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How hoteliers can profit from the sharing economy

Airbnb’s growing popularity has raised concern amongst accommodation providers about the longevity of the traditional hotel model. Are guests turning away from resorts and all other modes of accommodation in favour of private, unregulated rentals?

Not according to a new Skift report on what the sharing economy means to the future of travel.

Michelle Grant, Travel and Tourism Manager at Euromonitor International, said in the report: “The meteoric rise of Airbnb.com, booking more than 10 million nights since its inception in 2007, should not cause the hotel industry to worry about the vacation rental market. Both business models have co-existed for a significant amount of time without infringing on each other’s growth.”

Just 44 per cent of travellers were interested in staying in a vacation rental home in 2010 but this figure rose to 47 per cent in 2012, according to the MMGY Global/Harrison Group and a massive 80 per cent were comfortable with the idea of renting someone else’s vacation home on a trip in 2013, according to a report by Demeure.

The reasons for this trend vary but part of the advantage down to price: shared accommodation is generally cheaper. In fact, Priceonomics found Airbnb apartments 21.2 per cent cheaper than a hotel room and individual rooms 49.5 per cent cheaper.

According to the Skift report this is all relative to the recovering economy where homeowners are more willing to rent out their space and holiday-makers are more “hesitant to splurge” on a luxury hotel.

There are three tips accommodation providers can learn by embracing the sharing economy, based on the findings of this report.

1. Amenities. A huge draw for tourists looking at Airbnb or other shared accommodation is that there are no ancillary fees for internet use, telephone calls, laundry use, etc. If you currently charge for services like this it might be a good idea to reconsider your approach. Putting a loyalty program into effect to reduce these fees, or improve your hotel room amenities with the use of a kitchen.

2. Personality. Part of Airbnb’s success is the connection between host and guest. The host has to meet and greet guests personally with shared accommodation to hand over keys and go over the general workings of the property. This personal touch is something that lots of traditional hotels have now given up on with the loss of the concierge.

3. Local feel. Staying in someone’s private property gives guests a unique insight into the local community. Living like a local has become a popular aim for travellers and this is something hotels are often unable to provide. Being creative with new apps, hiring local staff and making connections with local businesses are all ways traditional accommodation providers could improve in this area.

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