform has also shown 350% growth year-on-year, adding these figures are ‘scary’, suggesting: “It’s like Uber and the black taxi of London, perhaps in time taxi’s will disappear from the streets of London.”

Smartotels founder and managing partner Tarek Daouk said: “With Airbnb, what is important to understand is the purpose of the trip and the length of stay, it’s all about why the guests are travelling.

“For example, in London if you want a specific neighbourhood, Airbnb could be more favourable [than a budget or mid-market hotel], this is important to keep in mind.”

Roda Hotels & Resorts corporate vice president of strategy & development Louay Sarrage, said: “I’d say some segments are competing with Airbnb, like serviced apartments. But, if a guest is travelling with a maid and children, they need three or four rooms, so a serviced apartment makes more sense.

“However, millennials don’t care as much about service, and they don’t want to pay extra. Whereas a businessperson doesn’t think of Airbnb at all, he can’t take a risk [on accommodation], and besides, the company may be paying for the business trip.

He concluded: “Yes Airbnb is competition, but it is not black and white.”