Impact of Airbnb in Hotel Industry-Whether it is Affecting the Hotel Guest Loyalty?

Impact of Airbnb in Hotel Industry-Whether it is Affecting the Hotel Guest Loyalty?

The world’s largest lodging provider, Airbnb, runs its business in around 192 countries and 30,000 cities across the globe. Now, the company need not have any worries about the high employee turnover rate or the increase or decrease in real estate prices. Since its growth is very large from its beginning in 2008.The idea of Joe Gebbia, one of the founders of the Airbnb, converted the simple room into the lodging room with few mattresses, thus the idea of Airbnb evolved. Now it is the company worth around $20billion. This travelling market has come across many obstacles in between.

Till now there is no proper evidence regarding the luxury issues concerned with Airbnb. Most of the people who stay in hotels are the well to do and the business people. Whereas, the Airbnb customers differ from them it provides its customers with low lodging fee and help them to meet different expectations. Even it may change if the company enters into the different cities.

There is a lot more difference between the hotels and the Airbnb. If a customer books in a well known hotel, they know for what they are getting paid, they offer the customers with cleanliness, amenities, comfort and the host of services. Staying in Airbnb is different, it is like staying in strangers’ house, they may lack in consistency, but they will compensate it with the authenticity and cheap lodging. People, who have the attitude to mingle up with the locals, can prefer Airbnb.

Airbnb can learn a lot from the hotels and vice versa. Hotels must work on the authentication to the people from different places, where people come as tourists, some hotels take suggestions from Airbnb’ success. Hilton in New York midtown, has introduces a new system to provide the dishes with the local fare.

Twin tire hospitality again launches its space to the boutique hotel and its floors represent the subway lines.

On the other side, the increasing growth of Airbnb has given birth to many entrepreneurs for correcting the problem of Airbnb’s consistency. Sometimes, these consistency problems are the main reasons for the people to prefer hotels. Some of the new hotels offer the cleaning services, key exchange and the care taking desks.

If someone talks about Airbnb, they are not talking about the booking; instead, they are talking about the accommodation and if people talking about the Uber, they are talking about the connection between the cab experience and the user not about the booking experience. Both the Airbnb and Uber depend on the technology, but the technology alone does not matter, technology combined with the accommodation and the experience matters.

Modernization is not allowing the customers to check in with their phone or the website which has more data about the customers. It is about understanding what the customer actually needs. The intelligent thing what the company can do is to find out the tools and methods that increase customer’s satisfaction.

Airbnb’s loyalty program

Airbnb has partnered with Qantas, to reward the frequent flyers who book with the Airbnb through their site.

Through the frequent flyer program, members will receive one Qantas point for every single dollar they spent on Airbnb booking, this process starts when the page is redirected from the Qantas website. This partnership can bring up membership in Qantas’s loyalty program, on the other side; it increases the threat to the hospitality industry.

Qantas can make use of the Airbnb’s large user base to bring travelers to its loyalty program. The revenue of the frequent flyer program increases 10% year over year and resulting in $694 million and Airbnb users were increased to 60 million, it has around 2 million room listings across the globe.

It will be useful for both the Airbnb and Qantas. Qantas will use the popularity of the home sharing app, Airbnb. People who have previously used     or they people who have interest to use Airbnb also have the chance to get attracted by the frequent flyer program. And also it increases the chance of Airbnb booking through the Qantas from the existing users, because there is a chance of expanding the rewards.

The advantage for the Airbnb with this partnership is that, it increases its strength in the hospitality industry. The company has decided to offer more travel options for the people who have not tried the service. In addition to the Qantas partnership, Airbnb has also partnered with Lufthansa airlines, for booking their trips on Airbnb.

If Airbnb continues to improve and has a growth in the industry, then we can expect Airbnb moving towards the Online Travel Agencies model and offers services more than peer to peer lodging.

About 36% of the US travelers prefer the peer to peer lodging over the traditional hotels. Airbnb tries to have partnered with more airlines to reach more travelers.

Linking of the Marriott rewards and SPG

Marriott International had closed its $13billion acquisition company, Starwood Hotels and resorts. But instead of this, Marriott rewards and Starwood Preferred Guest were linked up together, which will help in status matching and the transfer of points.

The CEO of Marriott, Mr. Arne Sorenson, said that, linking of both the services will be done in the beginning of 2017. They have taken this decision because; they have aimed to deliver something fast to their customers. He also said that, they are planning to deliver immediate benefits to the customers.

Many travel companies have acquired the airlines in order to expand their business and to reach many people. This kind of liking up of two services may also fall under this category of airlines acquisition.  He said that, the loyalty program was one of the important reasons for this acquisition. The loyalty programs are the major tools, which are used to connect the customers and the companies.

On the very first day of the acquisition, the SPC and the Marriott accounts of the 1, 00,000 people will be linked. The company is going to edit their 30 brands, in which, 19 are their own and 11 from Starwood.

About Airbnb

Sorenson said that, Airbnb now has the value of $30 billion; the loyalty program was one of the important reasons to reach this value. The hospitality business of the Airbnb was going in the minds of many hoteliers.

Airbnb has an impact on the hotels during some national events such as, Olympics or the democratic national convections, because at that time the Airbnb hosts earned more money than others. Airbnb succeed the hospitality and if Marriott enters the industry, it will have a different experience. He also said that, if people have some bad experience with Airbnb, the guests blame the hosts but not Airbnb and Marriott enters the same business, people will blame Marriott for the fault.

In case of direct booking, the wars happen between the online travel agencies and the hotels. The data of the OTA are better; many hospitality companies gather data from the OTAs.

Sorenson said that, the travel industry has a good place in the US and also globally. The hospitality industry has to respond quickly in order to have better places. The hotels are soft targets because they are the one which are open to people.

Author Bio:

Anand Rajendran is the Co-Founder and CEO of Snoota. He is a writer and coffee lover. He has is a graduate in Computer Science and Post Graduate in Entrepreneurship and leadership from Ulyanovsk State University, Russia. He is a passionate blogger & SEO Specialist. Snoota is a software products development company which has launched Stayal Script which is a Airbnb Clone Script with Android and iOS apps.

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