anewdomain.net — Big changes are about to shake up the travel industry. Forget Google for a moment. Peer-to-peer (P2P) rental marketplaces like Airbnb are the buzz of the moment. They let travelers deal directly with small hotels and private home owners. Or find a couch in an extra room — and even, in one instance, a child’s playhouse in the backyard. All this could amount to big time benefits for consumers.
Years ago, the Internet created new opportunities for condo owners and mom and pop hotels that were mostly excluded from the traditional travel supply chain. It worked for some, but most were drowned out by the bluster of big hotel chains and online travel agencies.
Airbnb, VRBO (Vacation Rental By Owner), HomeAway and HomeExchange.com are bringing the little guys together in one place — and making some in the hospitality industry downright indignant.
Airbnb CEO Brian Chesky shocked everyone last December when he announced that his web site and app — which have been around since 2008 — would surpass hotel giant Hilton in bookings. Listings are known as Spaces. They range from palatial homes to spare couches, and have grown to more than 300 thousand across 192 countries.
Establishing trust with consumers has been Airbnb’s greatest challenge. Travelers don’t want to find themselves in a Bates Motel, and home owners don’t want to rent their space to a Freddie Kruger.
But the chances of that happening are actually pretty slim. For example: Last week I visited friends who are well known in the hospitality industry. They’re using Airbnb to rent out their luxury home while they are away. Are they worried about what might happen to their home? Not at all, largely because Airbnb is now addressing such fears with a $1 million guarantee insured by Lloyds of London. It covers any guest damages. Airbnb also introduced a verified ID system a week ago, which requires parties to produce a good deal of personal information — including links to social media profiles and the last four digits of your Social Security number. I whinge, but most people seem to think the loss of privacy is worth it.
Years ago, Australia ran its numbers and was shocked to discover that backpackers spend more money than traditional travelers. Why? Because they stay longer. According to a study commissioned by Airbnb, its San Francisco travelers stayed for an average of 5.5 days, compared with an average of 3.5 days for hotel guests. P2P rental marketplace users often spend what they save on boarding on other attractions such as local restaurants. Alternative accommodations are usually located away from tourist centers in real neighborhoods, where guests can engage with locals rather than hotel staff. Now more than ever, travelers are seeking this sort of authentic experience.
Other established sites such as VRBO and HomeAway offer good deals on conventional condos and homes. HomeExchange specializes in vacation home trades. The only requirement is that you have a place worthy of trading. It may be peer-to-peer, but it is not couch-to-couch.
Hoteliers are sweating because there are now hundreds of competing rooms and spaces with free parking, free WiFi, no resort fees and no $5 bottled water.
Meanwhile, governments are kvetching about the loss of hotel tax revenues. Where I live, they are trolling Airbnb and other sites to scope out the scofflaws. New York City is dishing out big fines to those without legitimate permits, which are difficult to come by. Nevertheless, people are managing to fly under the radar. This train will be difficult, if not impossible, to stop.
Lets face it: Peer-to-peer rentals are competition. They offer travelers more authentic experiences while putting money into local communities and neighborhoods. And, with apologies to my friends in the hospitality industry, that is a good thing.
Image credits: Russ Johnson
But too many cities and states rely on hotel taxes for this to last that long. When it becomes time, the attorney generals will get involved. And then it’ll be a short-term thing … especially when the tax bills aren’t being paid.