Critical Analysis
Threat to Hotel Industry
Martin-Rios. C (2015) mentions about an interesting question brought out by Professor Sekulic “ Will Hotel rooms share the fate of CDs and DVDs?”, which obviously is in relation to the threat for hotel industry from Collaborative consumption companies like Airbnb who are in the business of aggregating rooms under an online bed-sharing concept. The hotel industry has yet to come to terms with the awareness as to how much customers especially the millennial are able to value the options available through Airbnb website. Most hoteliers are easily calling it a budget offering and being too inconsistent, possibly to be shunned by the guests who are used to staying at upscale hotels, however the confidence for hotel chains like Accor's is their business model is very different from that of Airbnb, nevertheless it is still important to analyze the development of these businesses (Martin-Rios. C, 2015).
The innovative strategy of Airbnb is not just to offer low-cost holidays, even though it is one major segment catering to the last minute budget holidayers looking to spend less on rooms and saving for other fun activities, yet they offer stress free transaction with less paperwork. There is a growing sense of trust dealing with private hosts, given the security concerns globally with hotels being a soft target for terrorist attacks. Hotels will need to realize that, providing a rich experience is at the heart of their disruptive strategy and could possibly threaten the livelihood for hotel employees with decline in business. However hotels must reconcile with this digital middleman doing exactly what they were doing since the birth of hotels, which is to connect a guest with a room to stay, hence there isn’t any ground breaking innovation about Airbnb (Kurtz, M. , 2014). Challenges to Airbnb Christensen. C, (2011) highlighted the opportunities that are available for developing disruptive innovations; he stressed on looking out for something which is difficult, unaffordable and complicated. Airbnb possibly disrupted the distribution of rooms in markets which were monopolized by the traditional hotels leaving customers with very little options, either they could change their travel dates due to non-availability or book at high premium (50Lessons, 2011). However there were limitations as Airbnb has not made many inroads in the upscale and luxury rooms segment hence it is yet to be seen as to whether the model restricts itself to offering low-cost housing which has its own limitations. Airbnb (2015) explains how it works is that primarily under the bed-sharing model it does not own or manage any of the options or rooms listed on its website, neither is there any brand association or standard services assured such as laundry, linen, soap, Wi-Fi and variety in Food and Beverage (Airbnb, 2015). When the traveller needs information on the venue they will have to decide based on stay reviews provided by earlier guests who stayed against familiarity of the standards inculcated in the operations of established hotel brands like Novotel, Marriott, Hyatt, Hilton and ibis. With regular hotels one can find certain levels of trust even with the reviews as they are hosted on a third party website like tripadvisor or zomato, however Airbnb hosts all the reviews on its own site which raises serious doubts about the lack of negative reviews. Moreover Airbnb has been drawn in many legal tangles due to regulatory risks associated with concerns about tax collections, safety drawing increasing scrutiny from regulators concerned about safety, rental laws and tax collections on the stays. In some high-end locations the Airbnb rooms may not be cheaper in comparison to a hotel rooms as the rates are determined by the hosts and the rental costs in such locations could be higher, moreover the quality of housekeeping and other …show more content…
The service needs to be sensitive to the needs and expectations of the guest and imbibe the warmth displayed by the hosts of the Airbnb listing. There is technology advancement which is crucial to compete with however other way to counter the disruption is for hotels to innovate by embracing non-technological innovation, relooking at what it has to offer, redesign its work structures, and break rules around workforce needs, talent management and focus on forging new partnership (Martin-Rios. C.,
Threat to Hotel Industry
Martin-Rios. C (2015) mentions about an interesting question brought out by Professor Sekulic “ Will Hotel rooms share the fate of CDs and DVDs?”, which obviously is in relation to the threat for hotel industry from Collaborative consumption companies like Airbnb who are in the business of aggregating rooms under an online bed-sharing concept. The hotel industry has yet to come to terms with the awareness as to how much customers especially the millennial are able to value the options available through Airbnb website. Most hoteliers are easily calling it a budget offering and being too inconsistent, possibly to be shunned by the guests who are used to staying at upscale hotels, however the confidence for hotel chains like Accor's is their business model is very different from that of Airbnb, nevertheless it is still important to analyze the development of these businesses (Martin-Rios. C, 2015).
The innovative strategy of Airbnb is not just to offer low-cost holidays, even though it is one major segment catering to the last minute budget holidayers looking to spend less on rooms and saving for other fun activities, yet they offer stress free transaction with less paperwork. There is a growing sense of trust dealing with private hosts, given the security concerns globally with hotels being a soft target for terrorist attacks. Hotels will need to realize that, providing a rich experience is at the heart of their disruptive strategy and could possibly threaten the livelihood for hotel employees with decline in business. However hotels must reconcile with this digital middleman doing exactly what they were doing since the birth of hotels, which is to connect a guest with a room to stay, hence there isn’t any ground breaking innovation about Airbnb (Kurtz, M. , 2014). Challenges to Airbnb Christensen. C, (2011) highlighted the opportunities that are available for developing disruptive innovations; he stressed on looking out for something which is difficult, unaffordable and complicated. Airbnb possibly disrupted the distribution of rooms in markets which were monopolized by the traditional hotels leaving customers with very little options, either they could change their travel dates due to non-availability or book at high premium (50Lessons, 2011). However there were limitations as Airbnb has not made many inroads in the upscale and luxury rooms segment hence it is yet to be seen as to whether the model restricts itself to offering low-cost housing which has its own limitations. Airbnb (2015) explains how it works is that primarily under the bed-sharing model it does not own or manage any of the options or rooms listed on its website, neither is there any brand association or standard services assured such as laundry, linen, soap, Wi-Fi and variety in Food and Beverage (Airbnb, 2015). When the traveller needs information on the venue they will have to decide based on stay reviews provided by earlier guests who stayed against familiarity of the standards inculcated in the operations of established hotel brands like Novotel, Marriott, Hyatt, Hilton and ibis. With regular hotels one can find certain levels of trust even with the reviews as they are hosted on a third party website like tripadvisor or zomato, however Airbnb hosts all the reviews on its own site which raises serious doubts about the lack of negative reviews. Moreover Airbnb has been drawn in many legal tangles due to regulatory risks associated with concerns about tax collections, safety drawing increasing scrutiny from regulators concerned about safety, rental laws and tax collections on the stays. In some high-end locations the Airbnb rooms may not be cheaper in comparison to a hotel rooms as the rates are determined by the hosts and the rental costs in such locations could be higher, moreover the quality of housekeeping and other …show more content…
The service needs to be sensitive to the needs and expectations of the guest and imbibe the warmth displayed by the hosts of the Airbnb listing. There is technology advancement which is crucial to compete with however other way to counter the disruption is for hotels to innovate by embracing non-technological innovation, relooking at what it has to offer, redesign its work structures, and break rules around workforce needs, talent management and focus on forging new partnership (Martin-Rios. C.,