Trend Spotting: Attribute-based hotel bookings

As hotel booking technology continues to advance, the next widescale trend to emerge in hotel reservations and hospitality marketing may be attribute-based reservations.

Traditionally hoteliers have built room pools based on a single characteristic, such as bed type. This has largely been the extend of attribute offerings due to limits in reservation technology; however, with new investments in res engines and blockchain, the reservation system of the near-future will be able to offer extensive customization to guests.

Instead of selecting just a king bed room with the hotels standard amenities, guests may be able to specify a king room, near the elevator, with a four-piece bathroom, a sunrise view, an elliptical machine and a large club chair. Clearly this represents an extensive revenue opportunity for hoteliers, as well, to package unique room features and amenities to create more personal experiences for guests.

Beyond direct customization revenue, the broader opportunity to hotels will come from direct channel maximization, just as airlines have done with seat selection. Customization offered exclusively through branded hotel websites and apps would be a significant marketshare play against OTAs and room-sharing services such as AirBNB.

Analysis Shows Hotels Are Not Losing Share to AirBNB

AirBNB has been regarded as the great disrupter in the hospitality sector, but a new study shows that – for all the hype – AirBNB is not taking marketshare away from hotels.

The study, compiled by Smith Travel Research using AirBNB source data, offers critical insights into the true market penetration for the room-sharing service.

Among the key findings:

  • AirBNB has 2.3 million listings, far more than the world's largest hotel company, Marriott (1.1 million). However, much of AirBNB's inventory is available only in peak-season, not year-round.

 

  • Airbnb has higher peak-season occupancy because its users skew more heavily to leisure. Hotels have much higher year-round occupancy due to the diverse nature of their business (leisure, business, and group).

 

  • The markets with the highest hotel occupancy also have AirBNB's top occupancies. A deeper analysis shows that AirBNB is capturing excess demand, not shifting share.

 

  • Even on highest compression nights (hotel occupancy >95%) hotels are growing compression ADR faster than ever – at 35% in 2015 – with ADRs far exceeding those of AirBNB.

 

Jan Freitag, senior VP of lodging insights for STR, said that hoteliers are not at significant risk to lose share to AirBNB.

β€œI think the overall message is that the U.S. hotels industry continues to break demand records,” said Freitag. β€œWe are selling more rooms than ever before on an annualized basis. In 2014, we had a demand record. We had another demand record in 2015. We expect in 2016 we will also top the number of rooms sold. Room demand has been higher than it has ever been.”

Will Superhosts Kill AirBNB's Brand?

AirBNB has quietly launched a back-end page for hosts to turn over the management of their listing to superhosts. This new feature gives individual hosts the ability to outsource the management of their listing to a broker, of sorts, who handles guest transactions and pricing.

The Superhost market makes sense. I'm sure there are many AirBNB hosts (and potential hosts) who would prefer to have someone else handling the transactional minutiae of hosting.Β For AirBNB, superhosts could deliver a greater inventory and open access in large metro markets by lowering the barrier to entry for new hosts.

However, I can't help but think that superhosts may kill AirBNB's brand. After all, the "secret sauce" for AirBNB has been the direct relationship between guests and hosts. A superhosts isn't going to greet a guest and introduce them to an unknown taqueria, after all. If AirBNB removes that connectivity and endorses greater separation between host and guest, the next step is likely to be commoditization.

It will be interesting to watch this trend over the next few quarters for any hint of guest backlash, especially in gateway cities.