A startling new report has prompted me to ask on the Htet Tayza blog; what can the global hospitality industry learn from Airbnb?
The eternal truth of the hospitality industry
When it all boils down, there’s one thing that a business needs to do if it wants to ensure it becomes a success. Give the customer what they want.
It’s simple. If you give a customer what they want, they’ll pay for it. In other words giving the customer what they want guarantees the long-term revenue stream that businesses need to survive and thrive. This eternal truth is particularly true for the global hospitality industry because its revenue is drawn directly from the wallets and purses of the consumers it has the ability to attract.
What is Airbnb?
This is why I believe that the global hospitality can learn from Airbnb. Airbnb is giving the consumers of the world what they want whilst many other firms in the sector are falling behind.
To understand why you have to know who Airbnb are and what they do. Touting itself as a worldwide accommodations leader, Airbnb is a firm which strives to provide unique places for tourists to rent on holiday, where they can stay with local hosts.
Airbnb shakes up the hospitality industry
Airbnb may only be six years old – it was established in 2008 – but a new report has revealed that its unique business model has shaken up the hospitality industry.
Check out these figures. According to The Street, over 30 million people have used Airbnb to secure a temporary resting spot, be it for a one-night stay or an extended month-long rental. Meanwhile the report, conducted at Boston University, revealed that a 10% rise in Airbnb accommodation supply translates into a 0.35% fall in hotel room revenue. The effect is particularly bad in Austin, Texas, which is the home of the firm.
So we have hard, concrete figures. Airbnb is stealing business from the hotel industry. Why? It’s giving the customers what they want. It’s easy for guests and hosts alike to take advantage of the site and usage of Airbnb can provide both with benefits that hotels simply can’t compete with. As a result the hotel sector is falling slowly but surely behind.
Give customers what they want
Therefore the rise of Airbnb should remind hospitality firms, as well as companies across every sector that deal with consumers directly, to give the customer what they want. Don’t and somebody else will. Their profit margins will increase whilst yours fall into decline.
Htet Tayza, Escape Gastro Bar