Airbnb ups the ante…

SSTH Editorial Team | 6 Jul, 2017

Airbnb has experienced surging growth since it was launched in 2008, but it was not until the last 3-4 years that the world's leading accommodation rental platform became a source of concern for hoteliers.

In fact, the degree to which Airbnb takes customers from hotels is still open to question.

In any case, it's clear that the mainstream Airbnb lodging offer lacks many of the features of a full service hotel, such as a concierge, laundry service and fitness facilities.

Overall, hotels offer a guaranteed level of accommodation which is typically subject to quality control through a chain affiliation or national hotel grading process.

Realising these drawbacks, Airbnb hired the iconic Californian hotelier Chip Conley, who founded Joie de Vivre boutique hotels, as chief of operations back in 2013. Conley's mandate was to attempt to enforce some uniformity of standards across Airbnb's heterogeneous offering.

He has since reduced his role at Airbnb, but remains in an advisory capacity.

Wilton Castle, Ireland on Airbnb


A new premium tier of rentals

Now most recently, in late June, Airbnb has taken steps to create a premium tier to compete more directly with hotels.

Instead of simply relying on customer reviews for quality control, the new service will be backed up by inspectors who will check homes against a list of specified criteria.

This pilot programme is designed to appeal to wealthier, older travellers who perhaps previously would have been reluctant to take a chance on an Airbnb accommodation.

Indeed, the new product is intended to attract guests who have yet to use Airbnb because they prefer the amenities offered by upscale hotels.

Wilton Castle, Ireland on Airbnb

Hosts to behave more like hotel employees

The service, expected to launch as a pilot with a select group of hosts in the coming weeks, will feature Airbnb-led inspections of hosts’ homes to ensure that they meet a checklist of quality standards designated by the company.

If the homes pass this inspection, they will be eligible for a featured section on Airbnb’s website and mobile apps.

Already, the company has been encouraging hosts to behave more like hoteliers, in order to broaden the base of potential customers.

Travellers who normally stay in hotels expect to be able to book instantaneously without having to rely on the owner’s approval which can take up to 24 hours or more for an Airbnb accommodation.

They require an instantly confirmed reservation and expect fresh linens and privacy on arrival.

They also anticipate that hosts will act more like hotel staff, meaning they will be courteous and blend into the background - no friendly chit-chat.

In fact, an Airbnb competitor, Priceline.com's hugely successful accommodation booking platform, Booking.com, has over 500’000 rental properties – all of which can be booked instantaneously.

Accessing an older and wealthier clientele

Airbnb's latest initiative is the first time that premium rooms will be packaged into a distinct product on the group's website with official inspections and incentives for participating hosts.

The service is internally referred to as "Select," but apparently an official name has not yet been determined. The full service could launch by the end of 2017, though this has not been confirmed by Airbnb.

Offering a premium selection of rentals with tighter quality control may help Airbnb access an older and wealthier client segment.

These users present a potentially new revenue source for the nine year-old startup, which began as a couch-surfing website for cost-cutting millennials.

Luxury Gold Coast Hinterland Villa on Airbnb

Airbnb earns a commission of between 3% and 5% of the cost of each booking, depending on the cancellation policy selected by the host.

Thus, higher-priced rentals can support revenue growth at a time when expansion is getting more difficult due to a tightening of the regulatory noose.

The new programme may present a new challenge to hotel chains, like Hilton and Marriott, which have already lost some lower-end customers to Airbnb and other home-sharing services, while most luxury and business guests have remained loyal to the full-service hotel product.


According to CNN, Airbnb has already contacted some hosts to begin the selection process.

Those who accept will be visited by inspectors who will determine if the homes meet requirements ranging from new and matching bed linens to plush towels and single-use toiletries as typically found in hotel bathrooms.

The process will be both subjective and objective.

The inspection team will assess the quality of furniture, Wi-Fi, television, mattress, linens, towels and toiletries. Other required amenities include a stocked fridge, with basics like water, and a clutter-free sink.

The company is leveraging its recent acquisition of Luxury Retreats, which it purchased in February 2017 for an undisclosed sum.

Luxury Retreats has experience handpicking and inspecting villas and other rentals, as well as offering 24/7 concierge services to guests.

 Villa San Gennariello, Italy on Airbnb

A screenshot of a website Airbnb plans to send to a select group of hosts, referencing the new service, reads, "Congrats! Your reviews for high consistent quality have qualified you for a special pilot program."

The page encourages them to take part because they will receive "priority placement in a new section for premium places."

Hosts who participate get access to a professional photographer who will take pictures of the home for Airbnb, along with other free perks like a consultation with an Airbnb-provided interior decorator.


 

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